The Institute for Energy Economics and Financial Analysis has published a comprehensive assessment examining how India’s Business Responsibility and Sustainability Reporting framework measures against the International Sustainability Standards Board’s climate disclosure standards, revealing significant disparities that could affect Indian corporations’ ability to access global sustainable finance. The analysis arrives at a pivotal moment when climate transition planning has moved from voluntary corporate citizenship to a fundamental component of financial risk assessment and capital allocation decisions.
As companies worldwide commit to net-zero targets and investors increasingly price climate-related financial risks into their investment decisions, the quality and comparability of transition plan disclosures have emerged as critical factors determining access to capital markets. The IEEFA assessment, grounded in an evaluation framework developed through analysis of 18 international frameworks and extensive consultations with regulators, companies, investors, and research institutions, highlights both the progress India has made and the substantial work that remains.
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Methodological Foundation and Analytical Framework
The Institute for Energy Economics and Financial Analysis structured its assessment around a climate transition plan framework that draws heavily on the Transition Plan Taskforce guidelines, which the organization considers the most robust reference point for evaluating transition plan disclosures globally. The TPT framework, initially developed in the United Kingdom and published in October 2023, has gained recognition as setting a “gold standard” for climate transition plan disclosures and has been integrated into IFRS Foundation materials to support implementation of ISSB standards worldwide.
Shantanu Srivastava, research lead for sustainable finance and climate risk at IEEFA, explained that the framework aims to evaluate the quality of climate-related disclosures, the essential elements of transition plans, and how these translate to actual progress by corporations on climate transition outcomes. Tanya Rana, energy analyst at IEEFA, emphasized that the assessment focuses on whether disclosures provide decision-useful information for investors seeking to understand transition risk, capital allocation strategies, and long-term resilience.
The evaluative framework comprises five major categories: Foundation, Governance, Implementation Strategy, Engagement Strategy, and Transparency. The current IEEFA analysis focuses on the first four categories, as Transparency reflects the outcomes of companies’ actions rather than the disclosure regulations governing the transition planning process itself. This methodological choice enables a clearer assessment of how regulatory frameworks structure the disclosure requirements that companies must satisfy.
Foundation: Strategic Ambitions and Scenario Analysis
The Foundation category examines how companies articulate their strategic ambitions for addressing climate change, identify the transition levers they plan to deploy, and employ scenario analysis to test the resilience of their responses to climate-related risks and opportunities. This foundational layer establishes the baseline against which all subsequent planning and implementation must be measured.
The ISSB’s IFRS S2 standard provides detailed requirements on the metrics companies must report regarding overall greenhouse gas reduction targets, climate resilience assessments, and transition plans. The standard explicitly requires scenario analysis as a tool for testing strategy resilience under different potential future states, including both physical climate impacts and transition pathways toward lower-carbon economies. Companies reporting under IFRS S2 must disclose how they have used scenario analysis to inform their strategic planning and risk management.
In June 2025, the IFRS Foundation published guidance on climate transition plan disclosures that builds on TPT disclosure-specific materials, tailoring aspects to ensure global applicability while maintaining full compatibility with the ISSB global baseline. This guidance addresses fragmentation in transition plan disclosures and provides entities with detailed direction on how to report effectively on transition plan-related aspects when applying IFRS S2.
India’s Business Responsibility and Sustainability Reporting framework, by contrast, addresses overall targets and planned climate responses at a broader, more general level. While BRSR requires companies to disclose environmental targets and approaches to managing climate-related risks and opportunities, it does not mandate scenario analysis. This absence represents a significant gap because scenario analysis serves as the primary mechanism through which companies demonstrate that their transition strategies remain viable under a range of possible futures, including those involving stringent climate policies, rapid technological change, or severe physical climate impacts.
Without mandatory scenario analysis requirements, Indian companies may articulate ambitious greenhouse gas reduction targets without demonstrating that they have stress-tested those targets against plausible scenarios or developed contingency plans for circumstances where baseline assumptions prove inaccurate. Investors analyzing Indian corporate climate disclosures consequently face challenges in assessing whether stated transition commitments reflect robust strategic planning or represent aspirational goals lacking operational foundations.
