BRSR Core

A company can report its own carbon, water and safety numbers honestly and still hide the damage. It simply buys from somebody who does the dirty part.

BRSR Core closes that gap. It takes a short list of hard measures and asks the listed company to report them not only for itself but for its value chain — the suppliers it buys from and the partners it sells through.

SEBI kept the list short on purpose. There are 9 specified key performance indicators. A long list would be unanswerable for a supply chain of thousands of firms.

And the chain has an edge. Value chain here means the top upstream and downstream partners that together make up 75% of the company's purchases or sales by value. A company does not have to chase every small vendor.

The disclosure goes into the annual report, alongside the rest of the BRSR.

Why it matters to an AIF manager is simple. This is the ESG data that will actually exist for an Indian investee company. Anything else has to be gathered by hand.

Section 7.1.8 traces the reporting chain and BRSR Core is the last link in it.

The path SEBI took.

The 75% test. For this purpose, value chain shall encompass the top upstream and downstream partners of a listed entity, cumulatively comprising 75% of its purchases and sales, by value, respectively. Note the word respectively: 75% of purchases on the upstream side, and separately 75% of sales on the downstream side. It is two lists, not one.

What the workbook does not give. It does not name the 9 KPIs, and it does not state an assurance level or an implementation date for the value chain disclosure. The figures it gives are 9 and 75%, and the coverage figures 100, 500 and 1,000. Anything more precise carried into the exam comes from outside this paper.

The companion reform, same date. The circular dated 12 July 2023 also introduced a comprehensive regulation for ESG Ratings and ESG Rating Providers (ERPs), covering the types of ESG ratings and scores, the business of an ERP, the rating process, and disclosures and reporting.

Why a fund manager reads it. BRSR sits in the chapter on ESG because ESG is where AIF money is going. The workbook records that several established players are launching ESG compliant funds, and that offshore AIF investors — investing either through off-shore funds or domestic AIFs — are seeking ESG compliant investing themes. It also notes that Corporate Social Responsibility, often mistaken for ESG in India, is only a small part of ESG, and that ESG differs from the older Socially Responsible Investment because SRI relies on negative screening while ESG pursues a larger good without overlooking financial or economic viability.

Godavari Textiles Ltd is among the top 1,000 listed entities by market capitalisation, so it files a BRSR. For FY 2025-26 it must also make the value chain disclosure as per BRSR Core in its annual report.

Step 1 — draw the upstream list. Annual purchases total Rs 4,000 crore.

The cumulative total crosses 75% at Tapi Packaging. So four suppliers are in scope, and the remaining 214 are not.

Step 2 — draw the downstream list separately. Annual sales total Rs 5,000 crore.

Three customers are in scope.

So Godavari reports the 9 BRSR Core KPIs for itself and gathers them from seven value chain partners in total — four upstream and three downstream. Not 275.

Why the split matters. A candidate who applies 75% to the combined Rs 9,000 crore of purchases and sales gets a different, wrong list. The workbook says 75% of purchases and 75% of sales respectively.

What an AIF manager does with it. Sahyadri ESG Fund, a Category II AIF, is evaluating Godavari as an investee. Its diligence team does not have to build an ESG picture from nothing — it reads Godavari's BRSR for the company and the BRSR Core disclosure for the seven partners, and looks separately at whether an ESG rating provider registered under the July 2023 regulations has rated it.

Chapter 7 (Alternative Investment Funds Ecosystem), section 7.1.8 on Environmental, Social and Governance, carries the BRR to BRSR to BRSR Core sequence and the ESG Rating Provider regulation, immediately before section 7.1.8's companion material on the Stewardship Code.

The recall questions are numeric and easy to set: how many KPIs does BRSR Core specify (9), what share of purchases or sales defines the value chain (75%), how many listed entities file a BRSR (top 1,000 by market capitalisation, from FY 2022-23), and when did BRR start and for how many companies (August 2012, top 100). The conceptual question is the BRSR versus BRSR Core distinction: BRSR is the company's own standardised ESG disclosure, BRSR Core is the 9-KPI subset extended to its value chain.

• BRSR Core is not a separate report. It is the specified core set of KPIs, disclosed for the value chain, as part of the annual report.
• 9 KPIs and 75% of purchases or sales. Both numbers come from the 12 July 2023 circular and both get misremembered as the other.
• 75% applies to purchases and to sales separately. Upstream and downstream are two lists.
• Top 1,000 for BRSR; top 100 for the original BRR in August 2012. The BRR was widened to 500 and then 1,000 in stages.
• BRSR is mandatory from FY 2022-23, under the 10 May 2021 circular — a reporting year, not the circular year.
• CSR is not ESG. The workbook says CSR is only a small part of ESG and is often mistaken for it in India.
• SRI screens out; ESG does not stop at screening. SRI relies on negative screening, while ESG pursues a larger good without overlooking financial viability.
• The workbook does not name the 9 KPIs or state an assurance level. Do not supply either from memory of another source.