As India’s economic landscape evolves, ESG (Environmental, Social, and Governance) compliance has become a cornerstone for businesses looking to establish and deepen their footprint in the country. For foreign companies entering India in 2025, a strategic focus on sustainability reporting and transparent ESG practices is not just good governance—it’s a business imperative in a rapidly maturing regulatory environment.
India’s ESG compliance framework is spearheaded by the Securities and Exchange Board of India (SEBI), which has introduced structured reporting through the Business Responsibility and Sustainability Reporting (BRSR) format. This regulation mandates that the top 1,000 listed companies file annual BRSR reports, while the top 250 companies must follow the more rigorous BRSR Core standards. These standards require not only disclosures on environmental factors like carbon emissions, water and energy use, and waste management, but also on social criteria such as labor practices, employee welfare, diversity initiatives, and community engagement.
For foreign businesses, adapting to India’s ESG norms is essential. The Indian approach expects companies to extend their disclosures beyond their own operations into their supply chain. From FY 2025-26, the top 250 listed companies must report on the ESG performance of 75% of their value chain, bringing partners and suppliers into the compliance fold. Third-party assurances are mandatory for several key ESG metrics, making data quality, transparency, and reliability critical.
Sustainability reporting in India draws inspiration from global benchmarks like the GRI and TCFD, but with an Indian context. Reports must be accessible to the public, often appearing alongside financial disclosures on company websites and stock exchanges, signaling a move towards stakeholder inclusivity and regulatory alignment with global norms.
The business benefits of effective ESG compliance and sustainability reporting are clear. Companies gain enhanced investor trust, improved access to green financing, and a reputation for responsible growth. In addition, aligning with ESG mandates can unlock competitive advantages, as many Indian consumers and international partners now prefer sustainable brands and transparent supply chains.
Foreign businesses in India must also contend with local challenges: collecting consistent ESG data across diverse operations, bridging cultural differences in governance standards, and staying updated with dynamic regulatory reforms. Success hinges on a proactive strategy—appointing dedicated sustainability teams, engaging Indian stakeholders, and leveraging global best practices for local implementation.
Ultimately, India’s robust ESG compliance environment represents an opportunity: by embracing sustainability, foreign businesses can contribute to India’s developmental goals while future-proofing their own growth in a vital, dynamic market.