Introduction

ESG compliance India has evolved from voluntary commitments to legally binding frameworks. So has BRSR reporting, CSRD requirements, and climate disclosure across the United States, Europe, and the Middle East. Most enterprises in 2025 face a critical operational challenge: determining which regulations apply, what they require, and how to stay compliant without drowning in fragmented processes.

This guide breaks down the major ESG regulations shaping corporate reporting in 2025-26, with a clear focus on what companies must do in India, Europe, the United States, and the UAE.

India: BRSR, BRSR Core, and Value Chain Reporting

India's ESG compliance framework centers on the Business Responsibility and Sustainability Report, mandated by the Securities and Exchange Board of India (SEBI). BRSR reporting is no longer optional for the top 1,000 listed companies by market capitalization. Starting from the financial year 2022-23, these companies must file detailed sustainability disclosures aligned with the National Guidelines on Responsible Business Conduct (NGRBC).

The BRSR reporting framework covers nine principles spanning environmental stewardship, employee well-being, stakeholder engagement, human rights, and governance. Companies report on both qualitative policies and quantitative metrics, including energy consumption, water usage, waste management, greenhouse gas emissions, and diversity statistics. The structure is designed to create comparability across sectors while addressing India-specific sustainability priorities.

In 2023, SEBI introduced BRSR Core, a subset of essential metrics subject to reasonable assurance by external auditors. This assurance requirement applies to the top 150 listed companies initially, with phased expansion to the top 1,000 over the coming years. BRSR Core focuses on Key Performance Indicators like Scope 1 and Scope 2 emissions, water withdrawal, and gender diversity ratios. The assurance mandate raises the bar on data accuracy and internal controls, pushing companies to formalize their ESG compliance India data collection workflows.

Value chain disclosures represent the next frontier for ESG compliance India. SEBI expects companies to eventually report on Scope 3 emissions and social metrics across their supplier and distribution networks. While full value chain reporting isn't yet mandatory for all BRSR reporting filers, leading companies are building the infrastructure early to avoid scrambling when extended disclosure requirements roll out.

The BRSR reporting framework aligns with global standards like GRI and supports interoperability with the ISSB. Indian companies with multinational operations can often map their BRSR reporting data to satisfy CSRD requirements or other international frameworks, reducing duplication. However, BRSR reporting has unique India-centric elements around community impact, local employment, and inclusive growth that require dedicated attention.

Europe: CSRD, ESRS, and Corporate Sustainability Due Diligence

The European Union has built the world's most comprehensive mandatory ESG reporting architecture through the Corporate Sustainability Reporting Directive. CSRD requirements apply to over 50,000 companies, including all large EU-based entities and non-EU companies with substantial European operations. The directive replaces the older Non-Financial Reporting Directive with far more detailed and enforceable standards.

ESRS reporting refers to the European Sustainability Reporting Standards developed by the European Financial Reporting Advisory Group (EFRAG). These standards define exactly what information companies must disclose, covering climate change, pollution, water and marine resources, biodiversity, circular economy, workforce, workers in the value chain, affected communities, consumers, and business conduct. The standards also mandate double materiality assessments, requiring companies to evaluate both how ESG issues affect their financial performance and how their operations impact society and the environment.

CSRD requirements implementation follows a phased timeline. Companies already subject to the old Non-Financial Reporting Directive started reporting under CSRD requirements for fiscal year 2024 (published in 2025). Large companies not previously covered come online for fiscal year 2027 (published in 2028), following a two-year delay under the Stop-the-Clock directive. Listed SMEs, small non-complex credit institutions, and captive insurance undertakings follow for fiscal year 2028 (published in 2029), also delayed by two years. Non-EU companies with significant EU activity face CSRD requirements compliance for fiscal year 2028 (published in 2029).

The EU Omnibus Simplification Package, proposed in February 2025 with a provisional agreement reached in December 2025, aims to reduce the burden by cutting mandatory ESRS reporting data points by over 70% and streamlining double materiality processes. Final adoption is expected by mid-2026. Even with simplification, CSRD requirements demand granular disclosures on Scope 1, 2, and 3 emissions aligned with the GHG Protocol, forward-looking transition plans, and line-by-line assurance-ready documentation.

The Corporate Sustainability Due Diligence Directive (CSDDD) adds another layer. This regulation requires large companies to identify, prevent, and mitigate adverse human rights and environmental impacts throughout their value chains. CSDDD compliance means mapping suppliers, conducting risk assessments, implementing corrective action plans, and establishing grievance mechanisms. While CSDDD and CSRD requirements serve different purposes (due diligence versus disclosure), they overlap significantly on Scope 3 emissions and supply chain accountability.

United States: SEC Climate Rules and State-Level ESG Regulations

ESG disclosure USA remains fragmented, with federal uncertainty and aggressive state-level action creating a patchwork landscape. The Securities and Exchange Commission adopted climate disclosure rules in March 2024, requiring public companies to report climate-related risks, governance structures, and greenhouse gas emissions. However, legal challenges and political resistance have delayed implementation, leaving many companies in limbo.

