ESG & Sustainability Services

How Did ESG Reporting in India Reach This Point? India's ESG reporting journey has been defined by progressive regulatory intent. For over a decade, listed companies were expected to report on their business responsibility practices, but the framework remained largely narrative and discretionary. Structured, comparable, and independently verified ESG data was the exception, not the norm.  The inflection point came in 2021, when the Securities and Exchange Board of India (SEBI) replaced the Business Responsibility Report (BRR) with the Business Responsibility and Sustainability Report (BRSR), mandating it for the top 1,000 listed entities from FY2022-23. For the first time, sustainability disclosures had standardised metrics, defined principles, and measurable KPIs.  However, standardisation alone did not resolve the credibility question. Disclosed data, however well structured, remained unverified. Investors, lenders, and regulators increasingly demanded that ESG metrics carry the same evidentiary weight as financial figures. That demand gave rise to BRSR Core and, with it, the requirement for independent assurance on a defined set of key ESG performance indicators  under 9 ESG attributes  It is within this context that BRSR Core assurance emerges as the next phase in India's ESG evolution, a shift from reporting intent to validated performance. For companies now falling within SEBI’s phased assurance thresholds , the question is no longer whether to engage with assurance, but how to build systems that can sustain it. This transition is accelerating demand for credible BRSR assurance services in India.  What Is BRSR Core? Understanding the Framework BRSR Core is a focused subset of the broader BRSR framework, built around a specific set of decision-relevant ESG metrics that are standardised enough for independent verification. While the full BRSR covers a wide range of qualitative and quantitative disclosures, BRSR Core narrows the scope to high-impact, comparable indicators supported by standardized intensity ratios and other verifiable metrics across environmental, social, and governance dimensions.  Structurally, BRSR Core covers nine ESG attributes identified by SEBI as critical for comparability and assurance . These attributes span environmental, social, and governance dimensions, including:  Greenhouse gas footprint (Scope 1 and Scope 2)  Energy footprint  Water footprint  Embracing circularity - details related to waste management by the entity  Enabling Gender Diversity in Business  Enhancing Employee Wellbeing and Safety  Enabling Inclusive Development  Fairness in Engaging with Customers and Suppliers  Open-ness of business  Together, the KPIs under these attributes form the audit-ready core of India's ESG reporting architecture. The SEBI circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 issued on 12 July 2023 formally established this framework and introduced the phased mandatory assurance schedule.  What Is the Phased Rollout Timeline? SEBI has implemented BRSR Core assurance requirements progressively, based on market capitalisation. The complete phased schedule is as follows:  FY2023-24: Top 150 listed entities  FY2024-25: Top 250 listed entities  FY2025-26: Top 500 listed entities   FY2026-27: Top 1,000 listed entities   This phased schedule means that companies entering scope in any given year must be prepared for assurance before the close of their reporting period. For example, companies ranked between 251 and 500 face their first year of mandatory assurance in FY2025-26,  requiring  scoping of engagements, assessment of internal controls , and readiness evaluation well before the reporting cycle concludes on 31 March .  A critical dimension that is often underestimated: from FY2026-27, the top 250 companies are also required to obtain assurance on value chain ESG disclosures on voluntary basis, covering upstream suppliers and downstream distributors.   Why Does the Move to Assurance Matter?Why Does the Move to Assurance Matter? The shift from disclosure to assurance is not administrative. It represents a structural change in how ESG data is produced, governed, and evaluated.  Historically, sustainability disclosures relied on internally reported figures with no external validation. This improved transparency but left open questions around accuracy, comparability, and the risk of greenwashing. Boards and investors had no independent basis for trusting the numbers.  BRSR Core assurance directly addresses this by introducing independent verification of ESG metrics. Unlike certification, which delivers a pass-or-fail outcome, assurance provides a professional opinion on the reliability of disclosures, based on evidence-backed evaluation of data, processes, and controls.  ESG data is now actively used in investment decisions, lending assessments, credit ratings, and regulatory risk analysis. As a result, its credibility has become as important as its availability. For companies, this changes the nature of ESG reporting entirely. It is no longer sufficient to disclose data. Organisations must now ensure that data is traceable, consistent, and verifiable.  What Changes in Practice for Companies? The introduction of BRSR Core assurance materially changes how ESG data is prepared, governed, and reviewed within organisations.  Central to this transition is SEBI’s requirement that companies obtain  assurance of their BRSR Core disclosures. Reasonable assurance remains the defined benchmark and represents a notably high standard. Unlike limited assurance, which relies on analytical review and plausibility checks, reasonable assurance involves detailed testing of underlying data, validation of calculation methodologies, assessment of internal control systems, and sampling across business units and sites.  This brings ESG reporting closer in rigour to financial audits. Companies must maintain clear evidence trails for all BRSR Core KPIs, supported by documentation, defined methodologies, and controlled processes. Data that was previously collated at year-end must now be tracked and validated continuously throughout the reporting cycle.  In parallel, ESG reporting is becoming more integrated with financial reporting systems, requiring closer coordination between sustainability, finance, and compliance functions. For many organisations, this represents a transition from fragmented, spreadsheet-driven practices to a more governed and traceable data environment. This shift is accelerating engagement with structured BRSR assurance services in India to support readiness, gap assessment, and validation.  How Does a BRSR Core Assurance Engagement Work? From a consulting and implementation standpoint, BRSR assurance follows a structured methodology grounded in established standards.  The engagement begins with defining the scope, including reporting boundaries, and the assurance level to be applied. A detailed planning phase follows, in which assurers assess risks associated with data accuracy, internal controls, and reporting processes.  The core of the engagement is data verification and testing. This involves validating disclosed figures against source records, reviewing calculation methodologies and underlying assumptions, and performing sampling across business units or plant locations. Assurers also evaluate the effectiveness of internal controls, including standard operating procedures, approval workflows, and data validation mechanisms.  Gaps and inconsistencies are documented, management responses are assessed, and the engagement concludes with the issuance of an assurance statement, which reflects the assurer's independent opinion on the reliability of the BRSR Core disclosures.  The key insight this process surfaces: assurance does not simply verify numbers. It evaluates the systems and processes that generate those numbers. A disclosure that appears complete but lacks supporting evidence may not withstand scrutiny. Conversely, a disclosure that acknowledges limitations but is supported by clear methodologies and documented controls is often more defensible.  Who Drives Assurance Readiness Internally? BRSR Core assurance is an organisation-wide responsibility, not a standalone ESG activity. Multiple functions must coordinate to produce and sustain audit-ready disclosures.  Board and senior management: oversight, accountability, and tone at the top  ESG and sustainability function: process coordination and KPI ownership  HR, operations, procurement, and finance: data generation and underlying records  Plant and unit teams: source-level documentation and evidence maintenance  Internal audit: reliability checks, control testing, and assurance readiness  Technology teams: data traceability, system integration, and automated validation  Company Secretary: regulatory alignment with SEBI requirements and statutory filings  This multi-layered involvement underscores the need for clearly defined ownership, documented processes, and coordinated governance. Where these elements are absent, even complete-looking data will struggle under assurance.  Which Standards and Frameworks Govern BRSR Core Assurance? BRSR Core assurance draws on a combination of globally recognised standards, which provide structure and consistency to engagement methodologies.  ISAE 3000 (revised): The primary international standard for non-financial assurance, widely used in audit-led BRSR engagements  AA1000AS: Adds a stakeholder-centric dimension, focusing on materiality, completeness, and responsiveness  ISSA 5000: An emerging global standard expected to progressively harmonise sustainability assurance practices  ISAE 3410: Assurance engagements on GHG statements  Indian Standards: SSAE 3000 (Assurance  on sustainability information) and SAE 3410 (Assurance  on GHG statements)  In practice, assurance engagements often draw on multiple standards simultaneously to balance technical rigour with stakeholder relevance. The choice of standards is typically agreed between the organisation and the assurance provider during the scoping phase.  What Are the Operational Challenges for Companies Under BRSR Core Assurance? As the BRSR Core assurance requirement expands across companies in SEBI’s phased rollout, the operational implications are significant and varied.  Many companies continue to rely on manual processes and spreadsheets for ESG data collection, which creates challenges under reasonable assurance. Data gaps, inconsistent methodologies across sites, and weak evidence trails are among the most common issues surfaced during assurance engagements. As a result, there is a growing demand for technology-enabled ESG reporting platforms that provide data traceability, automated validation, and audit-ready documentation.  Complex measurement areas, including Scope 1 and Scope 2 emissions calculations, water intensity metrics, and social indicators such as workforce diversity ratios and wage data, add further challenges. These often require coordination with third-party data sources, HR systems, and operational databases, increasing the need for structured data governance.  For companies entering the assurance requirement for the first time, the most common mistakes include treating assurance as a year-end exercise, underestimating the evidence burden for the BRSR Core KPIs, and failing to assign clear ownership across functions. Engaging experienced BRSR assurance services in India early in the reporting cycle significantly reduces these risks.  A Practical Approach to BRSR Core Assurance Readiness Given the scale of internal change required, organisations are increasingly adopting a structured readiness approach rather than treating assurance as a one-time compliance exercise.  The starting point is an honest assessment of current reporting maturity, benchmarked against the BRSR Core KPIs. This identifies which data points are already traceable, which lack documentation, and where calculation methodologies need to be formalised.  From there, the focus shifts to strengthening governance frameworks, defining ownership across functions, and establishing standardised data collection processes. Technology implementation plays a central role at this stage, whether through dedicated ESG platforms or integration with existing ERP and HR systems.  Many organisations conduct mock assurance assessments before formal engagement, which surface evidence gaps and control weaknesses while there is still time to address them. Critically, this readiness work should be treated as an ongoing capability, not a one-time exercise. As assurance requirements expand to include value chain disclosures and new KPIs, the organisations with strong foundational systems will adapt most effectively.  Pierag's ESG and Sustainability practice supports organisations across this full readiness journey, from gap assessment and governance design through to assurance preparation, execution of BRSR Core assurance engagements, and ongoing ESG reporting.   What Does the Road Ahead Look Like? BRSR Core assurance is expected to expand in both scope and depth. A key development is the requirement for value chain disclosures by the top 250 companies, which commenced on a voluntary basis from FY 2025-26, with assurance of these disclosures applicable from FY 2026-27 on voluntary basis. This requires organisations to collect and verify ESG data from upstream suppliers and downstream distributors, a step that demands early engagement with value chain partners and robust third-party data protocols.  Regulatory scrutiny is also expected to intensify, particularly around data integrity, consistency across reporting periods, and the quality of internal controls supporting BRSR Core KPI calculations.   Globally, the convergence of sustainability assurance standards, particularly the emergence of ISSA 5000, is likely to progressively align Indian assurance practices with international frameworks, increasing comparability and investor confidence in BRSR Core disclosures.  Conclusion BRSR Core assurance marks a decisive shift in India's ESG landscape, moving from disclosure-driven reporting to system-driven validation. For companies now falling within SEBI’s phased assurance thresholds, this transition calls for more than compliance. It requires a fundamental rethinking of how ESG data is generated, governed, and verified across the organisation.  The KPIs across nine ESG attributes that form BRSR Core are not simply a reporting checklist. They are the foundation of a credible, audit-ready sustainability practice. Organisations that invest now in building robust controls, clear ownership structures, and traceable data systems will not only meet the current assurance requirement, but will be better positioned as the scope expands to value chain disclosures and the top 1,000 listed entities.  As BRSR assurance services in India continue to evolve, the focus is converging on a straightforward but critical outcome: sustainability reporting that is not only comprehensive, but credible, consistent, and defensible.  Frequently Asked Questions What is BRSR Core assurance?  BRSR Core assurance is the independent verification of a company's key ESG performance indicators under India's BRSR framework. It involves a professional assurance provider reviewing the data, processes, and controls behind  specific KPIs across nine ESG attributes and issuing an opinion on their reliability. SEBI has mandated assurance, the highest standard, for India's top listed companies on a phased schedule.  What is the difference between BRSR and BRSR Core?  BRSR is the full Business Responsibility and Sustainability Report, which covers a wide range of qualitative and quantitative ESG disclosures across nine NGRBC principles. BRSR Core is a curated subset of BRSR, focused on high-impact KPIs that are standardised and measurable enough for independent assurance. BRSR Core carries stricter requirements, including mandatory assurance for the top 1,000 listed entities in a phased manner.  What is the difference between limited assurance and reasonable assurance?  Limited assurance involves analytical review and plausibility checks, resulting in a conclusion that nothing came to the assurer's attention that would suggest the disclosures are materially misstated. Reasonable assurance,  involves a higher level of evidence gathering, including detailed data testing, sampling across sites, and internal controls assessment. It results in a positive opinion on the reliability of the disclosures.  Which companies need BRSR Core assurance in FY2026-27?  All listed entities ranked within the top 1000 by market capitalisation are required to obtain reasonable assurance on their BRSR Core disclosures for FY2026-27. This includes:   Top 150 entities, who have been subject to the requirement since FY2023 24  Companies ranked 151 to 250, who have been subject to the requirement since FY2024 25  Companies ranked 251 to 500, who entered scope in FY2025 26  Companies ranked 501 to 1,000, who are entering the assurance requirement for the first time in FY2026 27  In addition, the top 250 companies are required to provide value chain ESG disclosures on a voluntary basis, with assurance of those disclosures also applicable from FY2026 27.  What are the nine attributes of BRSR Core?  BRSR Core is structured around nine ESG attributes aligned with SEBI's nine NGRBC principles. These cover: Open-ness of business; fairness in engaging with customers and suppliers; enabling inclusive development; enabling gender diversity in business ; enhancing employee wellbeing and safety; Embracing circularity - details related to waste management by the entity; water footprint; energy footprint; and GHG footprint.    

