Why ESG reporting is no longer optional for Indian businesses

In 2025, ESG (Environmental, Social, and Governance) reporting is no longer a choice for Indian businesses — it is an expectation from regulators, investors, consumers, and global supply chains alike. The increasing push for transparency, sustainability, and ethical governance is transforming how businesses operate, report, and build stakeholder trust. At the heart of this transformation is India’s Business Responsibility and Sustainability Reporting (BRSR) framework, which has become a critical compliance mandate for the top 1,000 listed companies — and an essential starting point for many others.

As the second full year of BRSR adoption progresses, its impact is reverberating across the enterprise. ESG compliance is no longer the sole concern of sustainability officers or compliance teams — it is now a boardroom and cross-functional priority. Here’s why every major function in an Indian organization must treat ESG reporting as a strategic imperative in 2025.

For Boards and CXOs: Long-Term Value and Reputation Management

Boards are under growing pressure to demonstrate responsible corporate stewardship. ESG metrics are now seen as indicators of long-term value creation and risk mitigation. Global investors increasingly demand clarity on climate-related risks, ethical governance, board diversity, and social impact. ESG performance influences capital access, brand reputation, and even M&A valuations.

For Indian CXOs, especially those seeking global capital or partners, BRSR-aligned ESG reporting is a way to future-proof operations and establish market credibility. It's no longer a "good-to-have" — it directly correlates with business resilience, investor confidence, and stakeholder goodwill.

For CFOs: Financial Relevance and Risk Transparency

CFOs can no longer view ESG reporting as a non-financial exercise. The integration of ESG with enterprise risk management and cost optimization is accelerating. From carbon pricing implications to climate-related asset write-downs, ESG factors are now impacting the bottom line.

For CFOs, strong ESG performance enhances creditworthiness and investor confidence. Lenders and institutional investors increasingly offer preferential interest rates, green bonds, or ESG-linked loans to companies with transparent, assured ESG disclosures. ESG compliance can directly lower the cost of capital and widen access to sustainable finance.

With SEBI tightening compliance norms under BRSR Core for select sectors, the accuracy, auditability, and consistency of ESG disclosures have become critical. CFOs must work with sustainability and finance teams to align ESG reporting with financial disclosures, ensure proper controls, and prepare for third-party assurance — just as they do for statutory audits.

For Compliance Heads: Strengthening Corporate Integrity

BRSR is now a part of India’s corporate governance and regulatory landscape. Non-compliance can invite scrutiny from SEBI, investors, and activist stakeholders. Compliance officers must ensure that the company's ESG framework adheres to evolving laws, including environmental regulations, labour standards, and governance policies.

Additionally, ESG disclosures can no longer rely on spreadsheets and siloed data. Compliance teams need integrated, real-time ESG data management systems to ensure accuracy, traceability, and alignment with mandatory reporting metrics.

For Sustainability Officers: Driving Strategy, Not Just Reports

Sustainability is no longer a support function — it is becoming a core business strategy. BRSR enables sustainability leaders to move beyond CSR checklists and embed sustainability into the company’s business model, supply chain, and innovation roadmap.

In 2025, customers and institutional buyers — particularly from Europe and North America — demand ESG-aligned practices from suppliers. The ability to track Scope 1, 2, and 3 emissions, monitor water consumption, and improve waste management has shifted from “impact reporting” to supply chain survival. A robust ESG strategy can become a competitive differentiator in both B2B and B2C sectors.

For HR Leaders: Employee Trust and Talent Retention

Employees are increasingly choosing to work for organizations that reflect their values. ESG, particularly the “Social” dimension, covers diversity, equity, inclusion, employee well-being, and safety — all areas under HR’s purview.

Under BRSR, companies must disclose workforce composition, gender diversity, occupational health, and fair wage practices. Transparent and proactive reporting helps attract top talent, reduce attrition, and build a more resilient, engaged workforce. In 2025’s talent-scarce market, this can be a serious strategic advantage.

For Procurement Teams: Sustainable and Compliant Supply Chains

Procurement leaders are on the frontline of ESG risk, especially in sectors like manufacturing, apparel, and FMCG. BRSR requires companies to report how suppliers are selected, monitored, and aligned with the company’s environmental and social values.

Indian companies increasingly face ESG expectations from global supply chains, especially due to upcoming EU regulations on human rights due diligence and sustainable product design. Building a supplier ESG data framework, conducting sustainability audits, and integrating ESG criteria into procurement scorecards is no longer aspirational — it is essential to maintaining business continuity and export eligibility.

India’s BRSR Mandate: The First Step Toward ESG Maturity

India’s BRSR framework, which replaced the earlier BRR (Business Responsibility Report), is structured to align with global standards such as GRI, TCFD, and SASB. From FY2023-24, SEBI introduced BRSR Core, making quantitative disclosures mandatory for certain sectors. This signals a shift toward assurance-ready ESG data and heightened scrutiny.

For companies not yet covered by BRSR mandates, it is still advisable to start voluntary ESG reporting in anticipation of future mandates, investor queries, and business exigencies. ESG-readiness is rapidly becoming a license to operate — across industries and markets.

ESG reporting in 2025 is not just about compliance — it is about creating value, managing risk, and building trust. With regulations tightening, stakeholders demanding transparency, and climate risks looming large, Indian businesses can no longer delay.

BRSR offers a structured, India-aligned way to get started — but its true value lies in how well it is embedded across departments, led from the top, and supported by robust technology.