The SEC ESG rules focus on material climate risks affecting business operations, strategy, and financial performance. Large accelerated filers and accelerated filers would disclose Scope 1 and Scope 2 emissions if material, with limited assurance required over time. Scope 3 emissions disclosure was initially proposed but dropped from the final SEC ESG rules due to measurement complexity and cost concerns. The rule aligns closely with the TCFD framework, emphasizing governance, strategy, risk management, and metrics.

Despite federal uncertainty around SEC ESG rules, states are filling the gap. California passed three landmark climate laws in 2023. Senate Bill 253 (Climate Corporate Data Accountability Act) requires companies with annual revenues over $1 billion doing business in California to disclose Scope 1, 2, and 3 emissions starting in 2026. Senate Bill 261 (Climate-Related Financial Risk Act) mandates climate risk reporting for companies over $500 million in revenue. Assembly Bill 1305 regulates voluntary carbon offset claims and prevents greenwashing.

New York recently enacted a climate superfund law imposing financial penalties on companies deemed responsible for historical greenhouse gas emissions. Other states are exploring similar measures. This state-by-state approach creates compliance complexity for national and multinational companies, who must track varying thresholds, timelines, and disclosure formats.

The practical result for ESG disclosure USA is that large companies with California operations or broader stakeholder pressure are moving forward with climate reporting regardless of federal rules. Investors continue demanding ESG data through voluntary frameworks like CDP, SASB, and TCFD. The momentum toward ESG disclosure USA persists even as political narratives suggest otherwise.

UAE: Federal Climate Law and Exchange-Level ESG Disclosure

The United Arab Emirates has accelerated ESG regulations UAE in recent years, driven by economic diversification goals and positioning as a regional sustainability hub. The UAE Ministry of Climate Change and Environment introduced a federal climate law establishing national targets for emissions reduction and renewable energy adoption. While the law primarily affects government entities and major state-owned enterprises, it signals broader expectations for private sector climate action.

Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) both require listed companies to disclose ESG information. The exchanges follow internationally recognized frameworks including GRI and SASB, with specific guidance on materiality assessments and reporting boundaries. Companies must publish annual sustainability reports covering environmental performance, social responsibility, and governance practices.

Abu Dhabi has been particularly proactive through the Abu Dhabi Sustainability Agenda and the emirate's Economic Vision 2030. Large companies operating in Abu Dhabi, especially in energy, real estate, and finance sectors, face increasing scrutiny on carbon intensity, water usage, and social impact metrics. The Abu Dhabi Global Market (ADGM) financial free zone has introduced ESG regulations UAE for regulated entities aligned with international best practices.

Dubai's DIFC (Dubai International Financial Centre) similarly mandates ESG disclosure for certain financial institutions and asset managers. The focus includes climate risk, diversity and inclusion, and corporate governance standards. As regional financial centers compete for international capital, ESG transparency has become a competitive differentiator.

ESG regulations UAE remain lighter than European mandates but heavier than historical Middle Eastern standards. The trajectory points toward greater alignment with global frameworks, particularly as UAE-based multinationals seek to attract ESG-focused investors and expand into European or American markets where disclosure is mandatory.

Mandatory vs. Voluntary: Understanding the Compliance Landscape

The divide between mandatory and voluntary ESG disclosure continues narrowing. Frameworks once considered voluntary (like GRI, SASB, and TCFD) now underpin mandatory regulations. The ISSB standards incorporate SASB sector guidance. CSRD requirements reference GRI for interoperability. SEC ESG rules adopt TCFD structure.

Mandatory frameworks impose legal consequences for non-compliance, including financial penalties, regulatory sanctions, and reputational damage. BRSR reporting failures can result in SEBI enforcement actions. CSRD requirements violations carry fines up to €5 million or 5% of annual revenue in some EU member states. California climate laws authorize the Attorney General to pursue penalties for inaccurate or incomplete disclosures.

Voluntary frameworks still matter for companies below mandatory thresholds, those operating in jurisdictions without strict rules, or organizations pursuing sustainability leadership beyond compliance. Many companies adopt GRI or ISSB voluntarily to build stakeholder trust, attract responsible investors, or prepare for future regulation. Voluntary reporting also allows flexibility in materiality determination and disclosure depth.

India BRSR reporting applies to the top 1,000 listed companies. It covers nine NGRBC principles with quantitative KPIs. BRSR Core assurance is required for the top 150 companies, with phased expansion planned. SEBI enforces compliance through oversight and penalties for non-filing.

EU CSRD requirements apply to 50,000+ large companies and listed entities. ESRS reporting standards use double materiality as the core assessment approach. Phased assurance requirements start with limited and move toward reasonable assurance. Member states can impose penalties up to 5% of annual revenue for violations.

California SB 253/261 applies to companies over $500 million to $1 billion in revenue doing business in California. The laws cover Scope 1, 2, and 3 emissions plus climate risk disclosures. Third-party assurance is required for emissions data. The Attorney General can impose penalties for non-compliance or inaccurate reporting.

