A business’s performance, which was traditionally  linked to pure-play financial and economic metrics, is now also taking full cognizance of the potential Environmental, Social and Economic (ESG) value erosion it can lead to.

Sustainability is no longer an option. From regulatory requirements to stakeholder and customer demands, it is becoming an emerging need for businesses to incorporate such practices and to make the right disclosures.

Emerging compliances in Sustainability:

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1. BRSR (Business Responsibility and Sustainability Report) - Compulsory reporting by top 1,000 listed companies in India (by market cap) from FY 22-23 onwards. It is a framework designed by the Securities and Exchange Board of India (SEBI) to encourage companies to integrate sustainable and responsible business practices into their operations. The BRSR reporting forms part of the company's annual reports.

2. BRSR Core Reporting and Assurance - Compulsory for top 250 listed companies in India (by market cap) from FY 24-25 onwards, with assurance beginning from the following year. It is a sub-set of the BRSR (Business Responsibility and Sustainability Report), comprising nine Key Performance Indicators (KPIs) such as job creation in small towns, openness of business, gross wages paid to women and other ESG factors that need to be assured. Moreover, assurance in relation to ESG compliance of the organization's top upstream and downstream value chain, i.e. key vendors, distributors, partners etc. will also be required.

3. European Union's CBAM (Carbon Border Adjustment Mechanism) or Carbon tax on imports from 1st Oct'23 onwards - Under this, goods imported into the EU will be subject to CBAM, where a fee is imposed based on the carbon footprint associated with the production of the Supplier. CBAM will initially apply only to imports of certain goods and selected precursors whose production is carbon-intensive and at most significant risk of carbon leakage like cement, iron and steel, aluminium, fertilizers, electricity and hydrogen.