BRSR Series. Part 3: Value Chain Partner Reporting

In the first two posts of this series, we've unpacked how BRSR Core applies to a listed company's own operations — the nine KPIs, the assurance glide path, who can audit what. But BRSR Core doesn't stop at the boundary of the listed entity. It reaches into the value chain: the suppliers a company buys from, and the customers and distributors it sells to.

This is the part of BRSR Core that catches most people off guard — not because the rule is complicated, but because of who it quietly pulls into scope. A significant share of Indian value chains run through MSMEs and private limited companies that have never filed an ESG disclosure in their life. Understanding this requirement, and preparing for it, matters whether you're the listed company doing the reporting, or the supplier/buyer who might get asked for data.

This article walks through what the regulation actually requires, who it applies to and from when, the practical friction everyone runs into, and a concrete action plan for listed companies building this out for the first time.

What Counts as "Value Chain" Under BRSR Core?

Value chain disclosures are made by the listed company as part of its Annual Report, under BRSR Core. The regulation doesn't ask companies to report on every supplier and buyer — that would be operationally impossible for most large enterprises. Instead, it draws a line based on materiality:

Upstream partners — suppliers individually accounting for 2% or more of the company's purchases, by value.

Downstream partners — buyers and distributors individually accounting for 2% or more of the company's sales, by value.

There's also a practical ceiling: entities may limit their value chain disclosure to cover 75% of total purchases and sales, by value. Effectively, companies will not be required to cover more than 38 (~75%/2%) upstream or downstream partners each, at anytime (even if they meet the 2% criteria).

The net effect: if you're a vendor or customer that represents a meaningful chunk of a listed company's business, you may be swept into their ESG reporting perimeter — regardless of whether you're listed yourself, regardless of your size, and regardless of whether you've ever measured a GHG footprint before.

How the Data Actually Gets Reported

Once a value chain partner is in scope, the listed company reports the same BRSR Core KPIs for that partner — but only to the extent the data is attributable to the business relationship with that specific partner. A company isn't asking its suppliers to disclose their entire enterprise footprint; it's asking for the slice relevant to what that partner supplies or buys.

It is important to note that value chain reporting covers only BRSR core indicators and not the entire BRSR itself.

Companies have flexibility in how they structure this reporting:

• Segregated reporting — disclosed separately for upstream and downstream partners. This gives more granular, partner-type-specific visibility, but takes more effort to compile.

• Aggregate reporting — disclosed as one combined figure across the value chain. Simpler to produce, especially where partner-level segregation isn't yet feasible.

Whichever approach is used, the scope of reporting and any assumptions or estimates must be clearly disclosed. Given that data quality will vary wildly across a value chain — a large, sophisticated vendor might have precise emissions data, while a small MSME might only be able to offer a rough estimate — transparency about methodology is not optional. It's what keeps the numbers credible.

The Company must also disclose what % of total purchases and sales that reporting actually covers. A lower coverage may not lead to compliance risk in case of voluntary disclosures, but it is important to be transparent.

Applicability and Timeline

This isn't a mandate that lands on every listed company overnight. It follows a voluntary, phased rollout:

Milestone	Timeline
ESG disclosures for value chain apply to the top 250 listed entities (by market capitalization)	Voluntary from FY 2025–26
Assurance/assessment of these value chain disclosures	Voluntary from FY 2026–27
Reporting of prior-year comparative data	Voluntary in the first year of reporting (e.g., FY 2024–25 data is optional for FY 2025–26 disclosures)

The voluntary framing matters — but "voluntary" in Indian ESG regulation has a track record of becoming "expected" fairly quickly, and then mandatory soon after. BRSR itself followed exactly this arc. Companies that treat this phase as a dress rehearsal will be in a far stronger position when assurance requirements tighten.

The Practical Challenge: It's Simpler on Paper Than in Practice

On paper, value chain reporting looks like a straightforward data pull. In practice, it rarely plays out that cleanly, for three reasons:

1. Suppliers don't track this information. Most MSMEs and private companies simply don't have ESG data systems in place. Asking for GHG or water footprint data often means asking a supplier to measure something for the very first time.

2. Limited awareness and capability. Even where there's willingness, there are real capability gaps — teams don't know what "Scope 1 emissions" means, let alone how to calculate them.

3. Administrative difficulty. Coordinating data collection across dozens of value chain partners, each with different levels of readiness, is a heavy manual lift with no shortcuts.

None of this is a reason to avoid the exercise — but it is a reason to plan for it properly rather than treating it as a last-minute data request.

An Action Plan for Companies Doing the Reporting

If you're a listed company preparing to report value chain ESG data, here's how to approach it without creating friction across your supplier and buyer relationships:

1. Map your value chain first. Before requesting any data, are significant and material. You're not obligated to chase every vendor. A clear map also lets you decide, upfront, whether you're aiming for the full 75% coverage cap or a more conservative starting scope.

2. Expect capability gaps, not resistance. Most MSME and private-company partners aren't avoiding disclosure out of reluctance — they simply don't have the systems yet. Build extra time into your data-collection timeline to account for this, rather than assuming non-response means non-cooperation.

3. Invest in enablement, not just data requests. A generic email asking for "ESG data" will get you inconsistent, low-quality responses that are hard to aggregate or defend under assurance. Structured templates, simple guidance notes, and short capacity-building sessions for your key partners go much further than a one-line ask.

4. Document your coverage. If you report value chain ESG data, you're required to disclose what percentage of total purchases and sales that reporting actually covers. Partial coverage isn't a compliance failure — but it does need to be transparent, not buried.

Turning Friction Into a Repeatable Process

The companies that get ahead of this treat it as a relationship-building exercise, not a compliance checkbox. Four practices consistently make the difference:

• Capacity-building workshops - training suppliers on what ESG data to track and how to track it, rather than assuming they already know.

• A supplier code of conduct - setting clear ESG expectations as a condition of doing business, so data requests aren't a surprise later.

• Ongoing engagement - continuous dialogue with key partners rather than a single annual ask that lands with no context.

• Third-party sustainability assessments - independent collection verification that builds credibility into the data before assurance requirements even apply.

The result of doing this well isn't just a cleaner BRSR Core disclosure — it's data your stakeholders, investors, and eventually your assurance provider can actually trust.

The Value Chain Partner POV

For MSMEs and private companies reading this from the other side of the table: if you're a significant supplier or buyer to a listed company, you may be asked for ESG data well before you expected to be — even though you've never filed a disclosure, and even though the requirement on your listed counterpart is technically voluntary. "We don't track that" becomes a weak answer when a major customer relationship is on the line.

Voluntary today. Increasingly expected tomorrow. The companies and partners who start building capability now, rather than scrambling once the mandate tightens, will be the ones who handle this as routine.

This is Post 3 of our BRSR series, breaking down compliance one topic at a time. Esgity Advisors works with listed companies, private equity funds and their value chain partners on BRSR compliance and assurance, ESG reporting, and supplier capacity-building programs. Get in touch to discuss how we can help your organization prepare: info@esgityadvisors.com.