The report highlights a clear shift in the global ESG landscape from policy ambition to execution, enforcement, and measurable accountability. Across jurisdictions, regulators and standard-setters are converging on one direction—making sustainability data more comparable, auditable, and decision-useful. A key theme is the rise of implementation-heavy regulation. In the EU, this is visible through new frameworks such as standardized transport emissions accounting, stricter steel import quotas with traceability requirements, circularity mandates for automotive design, and clarified rules for chemically recycled plastics. These measures collectively reinforce a stronger push toward industrial decarbonization and circular economy adoption backed by enforceable rules rather than voluntary commitments. On the climate and energy transition side, China and the EU emerge as dominant policy drivers. China’s multi-year industrial decarbonization plan and its formal recognition of renewable hydrogen, ammonia, and methanol as part of non-electric renewable energy reflect deep integration of clean fuels into compliance systems. The EU, meanwhile, is accelerating digitalization of energy systems, biomethane market development, and urban mobility transformation to support broader Green Deal objectives. In global sustainability standards and disclosures, major institutions are tightening alignment: ISO introduces net-zero transition planning standards for financial institutions SBTi Version 2.0 shifts focus from target-setting to execution and delivery CDP expands disclosure to include ocean-related data TNFD strengthens nature-related financial reporting frameworks Together, these developments indicate a broader move toward integrated environmental and financial accountability. The social and governance dimension is also evolving rapidly. The ILO’s platform economy convention strengthens protections for digital workers, while the U.S. CBP tightens forced-labor enforcement expectations across global supply chains. In India, CSR regulations now allow structured impact investing through Social Stock Exchange instruments, signaling a shift toward outcome-linked social financing. Across all themes, a consistent message emerges: ESG is no longer a reporting exercise—it is becoming a core governance and risk management discipline, with internal audit and assurance functions playing a critical role in validating data integrity and ESG maturity. Read and download the full ESG Perspective report (July 2026 edition) to access the complete insights and implications for your organization.

BRSR Reporting in India: Full Compliance Guide for Listed Companies  India's sustainability reporting landscape changed permanently on the day SEBI mandated BRSR for the country's top 1,000 listed companies. Four years into that mandate, one pattern has become impossible to ignore: companies that treat BRSR as a compliance task produce reports that satisfy a regulator. Companies that treat it as a governance discipline produce reports that attract capital, reduce risk, and set the agenda in their sector.  This document is written for CFOs, Company Secretaries, Heads of Sustainability, and Audit Committee members who want to understand not just what BRSR requires, but what separates a credible, investor-ready BRSR report from one that merely fills pages in an Annual Report.  What Is BRSR and Why It Is Not the Same as the Old BRR  The Business Responsibility and Sustainability Report (BRSR) was notified by SEBI in May 2021 and replaced the earlier Business Responsibility Report (BRR). The shift was substantive, not cosmetic. Where the BRR asked companies to describe their policies, BRSR demands quantitative performance data - numbers that can be tracked, trended, compared, and assured.  BRSR is grounded in the National Guidelines on Responsible Business Conduct (NGRBC), issued by the Ministry of Corporate Affairs, which define nine principles of responsible business. Every listed company in the top 1,000 by market capitalisation on BSE and NSE must now disclose how their business performs and not just how it is governed against each of those nine principles.  The nine NGRBC principles cover ethics and transparency (P1), sustainable products and services (P2), employee well-being (P3), stakeholder responsiveness (P4), human rights (P5), environmental stewardship (P6), responsible policy advocacy (P7), inclusive growth (P8), and consumer responsibility (P9). Together, they map onto the three pillars of ESG - environmental, social, and governance making BRSR India's most comprehensive ESG disclosure framework to date.  Who Must File BRSR and What the Phased Expansion Means  BRSR became mandatory for the top 1,000 listed entities by market capitalisation beginning FY 2022-23. The applicability is assessed at the end of the calendar year i.e., 31 December on the basis of average market capitalisation from 1 July to 31 December, so boards must monitor whether their company is approaching or crossing this threshold. Voluntary adoption is encouraged for companies beyond the top 1,000, and those who begin early are materially better positioned when the mandate reaches them.   More significantly, SEBI has been deliberate about expanding BRSR's scope in phases. BRSR Core – a defined subset of BRSR indicators within BRSR is applicable to all companies preparing BRSR. External assurance of BRSR Core, however, has been mandated in a phased manner:  for the top 150 listed companies from FY 2023-24, expanding to the top 250 from FY 2024-25, the top 500 from FY 2025-26 and the top 1000 from FY 2026-27. This phased architecture is SEBI's clearest signal that BRSR is not a one-time disclosure event. It is a permanent, deepening feature of India's capital market governance.  For companies that are not yet in the top 1,000 but are growing toward that threshold, voluntary BRSR adoption is not just a goodwill gesture. It is a head start on data infrastructure, governance processes, and stakeholder communication that cannot be built overnight. Pierag's ESG & Sustainability Reporting and Assurance practice works with organisations at every stage of this readiness journey, from first-time voluntary reporters to companies already preparing BRSR and those mandated to undergo assurance requirements.  The Structure of BRSR: What the Three Sections Actually Require  BRSR is divided into three sections, and understanding their purpose is essential to preparing a disclosure that functions as more than a regulatory filing.  Section A - General Disclosures covers the company's identity and basic profile. It includes details of business activities, product and service categories, locations of plants and offices, employee and worker headcount (permanent and contractual, disaggregated by gender), and the structure of holding, subsidiary, and associate entities. It also requires disclosure of CSR obligations, whether the company has met its prescribed CSR spending for the year, and the company’s grievance redressal mechanism.  Section B - Management and Process Disclosures is where governance is documented. For each of the nine NGRBC principles, the company must disclose whether it has a policy in place, identify who governs that policy (including Board-level oversight), and confirm whether the policy extends to the value chain. This section forms the foundation on which the credibility of Section C rests. Weak governance disclosures in Section B undermine even the most robust data presented in Section C.  Section C - Principle-wise Performance Disclosures is the engine of BRSR. For each principle, companies must report against two categories of indicators: Essential Indicators (mandatory) and Leadership Indicators (voluntary, but increasingly expected by ESG rating agencies and institutional investors). The Essential Indicators alone span a wide range of quantitative metrics, including  greenhouse gas emissions, water and energy usage , waste management practices, employee wellbeing and safety measures, gender diversity, pay ratios, CSR programme outcomes, fairness in customer and supplier engagement, among others.  The credibility of Section C depends almost entirely on the data infrastructure a company has built. Companies that lack systems for tracking Scope 1 and 2 GHG emissions at facility level, or that  do not maintain disaggregated workforce safety data, will discover these gaps  during disclosure preparation often under filing pressure, when there is no time to address them properly.  BRSR Core: The Assurance Mandate That Changes Everything  In July 2023, SEBI introduced BRSR Core, with which the BRSR framework has been further strenghthened.  BRSR Core identifies a subset of Key Performance Indicators (KPIs) that are subject to mandatory assurance by an independent third party. The KPI set spans nine ESG attributes: GHG footprint, water footprint, energy footprint , embracing circularity - details related to waste management by the entity, enhancing employee wellbeing and safety, enabling gender diversity in business, enabling inclusive development, fairness in engaging with customers and suppliers, open-ness of business. In addition, companies are required to assess ESG performance across a defined portion of their upstream and downstream value chain; however, external assurance of value chain disclosures remain voluntary rather than mandatory.  Assurance is a high bar compared to self‑certification. It means the assurance provider must gather sufficient and appropriate evidence to conclude positively that the reported data is free from material misstatement. Self-certification or management attestation does not satisfy this requirement.  This matters for several practical reasons. First, the data underpinning BRSR Core KPIs must be generated by systems that have been designed for external validation. Ad hoc spreadsheet aggregation across business units will not hold up under third-party scrutiny. Second, the internal controls over that data must be documented and tested. Third, material discrepancies between assurance findings and reported figures create regulatory exposure.  Organisations preparing for BRSR Core assurance need a reporting and verification partner who understands both the sustainability framework and the assurance standards. Pierag's ESG & Sustainability Reporting and Assurance practice is built specifically for this level of rigor. Our team includes professionals from diverse backgrounds - Chartered Accountants, Company Secretaries, Engineers, Environmentalists, Lawyers and specialists with advanced qualifications such as Masters in Sustainability, DipIFR (ACCA,UK), and certifications as GHG Accounting Lead Verifiers under ISO 14064.  The Five Compliance Gaps That Derail Most BRSR Filings  Having worked across listed companies at different stages of BRSR readiness, five failure patterns appear with regularity.  Gap 1: No system for Scope 1 and Scope 2 GHG data. Principle 6 under BRSR requires GHG emissions disclosure, and BRSR Core mandates its assurance. Most companies discover they have utility bills but no standardised protocol for converting them into CO2e figures across business units, fuels, and refrigerants. Building a GHG inventory aligned with a recognised framework (such as the GHG Protocol, ISO 14064, or IPCC Guidelines) takes time and requires clear methodology decisions that should not be made under time pressure.  Gap 2: Value chain blindspots. BRSR requires companies to assess the ESG performance of their upstream and downstream value chain specifically the top suppliers and customers by purchase and sales value. For most Indian manufacturers and service companies, this means engaging counterparties who have never been asked sustainability questions before. Companies that begin the value chain engagement 12 to 18 months early are far better positioned than those who attempt it in the quarter the report is due.  Gap 3: Workforce data that cannot be disaggregated. BRSR requires headcount, turnover, employee wellbeing measures, training participation, and pay data to be broken down by gender, permanent and contractual status, and often by category of employees and worker. HR systems that were not designed with BRSR in mind frequently cannot produce this disaggregation without significant manual effort, which introduces error and is difficult to assure.  Gap 4: Prior-year inconsistencies. BRSR requires prior-year comparatives for most quantitative metrics. Companies that change their data collection methodology over the years - or that simply did not collect certain data points in prior years - face the uncomfortable choice between restating figures or disclosing gaps. Neither option is cost-free from a credibility standpoint, as both raise questions about data reliability and governance maturity.  Gap 5: Fragmented ownership of ESG reporting. BRSR preparation requires data from diverse functions such as Company Secretary, HR, Finance, Operations, Utilities, Marketing, and CSR, among others. When ESG reporting is treated as a siloed exercise led by a single department, the result is incomplete or fragile data. Effective governance demands a coordinated, cross‑functional approach where each function owns its data and internal controls, while oversight is exercised at a higher governance level typically the Board, Audit Committee, or a designated ESG Governance Committee. Without this integration, assurance providers and ESG rating agencies quickly detect inconsistencies, undermining credibility.  BRSR and GHG Reporting: The Scope 3 Question  BRSR's current mandatory scope for GHG reporting covers Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from purchased energy). Scope 3  emissions from the value chain, including purchased goods, employee commuting, waste, and the use of sold products is presently a Leadership Indicator and is not yet mandatory.  However, listed companies with global investors, export-oriented businesses, or supply chain partners in the EU are finding that Scope 3 is being asked for regardless of whether SEBI has mandated it. ESG rating agencies score it. Foreign portfolio investors' questionnaires request it. The EU's Carbon Border Adjustment Mechanism (CBAM) is making Scope 3 data commercially relevant for exporters of carbon-intensive products such as iron and steel, aluminium, cement, fertilisers, electricity, hydrogen, and related industrial products.  Companies that invest now in comprehensive GHG inventorisation including Scope 3 estimation  are building an asset that serves BRSR and other global frameworks such as IFRS S2, CDP, and export compliance simultaneously. The earlier this work begins, the more reliable the baseline data becomes, and the more defensible the figures are when they eventually come under assurance scrutiny.  Technology-enabled data collection is increasingly central to scalability. Pierag's Digital Support in ESG solutions help organisations automate emissions data capture, standardise reporting across facilities, and maintain the audit trails that assurance providers require.  The Investor and Capital Market Dimension  BRSR data is not filed in isolation . It  directly shapes how institutional investors - domestic and foreign evaluate listed companies in India.  ESG rating agencies draw on BRSR disclosures to generate company scores. These scores influence index inclusion decisions, ESG fund allocations, and lending covenants attached to green bonds and sustainability-linked loans. A growing share of Indian institutional investors are allocating portions of their portfolios to entities with measurable ESG objectives, and that proportion is rising.  The quality of BRSR reporting is as important as the data itself. A report filed with missing Essential Indicators, absent prior-year comparatives, or internal inconsistencies between sections does not merely lower an ESG rating. It signals to sophisticated investors that the company's governance culture does not extend to non-financial disclosure. Conversely, a report with independently assured or assessed BRSR Core data, comprehensive Section C disclosures, and clear year-on-year trends tells a story of operational discipline.  Access to sustainable finance in India - green bonds, sustainability-linked loans, ESG-themed equity is becoming materially easier for companies with credible, assured ESG disclosures. SEBI's independent assurance mandate,  RBI's renewable energy priority sector classification, and International Capital Market Association (ICMA)-aligned frameworks are converging to make the quality of BRSR disclosures an increasingly important determinant of access to sustainable finance and the terms of capital.  CSR, BRSR, and the Governance Overlap  One area where BRSR compliance intersects with a separate regulatory requirement is CSR. CSR obligations under Section 135 of the Companies Act, 2013 apply to eligible companies, and BRSR Section A requires disclosure of whether these obligations are triggered.  Principle 8 - inclusive growth and equitable development extends this further, requiring details of overall CSR projects, projects in aspirational districts, amount spent, beneficiaries (including vulnerable groups), Social Impact Assessment results, community grievance mechanisms etc..  Integrating CSR reporting with BRSR disclosures creates a coherent, evidence-backed narrative of social value creation. For companies whose CSR compliance is managed separately from their sustainability reporting function, this integration requires deliberate effort - and an honest audit of whether the programmes being funded are generating the kind of outcome data BRSR actually asks for.  Pierag's CSR Advisory practice helps companies design, implement, and document CSR programmes that produce measurable impact, not just spending records, making Principle 8 disclosures a genuine reflection of community investment rather than a compliance entry.  Building an Assurance-Ready BRSR Programme: A Practical Roadmap  High‑quality BRSR reporting is not a once‑a‑year compliance exercise. Leading companies treat it as a year‑round discipline, embedding ESG data governance into everyday operations. The following staged roadmap reflects how organizations prepare for assurance with consistency and credibility:  Stage 1 - Gap Assessment: Conduct a structured review of current data against all BRSR Indicators. Identify data that does not exist, data that exists but cannot be disaggregated as BRSR requires, and data that exists but lacks the audit trail needed for assurance.   Stage 2 - Data Infrastructure Design: For each data gap identified, design the collection mechanism. This may involve integrating with ERP or HR systems, utility billing feeds, or establishing manual collection templates for facilities without automation. Document  methodologies to support assurance. Technology investment at this stage delivers the highest return.  Stage 3 - Materiality Assessment: Conduct a formal materiality assessment to engage internal and external stakeholders to determine which ESG issues and KPIs are most relevant to the company's business model, industry, and geography. Under BRSR, disclosure across all nine NGRBC principles and their Essential Indicators is mandatory; materiality instead guides the depth of reporting, the choice of voluntary Leadership Indicators, and the prioritisation of narrative emphasis in Section C. A documented materiality process ensures that disclosures are purposeful, evidence‑based, and aligned with stakeholder priorities, thereby enhancing the credibility of the overall report..  Stage 4 - Internal Controls and Governance: Assign clear ownership for each BRSR KPI to a designated function and accountable individual. Define and document the control activities such as review, reconciliation and approval that govern each metric. Engage  the internal audit function to test a sample of these controls before the external assurance provider arrives.  Stage 5 - Report Preparation and Review: Draft the complete BRSR, ensuring figures are reconciled  across all sections. Conduct a thorough cross-reference check against other regulatory filings, including Annual Report (with its financial statements), stock exchange disclosures, and the prior-year BRSR. Ensure that qualitative narratives in Sections A and B are consistent with quantitative data in Section C.  Stage 6 – Assurance: For companies requiring assurance of BRSR Core, engage the independent assurance provider well in advance of the filing deadline. Assurance engagements typically require 6 to 10 weeks, depending on the size and complexity of the company. Early engagement provides sufficient time to address any findings and implement corrective actions before the final report is published.  Stage 7 - Post-Filing Strategy Review: Use the completed BRSR as a structured input into the following year's ESG strategy. Review KPIs that underperformed against internal targets or peer benchmarks, and set forward-looking commitments where disclosures exist without defined goals. Brief the Board and Audit Committee on findings and the improvement roadmap.  Building Internal Capability: The Role of ESG Education  One underestimated dimension of BRSR compliance is the gap between what boards and management teams are asked to govern and what they currently understand about ESG and sustainability reporting. Board members who review and approve the BRSR must be able to exercise genuine oversight not simply sign off on a document they cannot interrogate.  This is not just a training issue. It is a governance one. When board members and senior leaders lack fluency in GHG accounting, materiality assessment, or the difference between limited and reasonable assurance, decisions about what to disclose, how to interpret findings, and where to invest in sustainability infrastructure are made without the foundation they require.  Pierag's ESG Learning Academy provides structured capacity-building programmes for boards, audit committees, sustainability teams, and finance functions. The programmes are delivered through structured ESG self‑paced learning modules, customised workshops, training and capacity‑building sessions, and on‑demand courses and webinars. For companies facing BRSR  requirements, this literacy is not optional, it is a governance prerequisite.  Why Pierag: The CA and Assurance Angle  Most ESG advisory firms approach BRSR primarily as a reporting and communications exercise. Pierag approaches it as an assurance and governance discipline, and that distinction is consequential for listed companies whose disclosures face regulatory scrutiny and investor evaluation.  Our ESG and Sustainability practice is led by professionals from diverse backgrounds - Chartered Accountants, Company Secretaries, Engineers, Environmentalists, and Lawyers complemented by specialists with advanced qualifications such as Masters in Sustainabality, DipIFR (ACCA, UK), the ICAI Diploma in BRSR, and certifications as GHG Accounting Lead Verifiers under ISO 14064. Together, they bring deep experience in assurance engagements across large listed companies in India. We understand what an  assurance provider will test because our team has performed those tests. We know what effective ESG data controls must look like because we have designed , reviewed , and reported on them.  This means that when we help a company prepare for BRSR Core assurance, we are not speculating  about  what the assurance provider may find. We are building the data infrastructure and governance controls that meet an independent, evidence-based standard - the same level of rigor applied in statutory financial audits.  Our broader ESG & Sustainability Services practice covers the full spectrum: sustainability reporting and assurance, GHG inventorisation, Life Cycle Assessment, ESG strategy, CSR advisory, digital ESG tools, and structured capacity building. Whether your organisation is filing its first BRSR or preparing for  assurance of BRSR Core for the first time, we can help you move from reactive compliance to strategic ESG leadership.  Compliance Is the Floor. What You Build Above It Determines Value.  BRSR sets a minimum standard for what listed companies must disclose. It does not prescribe how well companies  should perform against those disclosures, or how strategically they should use the discipline of reporting to improve their operations, governance, and  stakeholder relationships.  The companies that will attract long-term institutional capital, access sustainable finance at competitive rates, and build trust with global supply chain partners are not the ones that merely file a compliant BRSR report. They are the ones that embed sustainability into performance measurement, risk management, and decision making and can demonstrate it through independently assured data.  BRSR makes that demonstration possible. What organisations choose to build above the compliance floor determines whether BRSR remains a cost of compliance or evolves into a source of competitive advantage.  Pierag Consulting is here to help you build above the floor. Talk to our ESG and Sustainability experts.  Explore Pierag's latest thinking on ESG, sustainability reporting, and responsible business at our Insights Hub. Author - Surbhi Gulati (Associate Director) and Ashlesha Aggarwal (Consultant)  

