Vague commitments will no longer pass muster: Sebi member Amarjeet Singh

Amarjeet Singh has had a career spanning nearly three decades with the Securities and Exchange Board of India (Sebi). A whole-time Sebi member, he has extensive experience in the development, regulation and supervision of the Indian securities markets.

Singh drove Sebi’s engagements on sustainability reporting in recent years. He conceptualised India Inc’s low-carbon transition journey through Business Responsibility and Sustainability Reporting (BRSR) and the formation of the Social Stock Exchange and its related ecosystem in India.

In an interview with Business Today, Singh says that climate and sustainability-related risks are increasingly translating into economic and financial risks.

Sebi has received feedback from the ESG Advisory Committee on the need for consolidated data instead of standalone data, and sector specific disclosures to further enhance decision-usefulness. Consolidated sustainability disclosures are important to enable investors to get a complete picture of long-term enterprise value.

Singh says that Sebi did not intend for a static framework for BRSR and that it has to evolve with market maturity, investor needs, and global developments, while remaining grounded in domestic realities. Edited excerpts:

Q: What role does a securities market regulator like Sebi play in the environment and climate space?

A: Climate risk is no longer just an environmental story — it’s a financial story. Climate and sustainability-related risks are increasingly translating into economic and financial risks, affecting business models, asset valuations and long-term growth prospects. Our role becomes relevant because these risks have clear and growing implications for investors and markets.

Our approach is anchored in disclosure. Financial markets work efficiently only when material information is available. Sustainability risks are increasingly material—so investors need to see them, understand them, and price them.

Sebi has mandated sustainability disclosures through the BRSR framework for the top 1,000 listed entities, by market capitalisation.

We have also implemented a comprehensive framework for ESG debt securities, including green, social, and sustainability-linked bonds. The objective is to provide credible and well-defined channels through which capital can be directed towards sustainable outcomes.

Regulation of ESG service providers is another area of work. A growing set of investors relies on ESG ratings as an input into their investment decisions. We regulate ESG rating providers, so the ratings investors rely on are credible and conflict-free.

Q: What has the feedback been since the introduction of BRSR? 

A: Overall, the feedback has been positive and encouraging. Structured, quantitative disclosures significantly improve usability. With the analytical tools available today, investors can process and analyse sustainability data more efficiently and ask companies the right questions.

I would like to attribute the main reason for BRSR’s success to the solid foundational work done by Sebi before its launch in 2021. BRSR was introduced after extensive, proactive and deep consultation with corporates, investors, and other stakeholders. From the outset, the intent was to design a disclosure regime that is calibrated to the needs of Indian markets.

Q: What can we expect from the regulator going ahead?

A: We have received feedback from our ESG Advisory Committee that the availability of consolidated instead of standalone data, and sector-specific disclosures would further enhance decision-usefulness. Implementation of a common taxonomy would further enhance comparability, an area where work is ongoing.

Our approach has been first to let this culture of making sustainability disclosure set in. Corporates should feel comfortable. We have to proceed in a calibrated, gradual manner that should not unduly enhance the cost of compliance.

Consolidated sustainability disclosures are important, so as to align the reporting boundaries for financial and non-financial reporting and enable investors to get a complete picture of long-term enterprise value. At the same time, we must recognise that issues of data availability, control and ownership make consolidated reporting more challenging.

Similarly, today, BRSR is a general template, and there is one school of thought that if you make it sector-specific, then the disclosure becomes more meaningful. Ultimately, we did not intend for the BRSR to be a static framework. It has to evolve with market maturity, investor needs, and global developments, while remaining grounded in domestic realities.

Q: Value chain reporting has been included in the BRSR Core. How has the response been?

A: It’s one of the significant—and perhaps, the most difficult—parts of sustainability reporting. For many companies, the bulk of their environmental footprint isn’t in their own operations; it’s upstream in raw materials or downstream in how products are used. Investors need that complete picture.

Accordingly, the BRSR originally included certain leadership indicators relating to the value chain, including disclosures on assessment of value chain partners and Scope 3 greenhouse gas emissions. Leadership indicators contain voluntary points.

Subsequently, in 2023, disclosures and limited assurance requirements for select metrics under the BRSR Core framework were extended to the value chain of listed entities on a comply-or-explain basis and with a calibrated scope. These disclosures were initially proposed to apply from FY25, with limited assurance requirements from FY26.

But we also heard clearly from the market: this is genuinely hard. Companies depend on hundreds of suppliers for data, many of whom are still building their own systems. Value chain disclosures are now voluntary rather than comply-or-explain, timelines were extended, and the scope was narrowed to partners accounting for 2% or more of purchases or sales. The goal is progress, not perfection on day one.

Q: Globally, ESG is facing a serious backlash in some parts of the world — regulatory rollbacks, political attacks. What is the future?

A: I’d separate two things: the political discourse and the underlying risk reality. Political headwinds in some jurisdictions are real. Political shifts do not, however, make climate risk disappear. A company exposed to water scarcity or carbon pricing faces those risks regardless of regulatory mandates.

Investor-led pressure will therefore continue to sustain the momentum for voluntary sustainability disclosures, even in the roll-back or relaxation of regulatory mandates. That pressure isn’t going away.

As we look to the future, several themes are likely to shape the sustainability landscape. First, we can expect an increasing connection between financial and sustainability reporting. This shift recognises the inter-linkage between the financial risks a company faces from climate change and the impact that it creates for the planet. Integration of these perspectives will enable a better understanding of the risks and opportunities faced by a company.

Secondly, the challenge of greenwashing will become more pronounced. As sustainability claims proliferate, regulators will need to scale up their oversight capabilities.

Third, vague commitments will no longer pass muster. Credible transition planning will become essential. Companies will need to go beyond intent and articulate practical, time-bound pathways, backed by clear metrics and financial implications.

The journey will not be without its challenges, in particular, the fundamental tension between profitability and sustainability. The short-term gains rewarded by the market are more visible, and the long-term climate risk is underpriced. A more nuanced understanding of value needs to be developed. The calculus has to change.

Views are personal.

@richajourno