Governance: Oversight and Accountability Mechanisms
The Governance category focuses on the oversight and accountability mechanisms companies establish to ensure effective management of climate transition plans. Robust governance structures are essential because climate transition involves fundamental changes to business models, capital allocation priorities, operational processes, and risk management frameworks that require sustained board-level attention and senior management accountability.
ISSB standards provide extensive guidance on governance-related disclosures for climate matters, requiring companies to explain how governance mechanisms support their climate ambitions. Specifically, IFRS S2 requires disclosure of the governance body or individual responsible for oversight of climate-related risks and opportunities, how these responsibilities are reflected in terms of reference and organizational policies, and how the governance body or individual oversees the setting of climate-related targets and monitors progress against those targets.
The standard also requires companies to describe management’s role in governance processes, including whether specific positions or committees have been assigned responsibility for climate-related matters and the reporting lines between management and the oversight body. These disclosure requirements ensure that investors can assess whether companies have embedded climate considerations into their core governance structures rather than treating them as peripheral sustainability initiatives.
India’s BRSR framework emphasizes broader environmental, social, and governance principles rather than providing climate-specific governance requirements. While BRSR includes general questions about board oversight of ESG matters and the presence of sustainability committees, it does not drill down into the granular governance arrangements specifically supporting climate transition planning. This broader approach may align with India’s emphasis on comprehensive ESG integration but potentially misses opportunities to surface the specific governance mechanisms that distinguish credible climate transition plans from generic sustainability statements.
The governance gap becomes particularly significant when considering that effective climate transition requires board members and senior executives to possess sufficient climate literacy to evaluate transition strategies, assess climate-related risks, understand the implications of different policy scenarios, and make informed decisions about capital allocation in the context of decarbonization pathways. Without disclosure requirements that specifically address these climate governance capabilities, investors struggle to evaluate whether Indian companies possess the institutional capacity to deliver on their transition commitments.
Implementation Strategy: Converting Ambition into Action
The Implementation Strategy category examines how companies operationalize their transition plans, converting high-level ambitions into concrete, actionable steps with clear timelines, resource allocations, and accountability mechanisms. This represents the crucial link between aspiration and execution where many corporate climate commitments face their greatest challenges.
ISSB standards require detailed disclosure on how climate-related risks and opportunities impact financial position, performance, and cash flows. Companies must explain their strategies for addressing these risks and opportunities, including impacts on business model and value chain, resource allocation approaches, and progress against climate-related targets. The standards specifically require disclosure of quantitative and qualitative information about research and development priorities, investments in climate-related assets and technologies, and how climate considerations affect the company’s capital deployment and operational decisions.
For instance, a manufacturing company reporting under IFRS S2 would need to disclose not only its greenhouse gas reduction targets but also specific investments in low-carbon production technologies, changes to supply chain procurement to favor lower-emission suppliers, research and development expenditures directed toward product redesign for reduced lifecycle emissions, and capital expenditures for facility modifications to improve energy efficiency. These disclosures enable investors to assess whether the company’s capital allocation aligns with its stated climate ambitions.
India’s BRSR framework asks companies to report research and development expenditures and capital expenditures that generate environmental or social benefits. While this requirement captures important information, it lacks the granularity needed for comprehensive assessment of climate transition readiness. BRSR does not specifically require companies to explain how their overall capital allocation strategy reflects climate considerations, how they are managing the phase-out of high-emission assets, or what proportion of total capital expenditure is directed toward activities aligned with decarbonization pathways.
This difference in disclosure depth affects investor ability to distinguish between companies making substantive operational changes to achieve climate targets and those whose transition plans remain largely aspirational. Without detailed information linking financial resources to specific transition initiatives, investors cannot reliably assess execution risk or compare the credibility of transition plans across different companies or sectors.