Introduction For the past several decades, the global economic growth has been linear, meaning "take, make, dispose". In this system, natural resources are extracted, transformed into products through energy and material intensive processes, and discarded as waste after use. This economic system, although responsible for the fast growth of industries and the utilization of resources, has led to the depletion of resources, the generation of waste, and pollution of the environment. The utilization of materials in the world, for example, has grown from 30 billion tons in 1970 to over 100 billion tons currently, a three-fold increase in five decades. This has led to policymakers, industries, and individuals looking for alternative ways of using resources, and this has led to the development of the circular economy. The Circular Approach A circular economy is a pattern of production and consumption that seeks to extend the useful life of resources. It involves sharing, leasing, reusing, repairing, refurbishing, and recycling. This method of resource use is intended to maximize the life of products and therefore minimize waste and the use of non-renewable resources. The circular economy is also intended to maximize the life of products by making them reusable, recyclable, and the regeneration of natural systems. Despite the growing knowledge of the benefits of a circular economy, only 7.2% of the materials used are recycled or reused. The need for Circular Economy The world economy is still mostly linear and material intensive. It is estimated that 100 billion metric tons of materials are used annually, with most of these materials being non-renewable. The use of materials has been increasing exponentially since the year 2000. The amount of municipal solid waste has surpassed 2 billion tons per year and is expected to increase in the coming decades if the current trend continues. More than half of the total greenhouse gas emissions are attributed to the extraction and processing of materials, thus connecting material use to climate change. The application of circular economic principles is imperative in cutting material demand and emissions. Mapping Circularity in India Of the approximately 60 million tonnes of municipal solid trash produced in India each year, only a small portion is recycled through official channels. To address this, India has been implementing laws under Extended Producer Responsibility (EPR), an approach where producers are responsible for the collection, recycling, and safe disposal of their products. The laws that have been enforced in this regard are the Plastic Waste Management Rules, E-Waste Management Rules, and the Construction and Demolition Waste Management Rules. India is also applying the principles of circular thinking in wastewater management, agricultural waste, and industrial byproduct management. It is estimated that by applying the principles of circular economy, the economy can unlock more than two trillion United States dollars and create nearly ten million jobs by 2050. Although there are numerous benefits of implementing the principles of circular economy, the absence of infrastructure, policies, and awareness are some factors that are slowing down the implementation of circular economy principles on a large scale. Start-ups and civil society organizations are slowly filling this gap and proving the potential of circular economy principles in achieving both environmental and social goals. Ecoboard by EcoYou Ecoboard, an EcoYou venture based out of Pune, Maharashtra, is one such company that is practicing the principles of the circular economy in the construction materials industry. EcoYou produces environmentally friendly particle boards from agricultural waste like sugarcane bagasse, rice husk, cotton stalks, and wheat straw. This helps to reduce the dependence on wood-based products and thus the pressure on deforestation. By using agro-waste to produce hard boards that can be used for furniture and interior decoration, EcoYou helps to prevent the open burning of agricultural waste and thus prevents pollution. Circular Textiles: Goonj Goonj, an NGO in Delhi, is a good example of the circular economy in action, as it processes textile waste from cities to be used in rural areas. The organization takes used clothing and textiles and converts them into useable items such as household goods, school bags, and sanitary napkins. This practice helps keep a huge amount of waste from being disposed of in landfills. The organization also helps underprivileged groups by providing them with affordable basics Although initiatives such as Ecoboard and Goonj demonstrate the potential that circular economy principles hold for India, similar strategies are being adopted across the globe. This is because circular economy is increasingly being recognized as an important tool for addressing climate change, sustainable resource management, etc. Global Perspective Governments are including circular economic initiatives within their Nationally Determined Contributions (NDCs) to The Paris Agreement and Climate Policies. The strategies for circular economy are implemented in the management of waste, production, and food systems. These approaches would reduce global greenhouse gas emissions by as much as 40 % by 2050, and as much as 49 % when food system interventions are considered. Actions such as recycling, repair, and remanufacturing also contribute to the conservation of resources and could provide as many as six million jobs globally by 2030.The global transition showed how circular economic solutions can address different challenges at the same time. The Road Ahead for Circular Economy To bring about the transition to a circular economy, there is a need for collaboration in the areas of legislation, technology, business models, and consumer behavior. The reduction of greenhouse gas emissions, improvement of resource security, and promotion of sustainable economic growth are all possible through the integration of the principles of a circular economy into national climate action plans. To bring about sustainable development and economic resilience, there is a need to scale up the practices of a circular economy, even though the current level of circularity is low. To bring about sustainable development and economic resilience, there is a need to scale up the practices of a circular economy, even though the current level of circularity is low. Author - Aman Vashisth (Consultant)

The latest edition of ESG Perspective explores how the global sustainability agenda is increasingly moving from policy ambition to implementation and accountability. Across jurisdictions, regulators, standard setters, and market participants are introducing frameworks that translate climate and sustainability commitments into measurable action. This edition covers key developments across climate and energy policy, carbon markets, ESG disclosure frameworks, circular economy regulations, water governance, and biodiversity conservation, providing businesses with insights into the regulatory and market shifts shaping the next phase of sustainability. Key insights include: Climate policy developments across the EU, Germany, the UK, and New York, reflecting efforts to balance environmental objectives with economic and implementation realities. Continued evolution of carbon markets through new crediting methodologies, accounting standards, compensation mechanisms, and international capacity-building initiatives. A growing shift from ESG target-setting to implementation, highlighted by new sustainability certification programmes and evolving corporate climate strategies. Strengthened circular economy and waste management frameworks, including extended producer responsibility requirements, digital waste tracking systems, and simplified compliance obligations. Enhanced focus on water resilience and biodiversity protection through updated pollutant monitoring standards, streamlined permitting guidance, and species conservation initiatives. This edition also features Pierag Perspective by Dipesh Khushalani, Director – Technology Risk Advisory, who explores the growing intersection of ESG and technology governance, highlighting the risks of "cyber washing" and the importance of robust systems, controls, and data integrity in building credible sustainability reporting. Read the full ESG Perspective edition and download the complete report from the link below.

