OECD: India Leads Asia in Mandatory Sustainability Assurance and Director Duties
SDG 12: Responsible Consumption and Production | SDG 16: Peace, Justice and Strong Institutions
Institutions: Ministry of Finance | Securities and Exchange Board of India (SEBI)
The OECD report “Board Responsibility and Sustainability-Related Disclosure in Asia” (2025) examines boards’ roles in overseeing sustainability disclosures across Asian jurisdictions including India, alongside France and the UK. It covers disclosure scopes, standards, assurance, directors’ duties, enforcement against sustainability washing (disinformation or misinformation in claims), and policy reforms to boost governance. Key focus: boards must ensure disclosure integrity amid rising sustainability risks to enterprise value
The report highlights India’s leading role in Asia for adopting comprehensive and legally mandated sustainability disclosure requirements. India’s framework, established by the Securities and Exchange Board of India (SEBI), mandates the top listed companies to report under the local Business Responsibility and Sustainability Reporting (BRSR) framework, which covers all material sustainability matters and value chain information. Furthermore, India is one of the few Asian jurisdictions that has already put in place mandatory assurance requirements for the BRSR Core (detailed ESG disclosures). This phased assurance requirement begins with the top 500 listed companies in FY 2025-2026, extending to the top 1,000 by 2026-2027.
This pluralist approach is legally enshrined in the Companies Act, 2013, which requires Indian directors to act in the best interests of the company, its employees, shareholders, the community, and for the protection of the environment. Judicial interpretation has reinforced this, with the Supreme Court recognizing the ‘right against the adverse effects of climate change’ as a constitutional right. In terms of enforcement, India employs an Adaptive Strategy, where breach of BRSR requirements is governed under the generic securities law mechanisms of SEBI’s LODR (Listing Obligations and Disclosure Requirements) Regulations. SEBI uses tools like the Industry Standards Forum (ISF) for co-regulatory guidance and issues pre-enforcement advisory letters to ensure compliance.
Policy Relevance: The OECD report underscores that India’s governance framework—mandating sustainability assurance and embedding the Pluralist Model—is a global benchmark, aligning legal duties with climate risk oversight. This robust regulatory architecture, coupled with an adaptive enforcement strategy, is essential for positioning Indian markets to meet global sustainability best practices and tackle corporate misrepresentation effectively.
What is the Business Responsibility and Sustainability Reporting (BRSR) framework?→ The BRSR framework is a mandatory, standardized reporting format introduced by the Securities and Exchange Board of India (SEBI) for the top 1,000 listed companies by market capitalization. It requires companies to disclose comprehensive information on their performance against nine core principles, including environmental, social, and governance (ESG) factors, replacing the older Business Responsibility Report. The BRSR framework covers all material sustainability matters, metrics for goals, and value chain information. Notably, the BRSR Core segment, covering key ESG disclosures, now has mandatory assurance requirements phased in from FY 2025-2026 for the largest listed firms. The primary purpose of the BRSR is to enhance the quality, comparability, and reliability of non-financial disclosures, helping investors and stakeholders make informed decisions about a company’s sustainable value creation. This framework is fundamentally related to the Pluralist Governance Model because it provides the regulatory mechanism for companies to fulfill their obligations under that model in India.
What is the Pluralist Model in Corporate Governance? The Pluralist Model, as adopted in India and China, is a governance system where the company’s best interests are understood to include the interests of both shareholders and non-shareholder constituents (stakeholders), such as employees and the community, on an equal footing. This model imposes a heightened responsibility on directors to consider sustainability and climate risks in all major decisions.
Follow the full news here: OECD (2025), Board Responsibility and Sustainability-Related Disclosure in Asia, OECD Publishing, Paris