At the same time, global sustainability reporting frameworks are still evolving and there is a need for dialogues, guidance and collaboration, to ensure that Indian Industry can effectively align and report on the disclosures. Last year, CII led the B20 engagement under India’s G20 Presidency - the ESG in Business Action Council of B20 India. The council identified unique challenges in the ESG ecosystem from the Global South perspective and proposed key recommendations in these areas. To create a common language for disclosing the effects of climate-related risks and opportunities and sustainability performance by organisations across the globe, CII conducted a roundtable with ISSB at the World Economic Forum in Davos in January this year. In a further effort to resolve challenges in the global ESG disclosure ecosystem, CII held a close-door roundtable with the Chair of the IFRS Foundation, Mr Erkki Liikanen in June 2024.

In a quest for a holistic approach to sustainability, the Indian Industry is undergoing a transformative journey to integrate ESG practices and through digital tools, assessments and feedback reports, CII catalyses Industry actions that are sustainable, inclusive and environment friendly. In recognition of the urgent need for capacity development in BRSR considerations, CII delivered a Management Development Programme (MDP) on achieving BRSR Core Compliance with the training institute of SEBI - National Institute of Securities Market (NISM) in May this year.

However, it is clear that this shift is impacting their value chains. ESG considerations, when adopted by value chain partners and MSMEs, can significantly reduce the risks to business operations and enhance the Industry’s resilience. To resolve the challenges related to the ‘ESG Disclosures for Value Chains’ (as per the requirements for BRSR Core), CII’s focussed consultations on SEBI’s mandate for 75 per cent value chain partner compliance aimed at re-evaluating this threshold and make it more adaptable for businesses.

In response to CII's suggestion, SEBI proposed to reduce the required percentage of value chain partners for ESG disclosures. Subsequently, the regulatory body came forward with a Consultation Paper on the Recommendations of the Expert Committee for facilitating ease of doing business with respect to the BRSR. The paper proposes a new definition for value chain: Value Chain shall include upstream and downstream partners of a listed entity, with each partner accounting for 2 per cent or more of the entity’s purchases or sales (by value). CII facilitated SEBI in obtaining inputs for this consultation paper and this definition was supported by a majority of organisations.

In June 2024, CII, as part of SEBI’s Industry Standards Forum (ISF), formed a Core Group and held consultations to gather feedback on the draft BRSR Core Reporting Standards and simplified reporting of BRSR Core attributes. Another key focus area of CII is working with MSMEs and value chain partners by providing them with diagnostics as well as tools to integrate sustainability. CII currently engages with more than 500 MSMEs and value chain partners around the country in 10 clusters.

While Government incentives and schemes, mentoring by Industry and financial support from institutions will be integral to the transformation of the value chains, sustainable finance has a crucial role to play in the transition, particularly for SMEs. Going forward, CII hopes to work collaboratively with SEBI, financial institutions, Industry and MSMEs to resolve this critical impediment.

Building an environment of trust, transparency and accountability matters and CII will continue to work extensively with the regulatory body to resolve issues and bring guidance where required.