A New Era of Trade and Climate Policy The European Union’s Carbon Border Adjustment Mechanism (CBAM) is no longer a distant policy experiment. From 1 January 2026, it became a binding financial obligation for exporters of carbon‑intensive products such as iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity. The EU’s goal is simple but ambitious: prevent carbon leakage, where companies shift production to countries with weaker climate rules, undermining global climate progress. This mechanism is not just about Europe. The EU is the world’s largest single market, and by attaching a carbon price to imports, it is effectively exporting its climate standards worldwide. Any exporter who wants access to Europe must either prove low‑carbon production or pay the difference.  The First Price Signal On 7 April 2026, the European Commission published the first official CBAM certificate price: €75.36 per tonne of CO₂ equivalent Uniform across all sectors Based on the average EU ETS auction clearing prices for Q1 2026 This number is only the starting point. What matters more is the carbon intensity of each product. Steel, for example, is far more carbon‑intensive than aluminium, meaning the same certificate price translates into vastly different burdens. India’s Early Exposure  The impact is already visible even before financial obligations began. During the reporting phase alone: Steel and aluminium exports to the EU fell 24.4% from $7.71 billion in FY24 to $5.82 billion in FY25. Iron and steel exports also saw a sharp contraction during the reporting phase, reflecting the compliance burden and uncertainty faced by EU buyers. This contraction reflects the compliance burden of reporting requirements and the uncertainty EU buyers face when suppliers cannot provide verified emissions data. The financial phase will only amplify this pressure.  The Preparedness Gap  Most Indian manufacturers understand CBAM in theory. Far fewer are prepared in practice. True preparedness requires: Verified plant‑level emissions data aligned with EU standards. GHG accounting systems that meet EU methodology, often requiring 40 to 80 staff hours annually. Without verified data, exporters are forced to rely on EU default values. These are deliberately conservative, often higher than actual emissions, designed to push companies toward verification. Relying on them is not neutral; it inflates costs, weakens negotiations, and erodes competitiveness.  The Investment Reality One misconception needs to be addressed: international carbon credits, offsets, or green certificates do not reduce CBAM liability. The mechanism only recognizes documented reductions at source or domestic carbon pricing formally accepted by the EU. That leaves exporters with two options: Decarbonisation at source: requiring significant capital investment. Absorbing the cost: which erodes already thin margins in price‑sensitive markets. Neither path is easy, but waiting is not an option.  The Expanding Scope  CBAM is not stopping at bulk industrial sectors. From January 2028, the EU plans to extend coverage to nearly 180 additional products, including: Fabricated metal products Auto components Machinery parts Plastics and polymers Chemicals For downstream manufacturers, this is not “someone else’s problem.” It is a ticking clock.  The Signal, Not the Endpoint  CBAM is more than a compliance mechanism. It is a signal that carbon intensity is now a trade variable. Key milestones ahead include: Q2 price publication: July 2026 First declaration deadline: September 2027 Scope expansion: January 2028 The companies that act today by building data infrastructure, verifying emissions, and modelling carbon costs will manage this transition on their own terms. Those that wait will be managed by it. Author - Anshit Dhawan ( Senior)

The latest edition of ESG Perspective (05.26) highlights how global sustainability regulations are rapidly moving from policy intent to operational execution. This edition covers key developments across climate policy, carbon markets, ESG reporting frameworks, sustainable finance, circular economy regulations, and water resource management. Key insights include: The EU’s alignment of CBAM pricing with the ETS mechanism, strengthening global carbon pricing transparency. India’s revised 2035 climate targets and the inclusion of SAF-blended aviation fuel under regulatory frameworks, reinforcing the country’s low-carbon transition. Growing standardization in ESG disclosures through GRI-CDP alignment and updates to ISO 14001 and SBTi methodologies. Increasing momentum in sustainable finance, including rising investments in the blue economy and innovative climate-linked financing models. New circular economy and water reuse initiatives aimed at improving long-term environmental resilience and operational sustainability. The edition also features Pierag Perspective by Sanchit Gupta on how Global Capability Centres (GCCs) are emerging as strategic enablers for scalable ESG execution through stronger governance, data management, reporting, and technology integration. Read the full ESG Perspective edition and download the complete report from the link below.

Once seen as a compliance exercise, sustainable finance most recently is now being recognized as a strategic lever that shapes cost of capital, funding access, and long-term competitiveness. Capital flows into sustainable development routes is an integral part of risk management and value creation. More and more decisions related to investments are being made on the basis of climate-related risks, regulation, and investors’ expectations across the world. For India, the stakes are high. As the world’s sixth-largest economy, with large-scale infrastructure and industrial development taking place, it needs to balance development with transition imperatives. As pointed out by CRISIL, the growth in the country’s GDP is expected to be around 6.5% in 2026, according to S&P Global. The need for achieving net-zero emissions in the country by 2070 and building additional capacity in renewable energy may lead to a need for as much as USD 2.5 trillion in climate finance by 2030. What Sustainable Finance Means Sustainable finance integrates Environmental, Social and Governance (ESG) factors into investment decisions, affecting performance, risk, and value. It includes financing that delivers “green” outcomes, renewable energy, pollution reduction, and transition finance for emissions-intensive yet essential sectors, focusing on measurable improvements over time. It distinguishes initiatives driven by impact intent from those grounded in financially material ESG factors, which affect risk-adjusted returns, cost of capital, and creditworthiness. In India, absent common taxonomies, particularly in coal, steel, and cement, create risks of inconsistent classification, pricing inefficiencies, and investor scepticism. Transparent, outcome-linked approaches are critical. Current State: Signals and Commitments According to the Green Investment Opportunities 2025 Report, total climate sector equity investment in 2024 was at USD 917 million in Sustainable Mobility (48%), Circular Economy (20%), Energy Transformation (19%), while climate-smart agriculture, water technology, and cooling sectors are upcoming Government action anchors confidence. Since 2023, India issued ₹477 billion (USD 5.8 billion) in sovereign green bonds, establishing a domestic green yield curve. SEBI’s independent review mandates from April 2025, RBI’s renewable energy priority sector classification, and ICMA-aligned frameworks have standardised practices. Private participation is rising. By early 2023, India’s green bond market crossed USD 21 billion, over 80% from private issuers, including Yes Bank, Axis Bank, NTPC, and municipal bodies. Sustainability-linked instruments are emerging. For instance, Mindspace Business Parks REIT raised ₹550 crore through sustainability-linked bonds backed by IFC. Programs like the National Solar Mission and FAME illustrate convergence of policy, concessional finance, and private capital; India’s solar capacity surpassed 70 GW by 2023. Energy and infrastructure-linked instruments dominate, while social finance and transition finance evolve gradually. Industrial and municipal deployments: ReNew Power projects, Delhi Metro carbon credit monetisation, Indore Municipal Corporation’s USD 87 million green bond- illustrate adoption beyond power. Scaling capital flows requires deepening transition finance and broadening inclusive instruments. Deployment in Practice Sustainable finance uses two models: use-of-proceeds instruments, earmarked for defined projects, and performance-linked instruments, tying terms to sustainability targets. Use-of-proceeds dominates, supported by SEBI’s ESG debt framework. Beyond green bonds, instruments include social and sustainability bonds, blue bonds, green REITs, climate bonds, and green private equity and venture capital. Banks and NBFCs extend loans for renewable energy and energy efficiency. Performance-linked instruments, such as Sustainability Linked Bonds (SLBs) and Sustainability Linked Loans (SLLs), link pricing or covenants to ESG performance, particularly in energy transition and infrastructure. Blended finance de-risks early-stage segments. The market is shifting toward outcome-focused structures, reflecting investor preference for measurable performance over labels. Drivers of Momentum Momentum stems from investor expectations, trade pressures, national commitments, and regulatory signals. As per reports, around 78% of Indian institutional investors allocate up to 30% of portfolios to entities with measurable ESG objectives, and nearly 40% face client or asset-manager pressure. Over two-thirds of exports are exposed to tightening net-zero regulations in the EU and UK; carbon border adjustments from 2026 may raise costs (Net Zero Tracker, University of Oxford). National commitments, including net-zero 2070 and renewable energy expansion, require USD 1.3 trillion in climate-aligned debt by 2030. SEBI’s BRSR mandates make performance measurable, while reputational considerations increasingly translate into financial risk, linking ESG to capital costs, market access, and competitiveness. Challenges and Way Forward While there is considerable movement toward sustainable finance in India, there are still a number of structural issues faced by sustainable finance, including concerns about credibility. About 68% question corporate ESG claims due to inconsistent reporting and limited verification. Early-stage and MSME firms often lack governance, data systems, and climate risk integration. Multiple global standards (GRI, SASB, TCFD) complicate comparability. Other barriers include absent national taxonomy, high issuance costs, long project gestation, and limited appetite for long-tenor green capital. Strict regulations, investor interest, and the development of ESG capabilities have slowly resulted in outcome-based and transition-oriented financing. Closing Perspective Sustainable finance in India is increasingly tied to competitiveness, resilience, and capital access. It represents a structural shift in financial decision-making. As capital conditions tighten and expectations become explicit, early and credible alignment will distinguish leaders from followers. For India’s growth trajectory, sustainable finance is no longer optional, it is essential. Author - Ashlesha Aggarwal (Executive)

Every year, April 22nd comes around the same way We see the pictures. The recycling infographics. The posts about caring for the planet. And then April 23rd arrives and most of it just goes away. According to reports, an estimated 62% of consumers said they are willing to change their purchasing habits to limit environmental impact, however, only 31% of people reported that their most recent purchase consisted primarily of sustainable or environmentally friendly items. But 2026 feels different. This year's theme is "Our Power, Our Planet." If one were to consider the circumstances, it would be very clear that in 2025, several hundred environmental regulations were repealed globally, including emissions standards and wetlands protection measures, each of which had taken over a decade to formulate. It was not a few isolated instances of policy changes; it was a systematic reversal of decades-old policies while the vast majority of businesses were preoccupied with other issues. It is not a matter of whether businesses have become aware of the problem. It is a matter of what actions will they take to address it. The Gap Has Never Been About Awareness Every leader we talk to knows climate change is real. Every CxOs we work with knows that disclosing how their company affects the environment is coming, whether they are ready or not. The market is not unaware. The problem is that awareness has not been turning into action. As per a new survey conducted by CRM solutions provider  Salesforce, in partnership with insights and advisory consultancy GlobeScan, while 90% of executives viewed sustainability as important to their organizations’ commercial success, including two-thirds who rate it as “very important,” only 37% consider sustainability to be very integrated into their businesses. The report noted the importance of high quality data for meeting new regulatory sustainability reporting requirements, with the survey finding that 59% of executives expect to have difficulty complying with the new EU Corporate Sustainability Reporting Directive (CSRD), and 31% expecting challenges with the reporting requirements from the IFRS’ International Sustainability Standards Board (ISSB). And under that problem is something just as bad, but harder to notice. For example, a truck that stays motionless and burns up fuel every day. The same goes for the expense of not being sustainable. It builds up quietly. The cost of borrowing goes up. Government scrutiny increases. Investors start losing confidence. The people inside the company start asking questions about what it actually stands for. These are not future worries. They are happening right now. They are just not always easy to spot on a report. Most companies still think of sustainability as something that belongs in an annual document. Not in the room where actual business decisions get made. That thinking is exactly what keeps companies stuck. And it is exactly why April 23rd tends to feel like the morning after a party nobody really planned.  Saying It and Doing It Are Not the Same Thing A net-zero commitment without a way to measure it is just words. A diversity goal without a structure behind it is something that gets said in a meeting and forgotten. The difference between companies that are genuinely making progress and those that are just talking about it comes down to whether sustainability is part of how they actually make decisions, not just how they communicate. Following frameworks like BRSR, GRI, CSRD, and IFRS S1/S2 is not about doing what regulators say. It is about being honest and transparent in a way that holds up. And, this is not niche anymore. For example- as per guidelines, India’s top 1,000 listed companies are now mandated to report under BRSR. Similarly, CSRD will expand ESG reporting requirements to ~50,000 companies in the EU. Companies that have built this properly do not just report differently. They operate differently. The way they buy, the way they use energy, the way they work with suppliers, all of it gets informed by a clearer understanding of what sustainability costs and what it is worth. That clarity, built up over time, is what separates companies that are actually performing from those that are just trying to keep up.  What This Actually Requires from All of Us The real change happens after Earth Day. It is about what people and businesses do not just what they say. People need to be careful about what they buy and try to use energy and stuff. They should think about whether the things they buy're good for the Earth. Companies need to ensure that they practice sustainability by setting measurable, achievable goals based on factual information. They must also consider how their actions will impact the earth and act accordingly to “do the right thing.” They also have to measure how well they are doing and be honest about it. Businesses must be open about what they're doing to help the Earth and sustainability of Earth is very important, for businesses and people. Awareness without measurable actions and accountable actions cannot produce results. "Our Power, Our Planet" Is Not an Invitation. It Is a Question. Climate urgency is intensifying, marked by rising global temperatures, record-breaking warm years, and an increasing frequency of climate-related disasters. It is asking companies what they are doing with the power they already have. The supply chains. The capital. The energy decisions made every single day without a sustainability lens. The people being developed, or not. Each one of those is an opportunity. Most of them are still being left alone. April 22nd is a reminder. But the work does not start or stop on that day. It lives in the decisions companies make every other day of the year. The answer and the work start now. Author - Anshit Dhawan (Senior)

