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As climate transition planning becomes central to global sustainability reporting and capital allocation, Indian companies risk being left behind due to gaps in the country’s Business Responsibility and Sustainability Reporting (BRSR) framework, according to a new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA).
The study compares India’s mandatory BRSR disclosures with the International Sustainability Standards Board’s (ISSB) climate standard (S2) and finds that while BRSR offers a broad ESG lens and stronger social indicators, it falls short on climate-specific transition planning: a growing requirement for global investors, lenders and insurers.
With sustainable finance markets increasingly demanding credible, forward-looking transition plans, Indian corporates could face higher financing costs or reduced access to capital if disclosures remain high-level and unstandardised, the report warns. Global investors are now looking beyond emissions inventories, seeking clarity on how companies plan to decarbonise, manage climate risks and fund the transition.
“Without robust transition disclosures, Indian firms may struggle to meet the expectations of international capital markets that are aligning with ISSB standards,” the analysis notes.
IEEFA acknowledges that BRSR performs better than ISSB in some areas, particularly in social responsibility and community engagement indicators. However, it flags weak treatment of climate-linked stakeholder dependencies — such as supplier emissions, workforce transitions and customer exposure — which are critical to credible transition planning.
In contrast, ISSB S2 provides detailed guidance on climate governance, risk management, scenario analysis and capital deployment, areas where BRSR remains largely aspirational.
The study identifies several omissions that undermine the credibility of climate transition plans under BRSR. These include the absence of mandatory scenario analysis, weak links between emissions targets and concrete transition levers, limited disclosure on climate-linked executive remuneration, and no requirement to outline how transition plans will be financed.
“Transition planning is not just about targets — it is about governance, accountability and capital allocation. These elements are largely missing from BRSR,” the report finds.
IEEFA calls for a phased strengthening of BRSR to better align with global climate disclosure norms. Recommended steps include integrating climate scenario analysis, requiring companies to disclose how emissions targets will be achieved, strengthening governance disclosures, and mandating funding strategies for transition plans.
As India positions itself as a major destination for global capital and green investment, aligning corporate disclosures with evolving international climate standards could be critical — not just for transparency, but for competitiveness in a rapidly changing financial landscape.