Engagement Strategy: Stakeholder Interaction and Value Chain Collaboration
The Engagement Strategy category assesses how companies interact with stakeholders across their value chains, industries, policy environments, workforces, and communities to deliver their transition plans. Climate transition is inherently a collective undertaking that requires coordination across complex ecosystems of suppliers, customers, competitors, regulators, employees, and affected communities.
ISSB standards emphasize narrative disclosure of stakeholder engagement approaches related to climate matters. Companies must describe how they engage with value chain partners to understand Scope 3 emissions, collaborate with industry peers on sector-level transition challenges, interact with policymakers regarding climate regulation and carbon pricing mechanisms, manage workforce implications of business model changes, and address community concerns about climate transition impacts.
India’s BRSR framework provides specific, measurable indicators for stakeholder interaction, particularly regarding social and community impacts. The framework requires companies to report on stakeholder consultation processes, community development initiatives, employee welfare programs, and supplier engagement practices. This structured approach to stakeholder metrics represents an area where BRSR demonstrates comparative strength, offering more concrete indicators than ISSB’s emphasis on narrative disclosure.
For Indian companies operating in sectors with significant community dependencies—such as extractive industries, large-scale manufacturing, or infrastructure development—the BRSR requirements for detailed social impact reporting can surface important dimensions of climate transition that might receive less attention under purely financially-focused disclosure frameworks. Climate transitions that fail to address community impacts risk generating social resistance, regulatory complications, or reputational damage that ultimately undermines transition credibility.
However, the social strength of BRSR does not fully compensate for gaps in other transition planning dimensions. Effective climate transition requires both robust community engagement and clear linkages between emission reduction targets, identified risks and opportunities, selected transition levers, and the resilience of planned responses. Without comprehensive integration across all these elements, stakeholder engagement may address important social considerations without necessarily advancing climate transition objectives.
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Comparative Analysis and Global Implications
According to the IEEFA assessment, the International Sustainability Standards Board framework offers clearer linkages between overall greenhouse gas targets, alignment with global or national sectoral pathways, identified climate risks and opportunities, selected transition levers, and resilience testing through scenario analysis. This integrated approach enables investors to trace a logical chain from climate science and policy contexts through strategic analysis to specific operational responses.
The BRSR framework, while providing valuable insights into social impact and community engagement, does not offer equivalent depth for evaluating a company’s readiness for climate transition in financial terms. This gap could have material consequences for Indian companies seeking to access international capital markets where investors increasingly demand climate transition disclosures meeting ISSB-consistent standards.
A notable difference highlighted in the analysis is that ISSB published specific guidance on climate transition planning in 2025, allowing companies to report transition plan information under current standards based on the Transition Plan Taskforce framework. India’s BRSR currently lacks similar detailed guidance specifically addressing climate transition plan disclosure requirements, though the framework includes various elements that could contribute to transition planning if better integrated.
As companies increasingly set net-zero targets—with 25 of India’s largest corporates having already established net-zero or emission reduction commitments—the credibility and clarity of transition strategies become essential for maintaining investor confidence. Clear, structured transition plans help translate climate ambition into actionable implementation, demonstrating to capital providers that companies possess both the strategic vision and operational capacity to manage the transition to lower-carbon business models.
The IEEFA mapping exercise finds that neither BRSR nor ISSB alone provides a fully comprehensive view of a company’s climate transition plan. Each framework exhibits distinct strengths: ISSB excels in climate-specific financial disclosure requirements and transition planning guidance, while BRSR provides more structured social and community impact metrics. An ideal disclosure framework would integrate the climate transition depth of ISSB standards with the stakeholder engagement specificity of BRSR requirements.
Capital Access and Investor Expectations
The implications of disclosure quality gaps extend beyond regulatory compliance to fundamental questions of capital access. Global sustainable finance markets increasingly demand credible transition plans and forward-looking climate risk metrics as baseline requirements for investment eligibility. Institutional investors managing trillions in assets have committed to net-zero portfolio targets, creating structural demand for transparent, comparable information about how portfolio companies plan to decarbonize their operations.