ESG Perspective | 8-10 Min Read The April 2026 edition of the ESG Perspective tracks a global sustainability landscape that is moving from ambition to implementation. Regulators in India and the EU issued binding standards and pricing mechanisms rather than draft frameworks this month, and the bodies that set corporate climate methodology, SBTi and PCAF, released updates that raise the bar on what counts as a credible target. The throughline across almost every development this month is the same: sustainability commitments are being converted into measurable, enforceable, and market-priced obligations. India's Climate Policy and Carbon Markets Move From Design to Execution Green Ammonia and Green Methanol Standards On 27 February 2026, India's Ministry of New and Renewable Energy notified formal Green Ammonia and Green Methanol Standards under the National Green Hydrogen Mission. Green Ammonia must now show total non-biogenic greenhouse gas emissions of no more than 0.38 kg CO2 equivalent per kg of ammonia, averaged over the preceding 12 months. Green Methanol carries a threshold of 0.44 kg CO2 equivalent per kg of methanol. These standards give exporters, fertiliser producers, and shipping and heavy industry buyers a clear, auditable basis for classifying green hydrogen derivatives, which matters directly for companies targeting export markets where buyers increasingly require verified low-carbon inputs. The Indian Carbon Market Portal Goes Live In March 2026, the Union Power Minister launched the Indian Carbon Market Portal (indiancarbonmarket.gov.in) at the Prakriti 2026 conference in New Delhi, alongside confirmation that formal trading in carbon certificates would begin within four months. The portal will centrally manage registration, monitoring, reporting, and verification for the Carbon Credit Trading Scheme, which already covers nine notified methodologies and more than 40 registered entities working in biogas, hydrogen, and forestry. Emission intensity targets have also been notified for close to 490 obligated entities across seven energy-intensive sectors. For companies with EU-facing exports, this infrastructure matters beyond domestic compliance, since a functioning national carbon market gives Indian producers a documented basis for demonstrating carbon costs already paid, which is directly relevant to CBAM exposure. India's Updated NDC Raises the Bar for 2035 On 25 March 2026, India's Union Cabinet approved an updated Nationally Determined Contribution for 2031 to 2035. The revised targets raise non-fossil power capacity to 60 percent of installed capacity by 2035, up from the earlier 50 percent target that India had already met ahead of schedule, and increase the emissions intensity reduction target to 47 percent from 2005 levels. The NDC also expands India's carbon sink commitment to 3.5 to 4 billion tonnes of CO2 equivalent through forest and tree cover. India had already reached roughly 52 percent non-fossil installed capacity by early 2026, which explains why the government felt able to raise these targets rather than simply extend the previous ones. Global Climate Policy: CBAM Enters Its Definitive Phase The EU's Carbon Border Adjustment Mechanism moved from its transitional reporting phase into its definitive, price-bearing regime on 1 January 2026. On 7 April 2026, the European Commission published the first quarterly CBAM certificate price at EUR 75.36 per tonne of CO2 equivalent, calculated from average EU ETS allowance prices over the first quarter. This is no longer a compliance exercise on paper. For any exporter of iron, steel, aluminium, cement, fertilisers, hydrogen, or electricity into the EU, carbon cost is now a line item in the cost of goods sold, not a future risk. Importers bringing in more than 50 tonnes of CBAM-covered goods annually must now hold authorised declarant status, and full certificate purchase obligations begin in February 2027 for emissions embedded in 2026 imports. Alongside CBAM's definitive phase, global climate policy continued tightening across adjacent areas this month, including updated emissions norms for heavy-duty vehicles and stricter aviation and renewable fuel standards in several jurisdictions, reinforcing a broader shift toward enforceable, market-linked climate accountability rather than voluntary disclosure. Sustainability Reporting and Assurance Frameworks Continue to Mature Reporting infrastructure is catching up to reporting ambition. Updates from major index and standards bodies, including LSEG and GRI, alongside domestic reporting reforms in markets such as New Zealand, continued to push sustainability disclosure toward greater structure, comparability, and third-party assurance this month. The direction across these updates is consistent: regulators and standard setters want ESG disclosures that can be independently verified and compared across companies and jurisdictions, not self-reported narratives. ESG Methodologies: SBTi and PCAF Raise the Credibility Bar Two of the most consequential updates this quarter came from the bodies that define what a credible corporate climate target actually looks like. PCAF released version 3.0 of its Global GHG Accounting and Reporting Standard, adding new financed emissions methodologies covering use-of-proceeds structures, securitisations and structured products, sub-sovereign debt, and optional reporting of undrawn loan commitments, along with two new methodologies for treaty reinsurance and project insurance. More than 100 experts across PCAF's industry working groups contributed to the update. For banks, insurers, and asset owners, this closes several gaps that previously let large categories of financed emissions go unmeasured, which means portfolios that looked complete under the old standard may need to be recalculated. SBTi is finalising its Corporate Net-Zero Standard 2.0, expected to take effect between 2026 and 2028, built to reference the revised GHG Protocol methodology. Every company with a validated SBTi target will need to adopt the updated methodology at its next mandatory five-year target review. Combined with PCAF's expanded scope, financial institutions in particular should expect their baseline financed emissions figures to shift as previously excluded exposures come into scope. Energy Transition and Circular Economy: Implementation Detail Matters Now India's regulatory activity this quarter extended into the practical mechanics of the energy transition. Electricity rule amendments continued to refine how renewable energy is integrated, priced, and settled within the grid, while the Central Pollution Control Board issued detailed 2026 guidelines for the safe storage, handling, and transportation of waste solar photovoltaic modules, panels, and cells under the E-Waste (Management) Rules, 2022. The guidelines prohibit open dumping or landfilling of solar waste, require producers to establish take-back and collection mechanisms, mandate covered transport to prevent environmental exposure, and require registered facilities to maintain fire protection systems, monthly inspections, and detailed compliance records. With India ranked among the top five countries globally for projected PV waste volumes by 2050 according to IRENA, this move from draft guidance to enforceable rules is a meaningful sign that circular economy policy is catching up with the pace of India's solar rollout. What This Means for Businesses Taken together, April's developments point in one direction: ESG is shifting from a reporting exercise to a set of enforceable, price-bearing obligations that touch trade, financing, and capital costs directly. Companies exporting to the EU need a CBAM cost strategy, not just an emissions inventory. Financial institutions need to revisit financed emissions baselines against PCAF's expanded scope before their next SBTi review. Indian manufacturers in green hydrogen derivatives, solar, and energy-intensive sectors need to treat the new standards and carbon market infrastructure as immediate compliance requirements, not future planning items. Organisations that treat this quarter's developments as operational priorities, rather than disclosure updates, will be better positioned as enforcement catches up with regulation. Frequently Asked Questions What is the EU CBAM certificate price for 2026? The European Commission set the first quarterly CBAM certificate price at EUR 75.36 per tonne of CO2 equivalent for Q1 2026, based on average EU ETS allowance auction prices. Prices are published quarterly through 2026 and will shift to a weekly calculation from 2027. What are India's new Green Ammonia and Green Methanol standards? Notified by India's Ministry of New and Renewable Energy on 27 February 2026, the standards cap non-biogenic greenhouse gas emissions at 0.38 kg CO2 equivalent per kg of ammonia and 0.44 kg CO2 equivalent per kg of methanol, giving producers and exporters a verifiable basis for green classification. What does India's updated NDC commit to? India's NDC for 2031 to 2035, approved on 25 March 2026, raises the non-fossil power capacity target to 60 percent by 2035, increases the emissions intensity reduction target to 47 percent from 2005 levels, and expands the carbon sink target to 3.5 to 4 billion tonnes of CO2 equivalent. What changed in the PCAF financed emissions standard? PCAF's version 3.0 standard, released in December 2025, expands financed emissions methodologies to cover use-of-proceeds structures, securitisations, sub-sovereign debt, undrawn loan commitments, and new insurance-associated emissions categories. When does the SBTi Corporate Net-Zero Standard 2.0 take effect? SBTi's Corporate Net-Zero Standard 2.0 is expected to take effect between 2026 and 2028, with companies required to adopt it at their next scheduled five-year target review. What are India's new solar panel waste rules? The Central Pollution Control Board issued 2026 guidelines under the E-Waste (Management) Rules, 2022, requiring registered recycling facilities, covered transport, producer take-back programmes, and fire safety and inspection protocols for waste solar PV modules, panels, and cells. Read the Full Perspective This overview covers the headline developments from April 2026. The complete ESG Perspective includes deeper analysis of each policy shift and its practical implications for compliance, reporting, and capital planning. Navigating CBAM exposure, financed emissions reporting, or India's green hydrogen and carbon market compliance requirements? Pierag's ESG and Sustainability practice helps organisations turn regulatory shifts like these into workable compliance and reporting roadmaps. Talk to our team about your ESG readiness. Related reading: ESG Perspective, March 2026 Edition | The Invisible Cost of Sustainability: Why ESG Cost Accounting Matters | Digital Sustainability: How AI Is Transforming ESG Reporting

The Shift from Mitigation to Adaptation In the last decade, the main concern of corporate climate strategies has been the reduction of greenhouse emissions and the achievement of the target of net-zero emissions. Although the prevention of global warming is the key, the increasing effects of climate change have made climate adaptation an important concern. The severe weather changes, increase in temperature, water scarcity, and sea level rise are now being witnessed globally, which are negatively affecting supply chains, infrastructure, and commercial operations globally. Businesses are realizing that cutting carbon emission reduction is not enough. In spite of all the mitigation efforts, there are some unavoidable effects of climate change, and enterprises need to start preparing for the new risks. Climate adaptation is shifting from a niche sustainability issue to a critical part of an enterprise’s overall ESG strategy. This shift is illustrated by the financial investment required to address the issue of climate resilience. The Adaptation Gap Report 2024 by the United Nations Environment Programme indicated that developing countries will require between $215 billion and $387 billion annually starting from 2030 to address the issue of climate change. The financial impact of the issue is already apparent. In 2024, the financial losses due to natural disasters across the globe are estimated at $320 billion. Therefore, the financial impact of the issue is already apparent. In this case, adapting to the issue of climate change is no longer only a matter of environmental protection but is becoming a matter of strategic business, as companies must now consider the financial implications of climate-related disruptions on their operations and long-term viability. Understanding Physical Climate Risks for Businesses Physical climate risks, as the name suggests, refer to the direct impacts of climate change on assets, operations, and supply chains. These risks are generally categorized as acute and chronic. Extreme weather events, floods, hurricanes, wildfires, and heatwaves are examples of acute risks that can cause problems with operations. On the other hand, chronic risks involve longer-term climate shifts and may include changes in sea levels, droughts, and increased temperatures. With the rising cases of weather-related disasters, the importance of adaptation to these changes cannot be overemphasized. From 1985 to 2025, losses of around US $7.2 trillion are observed from natural disasters. This, therefore, highlights the rising risk to businesses as a result of these changes. These dangers are not exclusive to any certain industry. Manufacturing facilities situated in flood-prone regions may be compelled to cease operations, while agricultural endeavors may see diminished productivity as a result of climatic alterations. These alterations may be experienced across multiple sectors, including energy and retail. Financial institutions and investors are progressively evaluating physical climate concerns. Financial institutions, including lenders and insurance providers, are evaluating companies' vulnerability to climate-related risks. This has compelled businesses to incorporate risk analysis into their strategy planning. Why Climate Adaptation Is Becoming a Business Priority The importance of putting more emphasis on climate adaptation in corporate ESG agendas has been heightened by multiple factors, including the growing frequency and severity of climate-related disasters and ongoing real-world financial consequences for businesses such as supply chain disruptions, damage to physical infrastructure, and operational delays. There is also greater expectation from regulators and global frameworks regarding the disclosure of climate risk. The Task Force on Climate-related Financial Disclosures suggests that companies should identify both transitional and physical risks and disclose how their strategies will remain resilient to the risks they may face based on the different climate scenarios. There is increasing demand for more transparency from investors about how businesses will manage long-term climate risk. Climate resilience is being viewed by institutional investors as an important indicator of a company’s financial stability. Companies unprepared for the effects of climate may experience more expensive insurance coverage, decreased asset valuation, and/or limited access to funding sources. The case for the economics of adaptation is beginning to come into view as well. As a 2024 analysis by the Boston Consulting Group revealed, there was more than $1 trillion of worldwide climate damage between 2020 and 2024, and so the financial impact of extreme weather events is rising. As a result, climate adaptation is being seen as the new frontier for ESG leadership. Climate-Resilient Business Strategies To address physical climate risks, proactive approaches to adapting to the situation have to be developed. Organizations have to conduct exhaustive assessments of the risks that might be caused by the climatic conditions. In this case, the impact that the climatic conditions might have on the business is analyzed. This is where the use of scenario analysis is important. Another key aspect that has to be addressed is the issue of infrastructure. In this case, the business might have to invest in the construction of facilities that are able to protect the business from the effects of extreme climatic conditions. In this case, the business might have to invest in the construction of facilities that protect the business from floods. In addition, the business might have to invest in the installation of technologies that help to conserve water. In this case, the business might have to invest in the installation of air conditioning units. However, corporate preparedness remains low despite acknowledging the risks that may be caused by climatic conditions. Research done on more than 1,000 publicly listed firms revealed that only 23% of these firms have put in place mechanisms to address this problem. Therefore, investments in infrastructure that is resistant to climate change, sustainable water management, and natural solutions can help to mitigate risks to operation in the long term as well as environmental objectives. This may require collaboration with other actors because risks are often beyond an organization. Governance and ESG Integration Effective climate adaptation practices require robust climate adaptation governance practices and oversight by the board of directors. Climate risk management is an essential part of enterprise risk management practices, ensuring that adaptation practices are consistent with overall corporate governance practices. The board plays an essential part in overseeing the assessment of climate risks, developing resilience goals, and monitoring progress. The transparent communication of risks and adaptation techniques is becoming increasingly expected by various stakeholders and regulatory bodies in firms. The importance of ESG reporting frameworks in prioritizing resilience in overall sustainability reporting is becoming prominent. The transparent communication of adaptation techniques by firms is likely to increase investor trust and readiness for the long-term effects of climate change. Next Step: Climate Resilience in Corporate Strategy As much as the climate risks are rising, adaptation is turning out to be a key component of the sustainability strategy for many firms. Companies that focus only on cutting down emissions and ignore the physical climate dangers may face a shock that threatens their sustainability. According to the World Meteorological Organization, the period between 2015 and 2024 has been the warmest decade on record. This implies that extreme weather occurrences and climate upsets might worsen in the coming future. As a way of countering the effects of climate change, many organizations are going a step further than their net-zero targets and attempting to make their operations more climate-resilient. Companies can better prepare for environmental shocks and keep their operations going by including climate adaptation in their governance structures, risk management frameworks, and investment decisions. In this context, it can be said that the question is no longer whether businesses should prepare for climate impacts but how effectively they can adapt. Companies that treat climate resilience as a strategic priority will be better positioned to navigate climate uncertainty while creating sustainable long-term value. Author - Ayushika Saraswat (Consultant)

ESG Perspective – March 2026 Edition presents a curated overview of key global developments shaping the evolving ESG and sustainability landscape. The edition highlights important regulatory updates, emerging global standards, and market trends across areas such as carbon markets, sustainability reporting and disclosure frameworks, climate policy, circular economy regulations, and sustainable finance. As governments, regulators, and investors continue to strengthen expectations around transparency, accountability, and climate action, businesses are increasingly required to navigate a complex and rapidly evolving ESG environment. This edition distills significant policy announcements, regulatory reforms, and standard-setting initiatives from across jurisdictions into clear, decision-relevant insights. By bringing together these developments in one place, the report aims to help organizations stay informed, anticipate regulatory shifts, and better prepare for the transition toward more sustainable and responsible business practices. Read the full edition for a deeper look at the latest global ESG developments and regulatory insights.

