Lok Sabha Question No. 221 (UNSTARRED), answered on 2025-07-21
Subject: ESG Reforms
Ministry: CORPORATE AFFAIRS
Asked by: Shri Manickam Tagore B, Shri Suresh Kumar Shetkar, Shri Vijayakumar Alias Vijay Vasanth

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS LOK SABHA

## UNSTARRED QUESTION NO. 221

ANSWERED ON MONDAY, July 21, 2025/Ashadha 30, 1947 (Saka)

## ESG REFORMS

## QUESTION

221.   Shri Vijayakumar Alias Vijay Vasanth: Shri Suresh Kumar Shetkar: Shri Manickam Tagore B:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a)  the  follow-up  mechanisms  put  in  place  by  the  Government  to  ensure  that discussions  at  NCRBC,  2025  lead  to  binding  ESG  reforms  and  are  not  limited  to voluntary industry participation;
- (b)  whether  the  Government  is  supporting  Indian  MSMEs  and  exporters  in  meeting international ESG standards such as the EU's Corporate Sustainability Due Diligence Directive (CSDDD), especially to safeguard market access and if so, the details thereof; (c)  the  current status of ESG adoption in public sector enterprises and the way by which the Government is ensuring transparency and accountability in their sustainability disclosures;
- (d)  whether  the  Government  shares  any  concrete  regulatory  or  policy  outcomes expected from NCRBC 2025, particularly in areas like BRSR alignment, green finance and workforce transition; and
- (e) the way by which the global partners like UNICEF and ILO actively participate in order  to  incorporate  their  recommendations  into  national  ESG  policy  frameworks, especially for inclusive employment and supply chain due diligence?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS   AND MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS [SHRI HARSH MALHOTRA]

(a) to (e) IICA is an autonomous body under the Ministry of Corporate Affairs (MCA), mandated to undertake academic research, provide capacity building, and facilitate advocacy in areas relating to corporate affairs and responsible business conduct. IICA introduced  its  programme  on  responsible  business  conduct  and  consequently,  it organises the National Conference on Responsible Business Conduct (NCRBC) which is an annual event to facilitate multi-stakeholder dialogue, knowledge exchange, and capacity building on themes  relating to responsible business practices. The deliberations at the NCRBC aims at fostering a shared understanding of good practices and  encouraging  academic  enhancements  in  collective  understanding  of  business responsibility  and  the  conference  is  not  intended  to  serve  as  a  policymaking  or regulatory  forum,  calling  for  putting  in  place  a  formal  follow-up  mechanism  by  the Government.

Business  Responsibility  and  Sustainability  Reporting  is  an  approach  to  drive  an organization's commitment to sustainability which was first embedded in the National Voluntary  Guidelines  on  Social,  Environmental  and  Economic  Responsibilities  of Business  (NVGs)  released  in  2011  and  later  incorporated  in  Companies  Act,  2013, which envisages wider  responsibilities  for  a  Company  and  its  Directors  beyond  its shareholders to its stakeholders - employees, community, and environment. In keeping with  global  developments  and  domestic  changes,  the  NVGs  were  upgraded  and updated as the National Guidelines for Responsible Business Conduct (NGRBC) in 2019.

The  essence  of  Environmental,  Social  and  Governance  (ESG)  is  embedded  in  the Companies  Act,  2013,  aligning  corporate  conduct  with  sustainability  and  ethical standards. The key aspects of the Act that promote ESG principles can be found in relevant  clauses  related  to Director's  responsibility  in  their  Board  Report  w.r.t disclosures about energy conservation, appointment of women directors, disclosures on maternity benefit, duties of directors, corporate social responsibility etc. Furthermore, these disclosures are part of the financial statements and the Board of the  respective  companies are responsible for compliance of applicable disclosures which are required under the Act and rules made thereunder. For any policy formation, the government consults all the stakeholders.

The  Securities  and  Exchange  Board  of  India  (SEBI)  had  mandated  top  500  listed companies by market capitalisation to make disclosures on business responsibility and sustainability indicators  contained  in  the  NVGs  since  2012  through  Business Responsibility Reporting (BRRs) which were then later increased to the top 1000 listed companies (by market capitalization) where these companies for the FY 2021-22 would voluntarily  submit  the  report  on  BRSR  and  mandatorily  from  FY  2022-23  onwards. Subsequently, vide circulars dated July 12, 2023 and Mar 28, 2025, SEBI has introduced BRSR Core, which contains a limited set of critical / core Key Performance Indicators (KPIs), for which listed entities shall need to obtain assurance/ assessment, as per the specified glide path beginning with the top 150 listed entities from FY 2023 -24, and applicable to the top 1000 listed entities by FY 2026  - 27.   Further, SEBI has also introduced ESG disclosures for the value chain of top 250 listed entities on a voluntary basis from FY 2025 - 26 and assurance/assessment of the same on a voluntary basis from FY 2026 - 27. These are applicable to both private and public sector companies.

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