ESG regulations UAE through exchange rules apply to listed companies on DFM and ADX. The frameworks align with GRI and SASB for ESG metrics. Assurance is encouraged but remains voluntary for most disclosures. Exchange compliance requirements enforce adherence to disclosure standards.

GRI Standards apply globally to any organization choosing to adopt them. The framework covers universal, sector-based, and topic-based sustainability impacts. Third-party assurance is voluntary but increasingly common. Enforcement comes through reputational accountability rather than legal penalties.

ISSB standards (IFRS S1 and S2) apply to any organization, though jurisdictions are increasingly adopting them as mandatory. The standards focus on investor-focused financial materiality and climate disclosures. Assurance is voluntary but building toward mandatory requirements in many markets. Adoption by securities regulators provides enforcement mechanisms.

SASB Standards cover 77 industry-specific frameworks available to any organization. The metrics focus on financially material, sector-specific sustainability factors. Assurance remains voluntary. Investor expectations rather than regulation drive adoption and compliance.

The trend is clear: voluntary becomes mandatory. Companies waiting for perfect regulatory clarity will find themselves behind. The smarter approach involves building ESG compliance India infrastructure now that can flex across multiple frameworks, whether mandatory or voluntary.

Building Compliance Infrastructure That Scales

Navigating ESG compliance India, CSRD requirements, SEC ESG rules, and ESG regulations UAE simultaneously requires centralized data management, framework mapping, and automated workflows. Spreadsheets break down at scale. Manual data collection across subsidiaries, plants, and suppliers creates errors, delays, and audit failures.

Modern ESG platforms consolidate sustainability data from enterprise resource planning systems, facility management tools, and supplier portals. Emissions calculations follow GHG Protocol methodologies for Scope 1, 2, and 3 categories, with built-in validation to catch anomalies before reports go out. Multi-framework reporting capabilities allow companies to input data once and generate outputs for BRSR reporting, ESRS reporting, GRI, SASB, and investor-specific requests without duplication.

BreatheESG automates compliance workflows for companies managing overlapping regulatory requirements across geographies. The platform supports BRSR reporting aligned with SEBI guidelines, CSRD requirements mapped to ESRS reporting standards, and ESG disclosure USA following TCFD and California frameworks. INARA, the AI engine, validates data completeness, suggests autofills based on historical patterns, and flags discrepancies that could trigger audit issues.

The platform reduces reporting time by over 50% through automation, generates audit-ready documentation with exportable logs, and provides unlimited contributor access for cross-functional teams. Whether a company operates in Mumbai, Munich, Manhattan, or Dubai, the underlying data architecture remains consistent while outputs adapt to local regulatory formats for ESG compliance India, CSRD requirements, or ESG regulations UAE.

As regulations tighten and assurance requirements expand, companies need systems that can prove data lineage, demonstrate internal controls, and support external verification. Building that infrastructure now (before the next wave of mandatory disclosures hits) separates compliance leaders from laggards scrambling to catch up.

Frequently Asked Questions

What is the difference between BRSR and BRSR Core?

BRSR reporting is India's comprehensive sustainability reporting framework for the top 1,000 listed companies, covering nine principles and extensive qualitative and quantitative disclosures. BRSR Core is a focused subset of essential metrics requiring reasonable assurance from external auditors, currently mandatory for the top 150 companies with phased expansion planned.

Do non-EU companies need to comply with CSRD?

Yes, if they have substantial EU operations. Non-EU companies with EU subsidiaries meeting size thresholds or generating significant EU revenue must comply with CSRD requirements starting from fiscal year 2028 (published in 2029). The exact thresholds depend on net turnover and subsidiary characteristics.

Are SEC climate disclosure rules enforceable in 2025?

The SEC ESG rules face ongoing legal challenges and implementation delays. While adopted in March 2024, enforcement timelines remain uncertain due to litigation and political pressure. However, companies should monitor developments closely as court rulings could trigger rapid compliance deadlines for ESG disclosure USA.

What are Scope 1, 2, and 3 emissions?

Scope 1 covers direct emissions from owned or controlled sources like company vehicles and on-site fuel combustion. Scope 2 includes indirect emissions from purchased electricity, steam, heat, or cooling. Scope 3 encompasses all other value chain emissions, including purchased goods, business travel, employee commuting, transportation, and use of sold products. Scope 3 typically represents 70-90% of total footprint.

How does double materiality differ from financial materiality?

Financial materiality assesses how ESG issues affect a company's financial performance, cash flows, and enterprise value. Impact materiality evaluates how a company's operations affect people and the environment. Double materiality, required under ESRS reporting, demands assessment of both dimensions, ensuring companies report on ESG factors material from either perspective.

What penalties exist for ESG non-compliance?

Penalties vary by jurisdiction. BRSR reporting failures can result in SEBI enforcement actions and listing non-compliance issues. CSRD requirements violations carry fines up to €5 million or 5% of annual revenue in certain EU countries. California climate laws authorize Attorney General penalties for inaccurate disclosures. Reputational damage and investor backlash represent additional non-regulatory consequences for ESG compliance India, ESG disclosure USA, and ESG regulations UAE violations.

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