In the evolving landscape of Environmental, Social, and Governance (ESG) practices, assurance has emerged as a critical tool for building credibility, trust, and transparency. For Indian companies navigating stringent regulatory frameworks and increasing stakeholder expectations, assurance is no longer just an option—it is imperative towards robust ESG compliance and reporting.

Why Assurance Matters in ESG

Assurance provides an independent evaluation of ESG disclosures, offering stakeholders confidence in the accuracy and reliability of the information presented. It acts as a bridge between a company’s sustainability initiatives and the expectations of investors, regulators, and the broader community. In India, where SEBI has mandated ESG disclosures through the Business Responsibility and Sustainability Report (BRSR), assurance ensures that these disclosures meet the highest standards of integrity and accountability.

SEBI’s Approach to ESG Assurance

The Securities and Exchange Board of India (SEBI) has recently refined its requirements regarding ESG assurance, introducing flexibility while maintaining rigorous standards. For example, the term “assurance” has been broadened to include “assessment or assurance” for ESG disclosures. This shift acknowledges the need for a phased approach, where third-party assessments can serve as an interim measure before full assurance becomes mandatory. Such measures provide Indian companies with the time and resources needed to adapt while ensuring continuous improvement in their ESG reporting frameworks.

Assurance Framework for BRSR Reporting

Under SEBI’s regulatory framework, BRSR reporting now incorporates an assurance mechanism to validate the accuracy and reliability of ESG disclosures. Key aspects of this framework include:

• Core Disclosures Assurance: Starting FY 2024-25, listed entities are required to obtain third-party assurance or assessment for BRSR Core disclosures. This step ensures that critical ESG parameters meet predefined standards of transparency and integrity.
• Value Chain Assurance: From FY 2026-27 onwards, assurance requirements will extend to ESG disclosures that includes only BRSR Core elements for the value chain. This phased implementation allows companies to build robust data collection mechanisms across their supply chains.
• Standards Development: Assurance will align with standards developed by the Industry Standards Forum (ISF) in consultation with SEBI, ensuring consistency and reliability across industries.
• Focus on Materiality: The assurance process emphasizes material ESG factors, ensuring that reporting aligns with the company’s specific context and stakeholder expectations.

Benefits of ESG Assurance

1. Enhanced Credibility: Independent assurance validates the authenticity of ESG data, fostering trust among stakeholders and reducing the risk of greenwashing.
2. Regulatory Compliance: Assurance aligns ESG disclosures with SEBI’s guidelines, reducing potential legal and reputational risks.
3. Operational Improvements: The assurance process often identifies gaps in data collection and management, driving internal efficiencies and enhancing overall sustainability performance.
4. Investor Confidence: With ESG becoming a key factor in investment decisions, assured data increases a company’s appeal to socially responsible investors.

How ESG360 Can Support Your ESG Assurance Needs

At ESG360, we understand that assurance is more than just a compliance requirement—it is a strategic enabler for sustainable growth. Our tailored solutions include:

• Expert-Led Third-Party Assessments: Ensure your ESG disclosures meet SEBI’s standards with comprehensive assessments aligned with industry benchmarks.
• End-to-End Assurance Services: From data validation to full assurance, our team helps you navigate the complexities of ESG reporting with ease.

The Way Forward

As ESG continues to shape the future of business in India, assurance plays a pivotal role in ensuring that sustainability efforts translate into tangible results. With SEBI’s focus on robust ESG disclosures, companies must prioritize assurance to stay compliant, build stakeholder trust, and drive meaningful impact.

Partner with ESG360 to elevate your ESG journey. Let us help you unlock the full potential of assurance as a driver of transparency, accountability, and long-term success.

Visit www.esg360.in to learn more about our assurance services or get in touch with us today!