Introduction: ESG Has Moved Beyond Reporting
Over the past few years, ESG reporting in India has undergone a structured transformation. With the introduction of the Business Responsibility and Sustainability Report, companies have been required to disclose their performance across environmental, social and governance dimensions in a standardised format. This shift brought discipline, comparability and visibility to non-financial disclosures, and for many organisations, it marked the beginning of formal ESG reporting.
However, the current phase of ESG evolution is fundamentally different from what companies experienced during the initial years of BRSR.
With BRSR Core assurance already in force for applicable companies, ESG reporting is no longer limited to presenting information. It now requires organisations to demonstrate that their disclosures are supported by robust data systems, consistent methodologies, and verifiable evidence. This transition reflects a broader shift in regulatory intent, where the emphasis is not only on what companies report, but on how reliably that information can be validated.
For many organisations, this is where the real challenge begins.
Understanding the Intent Behind BRSR Core Assurance
BRSR Core was introduced to focus attention on a set of ESG indicators that are considered critical for evaluating corporate sustainability performance. These indicators span areas such as energy consumption, greenhouse gas emissions, water usage, waste management, employee well-being, diversity and aspects of value chain responsibility.
While the broader BRSR framework allowed companies to progressively build their disclosures, BRSR Core introduces a higher level of expectation. The requirement for assurance means that each reported value must be capable of withstanding independent verification.
This introduces a fundamental shift in how ESG data is perceived within organisations. Data is no longer an output prepared at the end of the reporting cycle. It becomes a function that must be generated, recorded, validated and maintained throughout the year.
From a regulatory perspective, the intent is clear. ESG disclosures are being aligned more closely with the principles of financial reporting, where consistency, traceability and internal controls are essential. This is intended to improve the credibility of disclosures and enable stakeholders such as investors, lenders and regulators to rely on ESG information for decision making.
Why Reporting Experience Does Not Automatically Mean Readiness
A significant number of companies have already gone through one or more cycles of BRSR reporting. This has created a perception that organisations are prepared for the next stage. In practice, this assumption is proving to be inaccurate.
The reason lies in the way ESG reporting has been implemented so far.
In many organisations, BRSR preparation has been treated as a year-end exercise. Data is collected from different departments, compiled into templates, reviewed at a central level and then presented in the reporting format. This approach is effective for disclosure, but it does not create a system that can support assurance.
Assurance requires that the data is not only available, but also:
- generated through defined processes
- recorded consistently over time
- supported by underlying documents
- reviewed and approved through structured controls
When these elements are missing, companies may have the required numbers, but they do not have the ability to demonstrate how those numbers were derived. This gap becomes critical during assurance.
The Structural Nature of ESG Data
One of the most fundamental reasons for this gap is the structural nature of ESG data within organisations.
Unlike financial data, which is typically managed through centralised accounting systems, ESG data originates from multiple operational functions. Energy consumption data is generated at plant level, water usage may be tracked through manual or semi-automated logs, safety incidents are recorded by EHS teams, and employee related information is managed by HR systems.
Each of these data streams operates independently, often with different levels of accuracy, frequency and documentation. In many cases, there is no integrated system that brings these data points together in a consistent and controlled manner.
When organisations attempt to prepare BRSR Core disclosures, they are essentially consolidating multiple decentralised data sources into a single reporting framework. Without prior integration, this consolidation process relies heavily on manual intervention. This increases the risk of inconsistencies, duplication, and incomplete data capture.
From an assurance perspective, this raises a critical question. How can the organisation demonstrate that the reported data is complete and accurate if the underlying systems are fragmented?
Ownership and Accountability: A Missing Layer
Another important challenge lies in the absence of clearly defined ownership for ESG data.
In financial reporting, responsibilities are well established. There are defined roles for preparing data, validating it, reviewing it and approving it. There are also clear timelines and accountability structures.
In contrast, ESG often operates as a cross functional responsibility without formal ownership.
The sustainability or ESG team may coordinate the reporting process, but the data itself resides with different departments. These departments may not have defined responsibilities for ESG reporting, nor do they always have visibility into how their data is being used.
This leads to situations where:
- Data is shared without proper validation.
- Different teams use different interpretations for the same metric.
- There is no formal review process before data is finalised.
In the absence of accountability, it becomes difficult to establish the level of control required for assurance.
The Difference Between Data and Evidence
One of the most important distinctions that emerges during BRSR Core assurance is the difference between data and evidence.
Many organisations are able to present numerical values for ESG indicators. However, assurance requires that these values be supported by underlying evidence that can be independently verified.
For example, reporting total energy consumption requires more than a consolidated figure. It requires supporting documents such as electricity bills, fuel consumption records and internal logs. In addition, there must be clarity on how these individual data points have been aggregated, whether all facilities have been included, and how any data gaps have been addressed.
Similarly, reporting employee related metrics requires alignment between HR records, payroll data and internal definitions. Any discrepancy between these sources can raise questions about the reliability of the reported information.
The absence of documented methodologies and supporting evidence is one of the most common reasons why organisations face challenges during assurance. It highlights the need to move from data collection to evidence based reporting.
Consistency of Methodology Across the Organisation
Another area that becomes critical during assurance is the consistency of methodologies used to calculate ESG indicators.
In organisations with multiple locations or business units, it is common for different teams to adopt different approaches for measuring similar parameters. For instance, one facility may calculate energy intensity based on production output, while another may use revenue as the basis. Emission calculations may use different emission factors depending on the source referenced. Waste classification may vary depending on local practices.
While these differences may appear operational in nature, they directly impact the comparability and credibility of ESG disclosures. Assurance processes are designed to identify such inconsistencies and evaluate whether the organisation has a standardised approach.
Establishing uniform methodologies across the organisation requires coordination, documentation and ongoing monitoring. It cannot be achieved retrospectively at the time of reporting.
What Assurance Actually Evaluates
It is important to understand that ESG assurance does not focus only on the final numbers reported. It evaluates the entire process through which those numbers are generated.
This includes:
- the systems used to capture data
- the processes followed for validation
- the controls in place to prevent errors
- the documentation supporting each data point
- the governance mechanisms overseeing ESG reporting
In this sense, assurance is not just a check on accuracy. It is an assessment of the organisation’s ESG data management maturity.
Companies that approach ESG reporting as a documentation exercise often find that they need to rework significant portions of their data and processes when preparing for assurance.
Implications for Indian Companies
The movement towards assured ESG disclosures reflects a broader shift in expectations from regulators and stakeholders. ESG information is increasingly being used for investment decisions, risk assessment and stakeholder engagement.
For Indian companies, this means that ESG cannot remain a parallel reporting function. It needs to be integrated into core business processes, with the same level of rigour that is applied to financial data.
Organisations that invest in building structured ESG systems will be better positioned to:
- meet regulatory requirements efficiently
- respond to investor queries with confidence
- identify and manage sustainability related risks
- improve operational efficiency through better data visibility
On the other hand, companies that delay this transition may face repeated challenges in assurance cycles, leading to inefficiencies and credibility concerns.
Conclusion: From Compliance to Credibility
BRSR Core assurance represents a significant step in the evolution of ESG in India. It marks a transition from disclosure driven compliance to evidence-based credibility.
The challenge for organisations is not limited to understanding the framework. It lies in building the systems, processes and governance structures required to support reliable ESG data.
This is not a short-term adjustment. It is a structural shift in how organisations manage and report non-financial performance.
As ESG continues to gain importance in the business and regulatory landscape, the ability to demonstrate credible and verifiable performance will become a key differentiator.