ESG in India refers to the use of environmental, social and governance factors when examining a business’s activities, risks and responsibilities. It asks questions that a profit figure alone cannot answer: how resources are used, how people are treated and how decisions are controlled.
ESG is not a single government certificate. A company’s disclosures, an external rating and its actual conduct are three different things. A detailed report can improve transparency, but it does not automatically prove that the company performs well.
The three pillars with practical examples
| Pillar | Examples | Useful evidence |
|---|---|---|
| Environmental | Energy, emissions, water and waste | Measured consumption, emissions inventory and disposal records |
| Social | Worker safety, equality, customer welfare and community impacts | Injury data, grievance outcomes and workforce information |
| Governance | Board oversight, ethical conduct and accountability | Decision procedures, conflict controls and transparent reporting |
The pillars can interact. A factory reducing pollution may improve both environmental performance and neighbouring communities’ living conditions. Weak oversight can undermine environmental targets if managers are rewarded for production while ignoring compliance failures.
Why ESG requires material information
Materiality concerns the significance of information to the decisions being made. Water availability may be a major operational concern for a water-intensive plant. Data protection may be central to a digital service handling customer information. Copying the same checklist into both reports can hide the issues that matter most.
Useful reporting explains boundaries and methods. Does a figure cover one office or the whole group? Are contractors included in safety data? Has an emissions total fallen because operations improved or because a polluting subsidiary was sold? Readers need these details to interpret a claim.
BRSR and BRSR Core
The Business Responsibility and Sustainability Report (BRSR) provides an Indian reporting framework for covered listed entities. BRSR Core is a selected group of indicators within that broader framework, intended to support more consistent verification of important ESG data.
SEBI’s 28 March 2025 circular provided an option of assessment or assurance for BRSR Core. The stated implementation path covered the top 500 listed entities by market capitalisation in FY 2025–26 and the top 1,000 in FY 2026–27. These obligations must be distinguished from value-chain reporting.
Under the same circular, ESG disclosures for the value chain were voluntary for the top 250 listed entities from FY 2025–26; assessment or assurance of those value-chain disclosures was voluntary from FY 2026–27. It is therefore incorrect to describe every supplier’s ESG disclosure as universally mandatory under this change.
ESG, CSR and ratings are different
Corporate social responsibility can include specific programmes and expenditure for social purposes. ESG examines the wider conduct and risk profile of a business. Funding a school does not cancel out unsafe working conditions or misleading financial disclosures.
An ESG rating depends on the provider’s methods, data and weighting of factors. Two providers may assess the same company differently. This does not necessarily mean one made an arithmetic mistake: they may measure different issues or apply different judgements.
How greenwashing can appear
- Highlighting one small environmental project while omitting the main operational footprint.
- Using words such as “green” without stating the basis for the claim.
- Publishing a distant target without intermediate milestones or investment plans.
- Comparing figures whose reporting boundaries changed without explaining the change.
Absolute and intensity measures can also tell different stories. Suppose an illustrative firm cuts emissions per unit of output by 10 per cent but increases output by 50 per cent. Total emissions can still rise. Both measures may be correct, so a credible report should show the relationship rather than selecting whichever number looks better.
What makes disclosure useful?
Reliable ESG information needs clear definitions, evidence that can be checked, comparable periods and oversight of data collection. External assessment or assurance can strengthen confidence in reported information, but it does not guarantee that a business will avoid every future failure.
Smaller suppliers may need practical support to measure energy, waste or workforce data. Proportionate reporting should reduce unnecessary duplication while retaining information needed to understand significant impacts. The policy challenge is to improve accountability without turning disclosure into an exercise in producing increasingly elaborate documents.
Connect ESG with environmental governance when preparing examples on sustainable development and business responsibility.
Frequently asked questions
1. What is the full form of ESG?
Environmental, Social and Governance.
2. Is BRSR Core the entire BRSR?
No. It is a selected set of key indicators within the broader reporting framework.
3. Does a high ESG rating guarantee good returns?
No. A rating is an assessment under a particular methodology, not a guarantee of investment performance.
4. Can CSR spending replace responsible business conduct?
No. A social programme does not remove responsibilities relating to workers, environmental impacts and governance.