Environmental, Social, and Governance (ESG) factors are now an essential part of business strategy and risk management. What was previously seen as secondary or optional practice has become fully incorporated because of regulatory requirements and stakeholder expectations. The role of ESG has shifted from merely being a necessary activity to being a systematic approach that assesses non-financial factors that affect business resilience and long-term value. There has been a significant evolution in the practice of ESG. Essentially, ESG represents an ability to measure, manage, and disclose the organization’s social and environmental outcomes and govern appropriately. In turn, by moving beyond financial performance and moving instead along an ESG path, long-term risk and value protection can be ensured. Having a proper strategy with identified roadmap within ESG coverage can thus be important for ensuring actions and outcomes based upon broader corporate promises. What Is an ESG Strategy and How Is It Implemented? ESG strategy can thus be defined as an organized way of aligning ESG factors and business strategies. In most cases, an ESG strategy maps the way in which ESG commitments can be converted into tangible and actionable solutions. A good ESG strategy involves defining the role of ESG in an organization, outlining the objectives, explaining how the objectives can be achieved, and setting the timeframe. An ESG strategy is different from an action plan, as the former takes various implementation methods into consideration before deciding on the best method to adopt. To ensure effective implementation, there is alignment of stakeholders and prioritization of issues. There is engagement of internal stakeholders, which includes the board, executives, and employees. There is also engagement of external stakeholders, which include investors, the regulators, supply chains, as well as communities. This is critical in coming up with ESG issues that are material to the organization, considering the specific industry, operations, as well as geography. Then there is alignment of goals using benchmarks, which are short, medium, and long-term. Implementation is contingent upon data, governance, and communications. To this end, a strategy needs to be integrated with the right reporting framework, whether it is GRI, SASB, BRSR, or CSRD, and a framework designed for the accurate collection of ESG data needs to be developed. A process for review also identifies areas where there is room for improvement, and ESG reporting with the requisite assurance from within or from an outside party enhances credibility. Developing an ESG Roadmap A roadmap for ESG issues offers a long-term multi-year framework that relates its goals regarding sustainability with business strategy. Materiality Assessment  The process for the formulation of the roadmap includes carrying out a materiality analysis to determine ESG issues, from the perspective of the organization and its stakeholders, that have the most value. This is done by determining the governance, social, and environmental risks and opportunities that have the potential of impacting the business. Topics that are highly material in both dimensions define the strategic focus of the ESG roadmap, which aims to allocate effort to those areas with the greatest possible impact. Goal Setting and Alignment Once a company has identified their material topics, they then create their ESG goals based on those priorities. Good ESG goals incorporate the SMART principle: specific, measurable, achievable, relevant and time bound. The ESG goals of organizations are often aligned with recognized global standards such as the UN Sustainable Development Goals, science-based climate change targets, and/or sectoral benchmarks. Key Performance Indicators and Action Planning The Key Performance Indicators (KPIs) provide the ESG goals with tangible metrics for measurement, review and report (to stakeholders) purposes. Examples of common ESG KPIs include GHG emissions total and intensity, energy consumption from renewable sources, employee diversity and turnover ratios, health and safety incidence rates, as well as various governance-related metrics including board independence. To implement their ESG targets, companies must create action plans that define their initiatives/activities, assign responsibility or ownership, establish timelines, create and allocate budgets, identify benchmark/performance review points, etc. Reporting, Review, and Continuous Improvement Transparency in reporting is an essential element in the proper governance of ESG. This is because the performance of an organization in ESG is usually reported in a sustainability report, and the frameworks that the reports follow include the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). Having the relevant ESG measures verified from the outside adds even further to the confidence level. This is because there is the possibility of the filing of misleading reports. Periodic reviews and changes in the way ESG measures are implemented need to keep up with the latest developments. This is especially the case when it is a matter of new regulations. Governance, Resources, and Collaboration Well-structured governance and strong leadership engagement are a critical success factor for the execution of ESG. This is achieved through the effective delegation of ESG management to the board, the establishment of sustainability committees, the alignment of compensation to the performance on ESG, and training. To properly implement, there is also a need to properly invest in resources, which can also include capital outlay for efficiency or renewable energy, ESG data management, specific knowledge, as well as employee training. Involvement of other stakeholders, such as suppliers, other companies, or other organizations, can also improve ESG performance. To Summarize : ESG has transformed from a mere compliance-oriented activity into a strategic approach that defines business resilience and value generation. ESG strategy and roadmap help in achieving measurable action on commitments and become effective in dealing with risks and responding to stakeholder demands. ESG integration can become a pragmatic approach in maintaining business performance and gaining business trust through effective governance of data. Author - Ayush Anand

ESG Perspective is Pierag’s ESG & Sustainability Newsletter, created to foster informed, forward-looking conversations on sustainability and responsible business. As the global ESG landscape continues to evolve - driven by regulatory reform, climate priorities, market mechanisms, and rising stakeholder expectations, the newsletter serves as a concise and practical knowledge resource for organizations navigating this change. The second edition builds on this foundation by focusing on the continued evolution of ESG and sustainability reporting frameworks, including emerging regulatory expectations and disclosure reforms in India and globally. It examines developments in carbon markets and climate transition mechanisms, alongside policy signals influencing decarbonization pathways across sectors. The edition also highlights regulatory and policy actions related to environmental protection, including biodiversity and pollution control, and considers governance reforms that are reshaping oversight, accountability, and risk management expectations for organizations.

In January 2025, UN Secretary General António Guterres stated “The world now invests almost twice as much in clean energy as it does in fossil fuels”. For the first time, global energy investment will cross USD 3 trillion, with USD 2 trillion directed towards clean technologies alone. The expenses on renewable energy sources have surpassed the aggregate expenses on coal, oil, and gas. According to a report from BloombergNEF, the amount of new investment in renewable energy for the first six months of 2025 reached a record of USD 386 billion. These figures signal not just momentum, but a global race, one where social reality must remain central. The question is no longer whether the world will transition, but whether it will transition justly. Introduction A "just transition" is the process of shifting from an extractive, carbon-intensive economy to a low-carbon, regenerative one through social consciousness, equity, and participation. Born in the labor movements of North America in the 1970s, it has since evolved into a complete framework that tackles the uneven impacts of climate change and the policies intended to lessen it. Workers and communities connected with such sectors experience unpredictability and disruption because of nations shutting down fossil fuel sectors to adopt renewable energy resources. To fill such gaps, the Paris Agreement has now incorporated the concept of a just transition. It pushes nations to devise a support system, including citizens and evaluating socio economic risks. The idea is currently at the center of international decarbonization initiatives. It addresses structural injustices, including the vulnerabilities of low-income populations, historical emissions imbalances between nations, and global divide in renewable energy access. The International Labor Organization defines a just transition as: “Greening the economy in a manner that is as fair and inclusive as possible, creating decent work and leaving no one behind.” This is the goal for which governments, enterprises, and civil society must work together. The Business Case for Renewable Fuels Sound economic rationale is driving the shift to renewable fuels. Transportation regulations, aviation regulations, and heavy industry regulations are pushing the growth of the biofuels market, which is expected to cross USD 200 billion by 2030. With the increase in the adoption of Electric Mobility, Green Hydrogen is set to increase dramatically by 2030. Companies like Shell, BP, and Indian Oil Corporation are allocating massive budgets to green hydrogen hubs, advanced biofuels, and renewable blending infrastructure. Additionally, low carbon fuel production facilities hold unquantifiable value in terms of carbon credits, paving ways for new finances to be generated through Voluntary and Mandated Markets. Renewable energy forms have come to be identified not only by their significance to the environment, but also by their cost-effective and future-proof nature. Obstacles on the Way The following structural barriers continue to stand in the way of a just and inclusive transformation, regardless of the movement's acceleration: Potential Employment Disruption: By 2030, there will be 5.6 million workers in the worldwide coal industry, down from 7.8 million in 2022. Regulatory and Policy barrier: Inadequate coordination, a delayed clearance process, and a disturbed decision-making process all restrict the expansion of renewable energy sources. Lack of Data: Policies are not closely targeted since many nations lack specific data on vulnerability to workers, informal sectors, and climate-related risks. Deepening social inequality: Marginalized groups lack the training and resources which could exacerbate the existing inequalities. Labor market mismatch: Jobs may not be spatially aligned with areas losing employment due to fossil fuels, even if clean energy might provide 24 million additional jobs by 2030. Pillars of a Just Transition  According to the United Nations Economic Commission for Europe (UNECE), nations should adhere to the following six guidelines for a just transition: Social Progress: Improving lives by happiness, greater equality, and access to necessities. Workers' Protection and Empowerment: Providing a secure working environment, social security, and opportunities for reskilling and upskilling. Environmental Consciousness & Responsibility: Lowering emissions while conserving and restoring key natural habitats. Economic Success: Promoting low carbon sectors and innovative activities. Participatory Governance: Engaging communities and civil society organisations to ensure accountability and transparency. Institutional Support: Enhancing financial tools, governance frameworks, and policies. Why the Transition Must Be Just With an increasing trend towards renewables and low-carbon transitions, it is important for the transition to incorporate not only emissions but essentially people, communities, and governance frameworks that get affected by it. There are 666 million people who do not have electricity access yet, and even energy access might deteriorate if transitions take place without equity considerations. The renewable energy sources by 2050 will provide almost 52% of World’s final energy demands; this shows an unprecedented transformation on such massive scales. However, initial levels vary widely. India’s per capita energy use is now one-third of the global average, which is many times lower than what is practiced in developed nations. A technological or market forced transition might end up worsening imbalances, especially where there is little power and job distribution. Equity and justice are therefore achieved when decarbonization is linked with different sectors such as social protection and governance. Conclusion  The coming decade will decide whether the global transition will be a story of shared progress or a story of unequal growth. A just transition offers a vision of shared progress whereby renewable fuels offer more than just a low-carbon future but a future of more jobs, stable institutions, and a better quality of life. To achieve this vision, countries should dedicate equal attention to funding, technology support, and capacity building in countries, as well as investments by sectors in community and skills development. Thus, a planned and collective approach can help transform a transition towards a renewable future as a tool of inclusive growth: as urgent as it is necessary. Author - Aman Vashisth (Executive)

