ESG compliance in India: a guide for SMEs
India has introduced the Business Responsibility and Sustainability Report (BRSR) framework for listed companies, making it one of the most significant ESG reporting regimes in Asia. Indian SMEs supplying large listed companies or exporting to the EU and UK face growing ESG data demands from multiple directions.
Educational content only. The information on this page is provided for general awareness and does not constitute legal, financial, or professional advice. Regulatory requirements vary by jurisdiction, company structure, and sector. Always consult a qualified adviser before making compliance decisions.
The regulatory landscape
- BRSR (Business Responsibility and Sustainability Report) — mandatory for the top 1,000 listed companies by market capitalisation from FY2023. BRSR Core (a subset of key indicators) is mandatory from FY2024. SEBI has signalled that BRSR requirements will extend to the supply chains of these companies — meaning Indian SME suppliers will face ESG data requests.
- BRSR Supply Chain Disclosure — from FY2025, the top 250 listed companies must disclose BRSR Core indicators for their top suppliers and value chain partners. This directly affects Indian SMEs in those supply chains.
- Companies Act 2013 — CSR obligations — companies with net worth >₹500 crore, turnover >₹1,000 crore, or net profit >₹5 crore must spend 2% of average net profit on CSR activities and report on them annually.
- BIS and Quality Standards — India's Bureau of Indian Standards is developing sustainability standards aligned with ISO frameworks, which will affect product certification requirements.
Supply chain obligations — EU and UK buyers
Indian SMEs exporting to the EU face CSRD supply chain obligations from their EU customers. EU CSDDD (Corporate Sustainability Due Diligence Directive) explicitly requires EU companies to conduct due diligence on their Indian suppliers — covering labour rights, environmental standards, and governance.
UK buyers subject to the Modern Slavery Act and UK SDS will similarly request supply chain data from Indian suppliers. India is specifically identified as a high-risk sourcing country in many UK modern slavery risk assessments.
Practical priorities for Indian SMEs
If you supply to any of India's top 250 listed companies, check whether they have issued BRSR supply chain questionnaires. From FY2025, this is mandatory for them.
If you export to the EU or UK, review your buyers' supplier codes of conduct. EU CSDDD and UK Modern Slavery Act create specific due diligence obligations for your buyers regarding your operations.
Begin tracking Scope 1 and 2 emissions. BRSR Core requires GHG emissions data, and EU/UK buyers will request this as part of their Scope 3 reporting.
Document your labour practices, health and safety policies, and grievance mechanisms. These are the most commonly scrutinised areas in EU and UK supply chain due diligence.
Key resources
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