Indian corporates risk losing access to this capital if climate disclosures remain high-level, fragmented, and non-standardized relative to global peers. International investors conducting comparative analysis across emerging markets will naturally favor companies providing disclosure quality that enables robust risk assessment and performance benchmarking. When Indian companies report under frameworks that lack the depth and specificity of ISSB standards, they may appear higher-risk than competitors offering more transparent transition planning information, even if actual climate performance is equivalent or superior.
This dynamic creates urgency for Indian policymakers and regulators to consider how BRSR can evolve to incorporate the climate transition planning elements that global capital markets increasingly expect. Several pathways exist for strengthening India’s climate disclosure framework without wholesale replacement of existing BRSR structures.
Potential Enhancement Pathways for BRSR
Short-term enhancements could focus on better integration of existing BRSR requirements to present a more cohesive transition planning picture. Companies currently disclose various climate-relevant information across different sections of BRSR reports—environmental targets in one section, capital expenditures in another, stakeholder engagement in a third—without necessarily connecting these elements into a unified transition narrative. Guidance encouraging companies to cross-reference and integrate climate-related disclosures could improve usability for investors seeking to understand overall transition strategies.
Medium-term enhancements might introduce specific supplemental disclosure requirements addressing transition planning gaps identified in the IEEFA analysis. These could include mandatory scenario analysis for large companies or high-emission sectors, enhanced requirements for disclosing climate-related capital expenditures and operational cash flow impacts, and guidance on linking greenhouse gas reduction targets to specific transition levers and implementation timelines.
Long-term convergence with ISSB standards represents a more fundamental alignment approach. As more than 20 jurisdictions representing over 50% of global GDP have already adopted or are adopting ISSB standards, momentum builds toward these frameworks becoming the effective global baseline for sustainability disclosure. India could maintain BRSR’s social and community engagement strengths while incorporating ISSB’s climate-specific requirements, creating a hybrid framework that serves both domestic policy priorities and international capital market expectations.
The Securities and Exchange Board of India, which mandates BRSR for the top 1,000 listed companies, faces the challenge of balancing multiple objectives: reducing reporting burden, maintaining disclosure relevance for diverse stakeholders, supporting Indian companies’ competitiveness in global capital markets, and advancing India’s climate policy goals. Any enhancement to BRSR must navigate these sometimes-conflicting priorities while ensuring that incremental complexity translates into genuine value for disclosure users.
Sector-Specific Considerations and Materiality
Climate transition planning challenges and disclosure needs vary substantially across economic sectors. Energy-intensive industries like steel, cement, chemicals, and power generation face fundamentally different decarbonization pathways than information technology, financial services, or consumer goods sectors. Effective disclosure frameworks must accommodate this sectoral diversity while maintaining sufficient standardization to enable cross-sector comparison and portfolio-level analysis.
The ISSB approach addresses sectoral variation through industry-based disclosure topics derived from SASB standards, which identify the subset of sustainability issues most likely to affect financial performance in specific industries. Companies must disclose information about industry-specific topics alongside core climate disclosure requirements applicable to all entities. This structure provides both comparability through common requirements and relevance through sector-tailored topics.
India’s BRSR could potentially strengthen its climate transition disclosure by developing sector-specific guidance or requirements that address the particular challenges different industries face in decarbonizing. For instance, transition planning for coal-dependent sectors raises distinct governance, implementation, and stakeholder engagement questions compared to transition planning for service sectors. Sector-specific guidance could help companies identify material climate issues for their industries and provide investors with more decision-useful information about how companies address sector-relevant transition challenges.
Just Transition Dimensions
An important consideration for India’s climate disclosure framework is how to incorporate just transition principles—the recognition that climate transitions must address social equity and distributional impacts to be sustainable and politically viable. India faces particular challenges around just transition given the scale of employment in coal and other carbon-intensive sectors, regional economic dependencies on fossil fuel industries, and the imperative to balance decarbonization with poverty reduction and development objectives.
The BRSR framework’s emphasis on social metrics and community engagement provides a foundation for incorporating just transition considerations into climate disclosure. However, as IEEFA has noted in separate work, just transition indicators remain absent from current BRSR requirements despite their relevance for assessing transition plan credibility and societal sustainability. Expanding BRSR to include just transition metrics could help channel capital toward companies with credible transition plans that address both environmental and social dimensions.