The rapid evolution of Environmental, Social, and Governance (ESG) reporting from a mere "checkbox" exercise to a vital component of any Company's operations has been a major factor in how businesses have changed their perspective and interaction with their stakeholders. ESG reporting is now viewed as a key element of a business's standing and acts as the basis of its long- term value creation and stability. This transformation puts Indian businesses in a strong position to rally the others by setting the standard for accountability, transparency, and purpose through ESG reporting. With the implementation of Business Responsibility and Sustainability Reporting (BRSR) by Securities and Exchange Board of India (SEBI) regulations, ESG reporting is now mandatory for the top 1,000 Indian companies that are listed. But when it comes to the competitive advantage for ESG reporting that results in superior business performance, it is not just about checking regulatory boxes,  it is about how that can be used for corporate governance, as well as for aligning business strategies with sustainability efforts. The companies that integrate ESG factors effectively can benefit from reduced capital costs, building consumer confidence, enhanced business performance, and superior employee attraction and retention skills, which improve their long-term survival chances. Why ESG Reporting Has Become Business-Critical Business Imperative Financial reporting, while still necessary, does not offer a full view of an organization's performance. A lot of the current business environment is determined by issues such as the scrutiny of supply chains, expectations of society, risks related to climate, and problems concerning governance. ESG reporting, therefore, is the instrument that closes the gap by providing data on a Company's environmental impact, social relations, and ethical behavior. Good ESG practices are often linked to better performance over the longer term. Investors are using sustainability metrics more and more often within their decision-making processes. Companies with credible ESG disclosures have a greater likelihood of being able to attract long-term, socially responsible capital. Supporting Risk Management and Operational Resilience  ESG reporting plays a key role in the risk identification and mitigation process. Transparent and consistent disclosures enable companies to spot potential risks well ahead of the time when these risks become a significant challenge. Companies which are vigilant about ESG metrics tend to be in a stronger position. The recent geopolitical events have served as a proof point that corporations with a robust ESG framework are the ones exhibiting resilience, swift adaptation, and maintaining the trust of their stakeholders during crises. Moreover, ESG reporting drives real operational upgrades. By zeroing in on energy use, resource efficiency, health and safety standards, and community ties, companies often uncover big wins like cost savings, smoother processes, and fresh paths to sustainable innovation. Building Stronger Stakeholder Relationships Effective ESG reporting can supercharge stakeholder relationships by building customer trust, boosting brand strength, and sparking higher employee engagement especially among younger workers. Regulators and society see it as a clear sign of solid governance. Since India has committed to attain net zero emissions by 2070, it becomes even more important for Indian companies to make a shift towards tough sustainability targets. The bigger and higher performing companies are actively embedding ESG information within their business strategies, and adopting the globally recognized standards like GRI, TCFD and ISSB. The Future of Indian Businesses ESG reporting is full of value for Indian companies but to really tap that value they have to go beyond a fragmented or compliance driven approach. This means: The development of a corporate strategy incorporating ESG factors within a decision-making process. The use of adequate data management systems promote accuracy and consistency. Relying on independent assurance to enhance trust and credibility. Transparency regarding the progress and challenges being faced, and simultaneously, staying away from greenwashing. Carrying out continuous communications with all stakeholders and harmonizing ESG reporting with the highest international best practices. Conclusion The key areas that would impact business competitiveness increasingly in the coming years would be resilience, transparency, and trust. ESG disclosure has now become a factor that gives a company a competitive advantage, rather than a mere compliance factor. Apart from merely being visible in the current market, Indian companies that pledge to authentic, trustworthy, and deeply integrated ESG disclosures are more likely to survive in the long run. The real question of the moment is not whether we should invest in ESG reporting, but how effectively businesses can weave it into their daily operations and growth. Author - Surbhi Gulati (Associate Director)

ESG Perspective is Pierag’s ESG & Sustainability Newsletter, created to foster informed, forward-looking conversations on sustainability. As the global ESG landscape continues to evolve rapidly, shaped by regulatory reforms, climate priorities, market mechanisms, and rising stakeholder expectations, the newsletter serves as a concise and practical knowledge resource for organizations navigating this change. Each edition curates relevant global and Indian ESG developments across environmental, social, and governance dimensions, translating complex regulatory and policy shifts into clear insights. Through a focus on emerging trends, reporting reforms, climate initiatives, and sector-specific developments, ESG Perspective aims to support informed decision-making and help stakeholders understand the practical implications of ESG in today’s business environment.

The cost which is not being tracked "The financial statements haven’t caught up with reality yet" ESG is often misjudged by most of the companies as a compliance obligation, but it is much more than reporting. There has been growing concern over the increasing costs that come with changes that ESG demands in an organisation. Yet, beneath the day-to-day operations lies an overlooked truth- the cost of not being sustainable is often far greater than the cost of becoming sustainable. In many logistics fleets, for instance, idle engine time quietly burns through fuel budgets every single day. But it appears like routine spending rather than a clear sign of avoidable loss. Hidden Inefficiencies and Margin Erosion Across industries, hidden inefficiencies accumulate silently in the form of energy inefficiency, poor supply chain traceability, unmanaged risks, rising compliance costs, and fragmented processes that rarely appear on financial statements yet but unmistakably erode margins, operational disruptions, higher cost of capital, and eroding competitiveness. These costs often remain invisible because they are scattered across facilities and departments. Traditional accounting systems fail to attribute them to sustainability-driven inefficiencies. They hide in operational noise, until they hit margins. Companies assume ESG increases expenditure because they only see the upfront effort. What they miss is that avoiding ESG leaves everyday losses untracked, and those often add up to more. This is exactly where ESG accounting can play a pivotal role. ESG Cost Accounting: Turning Sustainability into Financial Intelligence ESG cost accounting integrates sustainability metrics with financial accounting. It transforms sustainability from a narrative into a quantitative, data-driven business case and provides answers to issues that traditional finance systems are unable to. It helps you see where money's slipping away, spot what's not working efficiently, and connect your sustainability efforts directly to your bottom line. You unlock real profitability in practical ways: cutting energy costs, making smarter purchasing decisions, spending less on compliance, reducing the capital you need to set aside for risks, getting better financing terms, and making day-to-day operational calls with confidence Companies that measure their ESG impact tend to  see better profit margins,  recover faster when things go sideways and become more valuable over time.  Financial clarity turns sustainability from an obligation into a Return on Investment (ROI) - driven strategy. For instance, for many industrial companies, energy accounts for over 15% of operating costs. Even modest efficiency gains can lift annual profits by 2-10%, while a 20% reduction in energy spend can deliver the same bottom-line impact as a 5% increase in sales. From Cost Centre to Competitive Advantage ESG should be viewed as a value centre rather than a cost centre. Companies that implement ESG cost accounting don’t just mitigate risks, they outperform competitors. When sustainability is measured like a financial discipline, it begins to pay for itself. Not only that, but evidence from various studies also suggests that companies with more transparent ESG reporting tend to access third-party financial resources at more favourable conditions. A recent academic study found that companies with smart supply-chain management show improved ESG performance, which tends to correlate with better operational transparency and efficiency.  This reinforces that ESG is not a narrative exercise - it improves commercial fundamentals. Looking ahead In essence, companies that will outperform in the next decade are those that understand their true cost structure and can quantify the financial implications of every operational decision. ESG should not be confined to compliance. It is a pathway to cost clarity, operational discipline, and long-term strategic advantage. Author -  Ashlesha Aggarwal (Executive)

Environmental, Social, and Governance (ESG) has evolved from just a compliance checkbox to a real strategic requirement that defines investment decisions and impacts long term operational frameworks. Fundamentally, risk assessment is what differentiates organizations at its core- ones who simply report ESG metrics and those who understand the importance of weaving sustainability in their business decisions and operations. The Evolving ESG Risk Landscape The risk management frameworks being followed traditionally need an upgrade looking at the evolving ESG landscape today. Imagine a manufacturing facility in Gujarat with very well written safety protocols but in the real environment- they turn blind to supply chain risks, child labor being involved in raw material procurement or water stress affecting key suppliers. This disconnected landscape may lead to an actual need for improved ESG risk assessment analysis. Modern risk goes way beyond the conventional corporate risk parameters. Coastal infrastructure and agricultural supply chains are often impacted by climate related physical threats. Social risks can arise unexpectedly, maybe through reputational damage pertaining to poor diversity policies or operational disruptions because of opposition from local communities. Governance failures can lead to destruction of years of trust and legacy almost instantly.  Limitations of Conventional Risk Models Most organizations still reply on financial risk models that are not equipped to handle ESG factors. How does one measure biodiversity loss or social license to operate financially? The complexity multiplies when considering ESG risks’ interconnected nature. A governance lapse might cascade into environmental violations, triggering social unrest and eventually financial penalties scenarios rarely captured in traditional risk matrices. The temporal challenge compounds these difficulties. ESG risks typically unfold over longer horizons than quarterly reporting cycles. Current groundwater extraction might cause severe water scarcity within a decade, but this doesn't appear in immediate financial statements. Effective forward-looking risk assessment demands scenario analysis and stress testing that remain uncommon in many organizations. Developing an Effective Framework Building robust ESG risk assessment starts with materiality assessment identifying which ESG factors genuinely impact your business. A textile manufacturer faces entirely different risks than a software services company. The former must address water usage, chemical discharge, and manufacturing labor conditions. The latter needs to prioritize data privacy, data center energy consumption, and employee well-being in demanding work environments. After identifying material issues, appropriate quantification becomes vital. This doesn't require forcing everything into a single metric but developing suitable indicators across different risk categories carbon footprints, water stress indices, diversity ratios, board independence metrics. The crucial element is ensuring active monitoring and action, not merely data collection. Stakeholder engagement stands out as particularly important. Financial risks can still be assessed internally but ESG risks demand an external pair of eyes from a two-sided perspective. Regular conversations with stakeholders like NGOs, communities, customers and employees often discover blind spots that are missed by internal audits. There have been instances where organisations discover unexpected impacts on local communities or any stakeholders simply because they never asked the right questions or evaluated these metrics.  Internal Audit's Expanding Mandate Internal audit teams have become critical contributors to ESG risk assessment, though many are still adapting to this expanded role. Their traditional expertise in independent verification and controls testing proves invaluable when applied to ESG metrics. While sustainability teams develop strategies and operations implement them, internal audit ensures reported information is accurate and actions align with commitments. The challenge lies in internal auditors' traditional training in financial and operational auditing rather than environmental science or social impact. Forward-thinking organizations address this through cross-functional teams pairing auditors with sustainability experts or recruiting professionals with environmental and social science backgrounds into audit functions. Internal audit's contribution extends beyond verification. They are uniquely positioned to analyse whether ESG risks are properly considered, controls are properly laid out, and whether the governance structures function effectively. When gaps are identified in internal audits between the ESG disclosures, actual operations and practices even before any external stakeholder notices the same, it shields organisations from regulatory risks and reputational damage.  Strategic Integration and Future Directions ESG risk assessment cannot operate as a sustainability team silo. It requires integration with enterprise risk management, influencing strategic planning, capital allocation, and performance management. When procurement teams grasp reputational risks in supplier relationships and project managers incorporate climate adaptation costs, ESG becomes operational reality rather than annual report rhetoric. India's regulatory environment, particularly SEBI's BRSR requirements, is accelerating this integration for listed companies. However, disclosure without genuine risk assessment becomes merely a compliance burden. Companies viewing this as an opportunity to strengthen risk management gain competitive advantages. Technology has made its way to making ESG risk assessment effective and efficient. Satellite imagery helps monitor deforestation in supply chains; digital tools can also come in handy to flag potential risks and violations by analyzing multiple data sources. These technological aids often fasten the process of risk identification. In the meantime, experienced professionals must still interpret findings and make strategic decisions. The final objective is not eliminating ESG risks that is not necessary or feasible, it is all about understanding and decoding them in a manner that making informed decisions becomes a part of the organization’s DNA and asking questions like which risks are to be mitigated, accepted or potentially converted into an opportunity becomes a part of the process. Organisations who will master this workflow will not only avoid pitfalls but will also position themselves for sustainable growth in the longer term. Author - Surbhi Gulati (Associate Director)

Today, sustainability has moved far beyond the realm of corporate goodwill. It has now become a core driver of financial and strategic decision-making on a global scale. Industry estimates suggest that the value of ESG-linked assets could approach US $40 trillion by 2030, which is a clear sign that capital is increasingly flowing towards more responsible and transparent business models. At the same time, regulations are becoming more stringent. One of the most extensive reporting systems to date, the Corporate Sustainability Reporting Directive (CSRD) requires thousands of businesses in Europe alone to provide thorough sustainability disclosures. With expectations rising from regulators, investors, customers, and rating agencies, organizations can no longer treat ESG as an annual communication exercise. They need the operational capability to measure, validate, and continuously improve sustainability performance. The Shortcomings of Traditional ESG Reporting Models Historically, ESG reporting was primarily reliant on manual data collection across departments, spreadsheets, supplier questionnaires, and fragmented documentation. These workflows were often labor intensive and prone to inconsistencies, particularly for businesses operating across multiple regions or supply-chain networks. As the volume of ESG data increased, manual systems reached their saturation. In a recent investor study, 85% of institutional investors believe greenwashing and other misleading sustainability claims have become a more serious concern compared to five years ago. The challenge is not intent, but capability; manual processes make accuracy difficult to guarantee. Time constraints exacerbate the dilemma. For many firms, ESG reporting cycles take six to nine months, leaving little space for analysis or strategic planning. As a result, sustainability reporting becomes retrospective, focusing on documenting the past rather than informing future decisions. AI and Digital Infrastructure: Redefining ESG Reporting Artificial intelligence has emerged as a structural solution to these operational burdens. Instead of gathering sustainability metrics manually at set times, AI-driven platforms connect directly with ERP systems, financial systems, facility monitoring tools, HR platforms, and supplier databases. This guarantees that ESG data is collected consistently and centrally, rather than assembled in response at year-end. The efficiency gains are substantial. Organizations which adopted automated ESG systems report 30–40% faster reporting cycles. Moreover 84% of enterprises that automated their ESG data collection reported increased data accuracy and quicker reporting cycles. Hence by minimizing spreadsheet reliance and standardizing data classification, AI significantly improves reporting accuracy and reduces the risk of discrepancies. Machine-learning models analyze anomalies, flag missing information, and trace the source of every modification through tamper-proof audit trails; capabilities critical for both investor confidence and regulatory compliance. Another advantage lies in automated framework mapping. Whether reporting under CSRD, ISSB, GRI, SASB, or a combination of standards, AI systems align internal metrics with disclosure requirements and adjust automatically when frameworks evolve. This eliminates one of the biggest administrative barriers companies have historically faced and ensures disclosures remain consistently audit-ready. From Compliance to Strategic Intelligence: Turning ESG Data into a Performance Engine The most transformative impact of AI is not efficiency; it is strategic visibility. Real-time emissions dashboards, supply-chain risk models, and predictive sustainability analytics transform ESG from fixed reporting to dynamic business intelligence. Modern digital platforms can analyze thousands of operational and external data points at the same time, allowing leaders to forecast the sustainability impact of business decisions before implementation. For example, digital twin simulations can improve capital and operational efficiency in the public sector by 20–30 percent by allowing smarter investment decisions and optimized project planning. In addition, supply-chain analytics guided by numerous third-party data sources, help organizations evaluate ESG vulnerability in procurement; particularly important as up to 90% of total emissions (Scope 3) come from the supply chain in many industries. So instead of responding to sustainability risks following an audit or news article, companies can now proactively recognize and tackle them. Financial outcomes underscore the strategic importance of this shift. Organizations that exhibit high quality in ESG reporting typically face lower capital costs and tend to show stronger long-term value resilience. At the same time, significant ESG controversies quickly weaken investor confidence and can cause substantial declines in stock value. It shows that delayed or inaccurate reporting is no longer just a compliance issue rather it carries tangible financial consequences. The Role of Human Judgment in a Data-Led ESG Landscape Despite the clear advantages of automation, AI does not replace the role of sustainability leaders. Social and governance dimensions frequently require interpretation beyond numerical indicators. Ethical concerns, labor practices, human rights impacts, and cultural context cannot be reduced to algorithms alone. The most successful ESG frameworks therefore adopt a hybrid model wherein AI is for precision and scalability, and human expertise for interpretation, decision making, and accountability. Conclusion: ESG Reporting Can Now Be an Engine for Growth Digital sustainability has redefined the purpose of ESG reporting. The tasks that once demanded significant manual effort can now function around the clock and with intelligence, offering leaders real-time visibility into environmental impact, regulatory exposure, and opportunities for value-creation. Companies adopting AI-driven ESG systems are improving compliance performance, boosting investor confidence, reducing operational costs, and building competitive advantage in markets where transparency is increasingly linked to capital access and brand equity. With the rapid global rise of ESG expectations, organizations shifting from manual reporting to digital, predictive sustainability will be optimally positioned to take the lead. The issue is no longer if companies should modernize ESG reporting; instead, it’s a matter of how swiftly they can develop the necessary infrastructure to thrive in a sustainability-driven economy. Author - Ayushika Saraswat (Consultant)

