Sebi Mandates Green Credit Program Disclosure: Boosting Sustainability in Capital Markets

Sebi has mandated listed companies to disclose details about their 'Green Credit Program' under the BRSR framework, beginning FY 2024-25. Green credits can be earned through environmental initiatives and disclosed with value chain partners' data. This aims to enhance corporate sustainability and align with India's ecological objectives.

The Securities and Exchange Board of India (Sebi) has announced a new mandate requiring listed companies to provide disclosures related to the 'Green Credit Program' under the Business Responsibility and Sustainability Reporting (BRSR) framework, effective from the fiscal year 2024-25.

Under the updated framework, companies can earn green credits by initiating environmental restoration activities, such as tree plantations on degraded lands, with value chain partners. These credits will serve as indicators of environmental leadership as per Principle 6 of the BRSR. Sebi also refined the definition of 'value chain partners,' which includes entities comprising 2% or more of a company's purchases or sales, with a disclosure limit covering 75% of transactions.

For initial ESG disclosures in the fiscal year 2025-26, companies have the option to include data from 2024-25. By 2025-26, the top 250 companies, and by 2026-27 the top 1,000, will undergo mandatory BRSR Core assessment to foster broader sustainability accounting across the sector, reflecting India's commitment to detailed environmental standards.

(With inputs from agencies.)