Regulatory Landscape and Implementation Considerations
India’s regulatory approach to sustainability disclosure has evolved rapidly. The Securities and Exchange Board of India introduced BRSR in 2021, initially on a voluntary basis for the fiscal year 2021-22, before making it mandatory for the top 1,000 listed companies from fiscal year 2023-24. SEBI has subsequently introduced BRSR Core, a subset of BRSR indicators requiring reasonable assurance from practitioners, with phased implementation across sectors.
This relatively recent vintage of India’s sustainability reporting regime means that companies and investors are still developing familiarity with BRSR requirements and norms around disclosure quality are still forming. Introducing significant enhancements to address climate transition planning gaps identified by IEEFA would need to account for implementation capacity, data availability, and the learning curve already underway.
Phased implementation represents a pragmatic approach that has worked well for BRSR Core. Climate transition planning requirements could similarly be introduced in stages, perhaps beginning with largest companies or highest-emission sectors before extending to broader coverage. This would allow regulators to refine requirements based on early implementation experience while giving companies time to develop necessary data systems and analytical capabilities.
International experience offers useful precedents. The European Union’s Corporate Sustainability Reporting Directive has adopted a phased approach with different application dates for large companies, small and medium enterprises, and listed companies. The United Kingdom has signaled intentions to make transition plan disclosure mandatory for large companies based on TPT framework recommendations. These precedents demonstrate how jurisdictions are navigating the tension between ambition in climate disclosure requirements and pragmatism about implementation timelines.
Looking Forward: Convergence and Competitiveness
The IEEFA assessment positions climate transition planning as a unified corporate exercise requiring integration across multiple disclosure dimensions. The analysis highlights opportunities to improve consistency and complementarity across existing sustainability standards, benefiting both corporate preparers who must satisfy disclosure requirements and investors who use disclosed information for capital allocation decisions.
For India, the choice is not necessarily between maintaining BRSR unchanged or wholesale adoption of ISSB standards. Rather, the challenge involves thoughtfully enhancing BRSR to incorporate climate transition planning depth that international capital markets increasingly expect while preserving distinctive elements that serve India’s development priorities and stakeholder ecosystem.
As global climate finance flows increasingly concentrate in markets offering transparent, comparable disclosure of climate risks and transition plans, the quality of India’s climate disclosure framework will partly determine Indian companies’ ability to access capital on competitive terms. Addressing gaps identified in the IEEFA analysis represents not merely a technical exercise in disclosure standardization but a strategic question affecting India’s position in global sustainable finance markets.
The convergence of disclosure standards globally around ISSB as a baseline creates both challenges and opportunities for India. Challenges include the need to upgrade disclosure frameworks, build corporate capacity for enhanced climate reporting, and ensure that global standards accommodate diverse national circumstances. Opportunities include the potential for Indian companies to access larger pools of climate-conscious capital, reduced disclosure burden from having to satisfy multiple different standards, and stronger information foundations for India’s own climate policy development and financial stability assessment.
Ultimately, the quality of climate transition disclosure reflects and shapes corporate behavior. Clear disclosure requirements drive companies to develop more rigorous transition plans, better integrate climate considerations into strategy and capital allocation, and strengthen governance of climate-related risks and opportunities. As India advances its climate policy ambitions and seeks to mobilize the substantial finance needed for its own economic transition, ensuring that disclosure frameworks provide decision-useful information about how companies plan to navigate this transition serves multiple policy objectives simultaneously.
The IEEFA assessment provides a valuable benchmark for evaluating where India’s disclosure framework stands relative to emerging global norms and identifies specific areas where enhancements could strengthen the quality, comparability, and decision-usefulness of climate transition disclosures by Indian companies. How India responds to these findings will help determine whether Indian corporations can fully participate in global sustainable finance markets or find themselves disadvantaged by disclosure frameworks that fall short of international investor expectations.
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By: Montel Kamau
Serrari Financial Analyst
27th January, 2026
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