Imagine a future where the most valuable currency isn’t gold, dollars, or even Bitcoin—but carbon credits. In a world racing against time to curb climate change, these tradable certificates, each representing the removal or reduction of one metric ton of CO₂, are emerging as the “climate coin” that could redefine global wealth and economic power. The Birth of a Climate Currency Carbon credits were born out of necessity. The Kyoto Protocol in 1997 introduced the concept, allowing developed nations to fund emission-reduction projects in developing countries. This laid the foundation for a global carbon market, a space where environmental responsibility meets economic opportunity. Fast forward to the Paris Agreement in 2015, and the game changed: every nation now sets its own climate targets, and Article 6 created a framework for cross-border carbon trading, making carbon credits a universal language of climate action. Why Carbon Credits Matter Today The urgency is undeniable. The Intergovernmental Panel on Climate Change warns that limiting global warming to 1.5°C requires deep emission cuts. Yet, industries cannot eliminate all emissions overnight. Enter carbon credits—a bridge between ambition and reality. Tech giants like Amazon pledge carbon neutrality by 2040, banking on credits to offset unavoidable emissions. For businesses, these credits are more than compliance tools—they’re strategic assets signaling climate leadership. Global standards are tightening. The EU Emissions Trading System (EU ETS), launched in 2005 as the world’s first major carbon market, now pairs with the Carbon Border Adjustment Mechanism (CBAM), moving to full implementation in 2026, ensuring imported carbon-intensive goods carry a price comparable to the EU’s. In India, the Carbon Credit Trading Scheme (CCTS) and the Indian Carbon Market (ICM), were notified in 2023, laying the groundwork for a structured national carbon credit market. As emission intensity targets are rolled out in 2025, this scheme positions Indian industry to compete in a world where carbon cost will increasingly determine market access. Leading Indian companies, including Mahindra & Mahindra, Tata Steel, Infosys, Hindustan Zinc, and Reliance Industries, are already active participants in carbon markets, signalling how corporate India is integrating carbon credits into business strategy and long-term decarbonisation plans. The Market Behind the Movement Unlike traditional currencies, carbon credits don’t have a fixed global price. Their value depends on project type, certification, and market dynamics. Credits from reforestation or renewable energy projects often fetch premium prices because they deliver biodiversity and community benefits. Verified standards like VCS and Gold Standard ensure integrity, making these credits highly sought after. Today, the carbon market is no longer a niche policy tool—it’s one of the fastest-growing economic systems. In 2025, the global carbon credit sector is estimated to be worth USD 838–933 billion, and projections suggest it could surge to USD 10–17 trillion by 2034, driven by corporate net-zero pledges and rising demand for high-integrity offsets. Compliance carbon trading systems now operate across multiple jurisdictions, covering up to 28% of global emissions and generating more than USD 100 billion in public revenues by late 2024. Momentum is accelerating: companies retired a record 95 million credits in the first half of 2025. Looking ahead, supply could expand 20–35 times by 2050, reaching 4.8 billion tonnes of CO₂e annually in high-quality scenarios, with credit prices expected to climb to USD 60–104 per ton as technologies like direct air capture and nature-based solutions mature. From Paper to Digital: Tokenized Carbon Credits Blockchain technology is transforming carbon credits into digital tokens—secure, traceable, and tradable like cryptocurrency. Each token represents a verified credit, creating transparency and eliminating double-counting. Imagine logging into your digital wallet and seeing not just Bitcoin but climate coins backed by real-world impact. These tokenized credits could soon dominate decentralized finance platforms, merging sustainability with fintech innovation. Challenges on the Horizon Yet, the rise of carbon credits as a “climate coin” comes with real challenges. A major meta-study covering nearly 1 billion tonnes of CO₂ equivalents found that less than 16% of issued credits truly cut emissions. Price swings across project types add uncertainty, and greenwashing remains a major risk. Investigations show that 78% of the top 50 offset projects may be “likely junk,” raising doubts about their integrity. Weak verification and flawed third-party audits deepen these concerns, turning many credits into claims rather than real climate action. The Road Ahead Carbon pricing mechanisms like Sweden’s $130 per ton carbon tax and the EU ETS are pushing companies to rethink emissions as liabilities. Meanwhile, voluntary markets are booming as corporations race toward net-zero commitments. Stricter verification protocols from bodies like the Integrity Council for the Voluntary Carbon Market promise to weed out greenwashing, ensuring every credit delivers genuine climate impact. Could Carbon Credits Rule the Economy? If trends continue, carbon credits might become the most influential economic instrument of the century. They represent survival, responsibility, and opportunity all rolled into one. In a world where climate risk dictates financial stability, the “climate coin” could very well become the currency that matters most.

This Social Impact Report presents a comprehensive overview of Pierag’s initiatives and commitments during the period 1 April 2024 to 30 September 2025

In the contemporary business environment, the intersection of financial and non-financial reporting has evolved into a strategic imperative, particularly considering the growing emphasis on environmental, social, and governance (ESG) considerations. Drawing upon my 23 years of expertise as a Chartered Accountant and now as sustainability professional for couple of years, I've observed a notable paradigm shift in how organizations perceive and communicate their value creation mechanisms. Traditionally, financial reporting has been entrenched in monetary metrics, providing insights into a company's fiscal performance and solvency. Yet, this narrow focus fails to capture the full spectrum of value drivers and risk exposures faced by modern enterprises. Conversely, non-financial reporting encompasses a broader array of indicators, encompassing environmental impact, societal contributions, and governance practices, which significantly influence financial outcomes. The nexus between financial and non-financial reporting is deeply rooted in their symbiotic relationship and their collective influence on organizational resilience and competitiveness. Extensive research substantiates that firms demonstrating robust ESG performance are more likely to achieve sustained financial outperformance over the long term. According to a study by Harvard Business Review, companies with high ESG ratings outperformed their counterparts with lower ratings by 4.8% in stock returns over a five-year period. Furthermore, the significance of non-financial reporting transcends regulatory compliance, fostering stakeholder engagement, fortifying brand reputation, and differentiating market positioning. For instance, the renewable energy sector provides a compelling example of the symbiotic relationship between financial and non-financial reporting. Companies like Ørsted, a global leader in offshore wind energy, have successfully integrated ESG considerations into their financial reporting frameworks. By aligning their business model with sustainability goals and transparently disclosing their ESG performance metrics, Ørsted has not only attracted investors but also positioned itself as a frontrunner in the transition to a low-carbon economy. The ascendancy of non-financial reporting underscores a broader trend towards sustainable business practices and stakeholder-centric capitalism. As companies pivot towards sustainable development objectives and responsible corporate governance, they are redefining value creation paradigms to encompass ecological stewardship, social equity, and ethical governance. By embracing this holistic approach to reporting, organizations can unlock latent opportunities for innovation, growth, and competitive differentiation in an ever-evolving marketplace. In summation, the fusion of financial and non-financial reporting heralds a transformative shift in corporate transparency and accountability. As stewards of financial integrity and strategic advisors, we as financial and non-financial advisors are uniquely positioned to facilitate this transition, guiding organizations towards a more integrated and transparent reporting landscape that optimizes stakeholder value, fosters sustainable growth, and advances the broader imperatives of responsible business conduct.

What are Scope 4 Emissions - A New Category? Scope 4 refers to and is categorized as "Avoided Emissions" – the emissions that are prevented through the use of a product or service, rather than those directly emitted. It is not part of the GHG Protocol’s Scope 1, 2, or 3 officially, but is progressively being used in sustainability narratives and voluntary disclosures. It measures the climate benefit of technologies, products, or practices that reduce emissions either in the value chain or for the end users. It is commonly observed in sectors like energy-efficient appliances, digitization, and circular economy models, etc. Examples to Understand A manufacturing company adopting sustainable packaging that avoids plastic waste and the associated emissions. A service company calculating the avoided emissions enabling remote work, reducing the commuting-related emissions. A solar panel manufacturer calculating the emissions avoided by customers switching from coal-based power. Why Scope 4 Matters Aligns with science-based targets and net-zero journey of organizations that consider value-chain impacts. Showcases innovation, highlighting how products or technologies contribute to a low-carbon economy. Shows climate-positive contributions in addition to the organization’s own carbon footprints. Supports policy engagement, strengthening the case for favorable green policies and incentives. Establishes stakeholder trust, communicating proactive leadership in sustainability beyond compliance. Global Sustainability Frameworks and Guidance 1. GHG Protocol – Guidance on Avoided Emissions (Draft & Discussion Papers) Although not a formal standard as yet, the GHG Protocol has published discussion papers acknowledging "avoided emissions". It encourages voluntary, transparent disclosure, especially for innovative or green technologies. 2. Science Based Targets Initiative (SBTi) SBTi recognizes avoided emissions but does not count them toward science-based targets. It encourages companies to focus on actual emission reductions within Scopes 1, 2, and 3, but recognizes Scope 4 for product innovation and climate solutions. 3. CDP (Carbon Disclosure Project) CDP does not currently have a specific Scope 4 category but allows companies to disclose “emission reductions outside Scopes 1-3” in narrative or project-based disclosures. Innovative companies often use CDP’s open-text sections to communicate avoided emissions through case studies or product impact assessments. 4. EU Taxonomy and CSRD (Corporate Sustainability Reporting Directive) While not explicitly calling it Scope 4, CSRD and EU Taxonomy encourage disclosure of the “environmental impact of products and services”, including how they enable decarbonization of other sectors. Product use-phase impacts and contributions to climate change mitigation can align with avoided emission disclosures. 5. IFRS S2 (Climate-related disclosures) IFRS S2 (from ISSB) focuses on financially material climate risks and opportunities. Companies may disclose avoided emissions as part of their climate-related opportunities, especially if such reductions generate future economic benefits. Impact on Indian Companies Opportunities Scope 4 positioning enhances long-term enterprise value and brand equity. Helps in achieving extended producer responsibility (EPR) and Circular Economy goals under Indian Environmental Laws. Listed Indian companies preparing for BRSR Core, IFRS S2, and CSRD-style disclosures will find Scope 4 useful for showcasing product sustainability. For alignment with global supply chains, clients often seek suppliers who contribute to their net-zero goals. Demonstrating how your business enables decarbonization can attract ESG investors and global partners by this strategic differentiation. Challenges No standard method for quantifying avoided emissions, which may set a risk of greenwashing if not credibly backed. Verification complexities and therefore need for credible data, assumptions, and third-party assurance. Need for investment in LCA (Life Cycle Assessment) tools and supply chain data transparency. Risk of double counting as emissions reductions may also be claimed by the end user or downstream partner. Way Forward for Indian Industry Begin incorporating Scope 4 in ESG strategy documents as a voluntary but forward-looking metric. Work with consultants and assurance providers to develop robust methodologies. Integrate Scope 4 into product innovation and R&D processes. Align with global buyers and regulators increasingly valuing "climate-beneficial" products. Conclusion Scope 4 is not just about reducing emissions, it’s about enabling others to reduce theirs. For Indian companies, especially in technology, infrastructure, manufacturing, and renewable energy, Scope 4 offers an underexplored opportunity to amplify climate impact, unlock green revenue, and future-proof business models. As global standards evolve, early adoption of Scope 4 thinking can be a strategic advantage, positioning India as a proactive contributor to global decarbonization in the climate-conscious global economy.