Sustainability & Environment (Agri-Food Systems) · Sustainability Assessment, Carbon & Governance · also ESG Reporting, Corporate Sustainability Reporting, Non-financial Reporting, Climate and Nature-related Disclosure
How companies report sustainability information and how investors use it: materiality, GRI, ISSB IFRS S1 and S2, the EU CSRD and ESRS, TCFD and TNFD recommendations, national regimes such as India's BRSR, assurance and greenwashing. The versions in force change often; the manual names the version it describes.
In the exams: GARP SCR; CFA Institute Sustainable Investing Certificate; GRI certified training; SEA/SEP (GBCI); corporate sustainability roles
Companies are now expected to report on their environmental, social and governance performance with nearly the same rigour as their finances. Investors want to know how climate change, water scarcity, deforestation rules and labour risks will affect value; regulators want comparable, verified data; and society wants to know what companies do to people and the planet. Sustainability reporting has moved in a decade from glossy voluntary brochures to mandatory, standardised and assured disclosure in many of the world's largest economies.
This subject explains the purpose and history of sustainability reporting; single and double materiality; the GRI Standards, including the agriculture sector standard; the ISSB's IFRS S1 and S2; the TCFD's four pillars; the EU's CSRD, ESRS and taxonomy; the TNFD and its LEAP approach for nature; disclosure topics specific to agriculture and food; national regimes such as India's BRSR; ESG ratings and data providers; assurance; and greenwashing and green claims regulation. Greenhouse gas accounting is taught in carbon-accounting-ghg-inventories, product footprints in life-cycle-assessment, project assessment in environmental-impact-assessment and management systems in environmental-management-systems; this subject refers to them rather than repeating them.
The field changes fast. The manual describes GRI Universal Standards 2021 and GRI 13 (2022), IFRS S1 and S2 (2023, with 2025 amendments noted), the first set of ESRS (2023) and the EU's 2025 'stop-the-clock' and simplification proposals as they stood when written, SEBI's BRSR and BRSR Core circulars of 2021 and 2023, and ISSA 5000 (2024). It serves the GARP Sustainability and Climate Risk certificate, the CFA Institute Sustainable Investing Certificate, GRI certified training, the IFRS Fundamentals of Sustainability Accounting credential, GBCI's SEA and SEP, and practitioners in corporate sustainability, finance and assurance. Readers should always confirm the version in force.
Sustainability reporting is the disclosure by an organisation of information about its environmental, social and governance (ESG) performance, impacts, risks and opportunities. Two audiences and two purposes run through its history. One is accountability to society: communities, workers, civil society and governments want to know how a company affects people and the planet. The other is information for capital markets: investors and lenders want to know how sustainability issues affect a company's cash flows, risks and value. 'ESG' is the investment community's shorthand for the second view; 'sustainability' or 'corporate responsibility' reporting historically served the first. Since about 2020 the field has moved rapidly from voluntary, varied reports towards mandatory, standardised disclosure audited like financial statements, and the two views have been combined in some regimes (double materiality, chapter 2) and kept separate in others.
Early environmental reports appeared in the late 1980s and early 1990s, often after industrial disasters damaged public trust. The Coalition for Environmentally Responsible Economies (Ceres), formed in 1989 after the Exxon Valdez oil spill, co-founded the Global Reporting Initiative (GRI) in 1997 with the Tellus Institute; GRI published its first guidelines in 2000 and moved from guidelines (G1–G4) to standards in 2016. Elkington's 'triple bottom line' (1994) popularised reporting on people, planet and profit. Other frameworks followed for specific purposes: the Carbon Disclosure Project (now CDP) questionnaires from 2000; the Greenhouse Gas Protocol corporate standard in 2001 (see carbon-accounting-ghg-inventories); the UN Global Compact (2000) with annual communications on progress; the International Integrated Reporting Council's framework (2013) with its six capitals (financial, manufactured, intellectual, human, social and relationship, natural); the Sustainability Accounting Standards Board (SASB) industry standards (2018) focused on financially material topics; and the Task Force on Climate-related Financial Disclosures (TCFD, 2017). The proliferation — the 'alphabet soup' — created confusion and comparability problems.
From 2021 the landscape consolidated. The IFRS Foundation, which sets international financial reporting standards, created the International Sustainability Standards Board (ISSB), announced at the COP26 climate conference in November 2021, and absorbed the Climate Disclosure Standards Board and the Value Reporting Foundation (the merged SASB and integrated reporting bodies). The ISSB issued IFRS S1 and IFRS S2 in June 2023 (chapter 4), and many jurisdictions have since moved to adopt or align with them. The European Union, which had required non-financial statements from large public-interest companies under the Non-Financial Reporting Directive (2014), adopted the Corporate Sustainability Reporting Directive (CSRD) in 2022 with European Sustainability Reporting Standards (ESRS, chapter 6). National regimes such as India's Business Responsibility and Sustainability Report (chapter 9) and mandatory climate reporting in the United Kingdom, Japan, Australia, Singapore, China and other countries spread at the same time, while in the United States federal rules stalled and state laws (notably in California) advanced. GRI, focused on impacts, continues alongside the ISSB, and the two have agreed to coordinate. Because versions and dates change rapidly, every statement about a regime should be checked against its current text.
Materiality decides which information belongs in a report. Under financial materiality — the 'outside-in' perspective used by the ISSB and SASB — sustainability information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions of primary users of general purpose financial reports (existing and potential investors, lenders and other creditors). The focus is on sustainability-related risks and opportunities that could reasonably be expected to affect the entity's cash flows, access to finance or cost of capital over the short, medium or long term. For a food company, drought affecting crop supply, carbon pricing on fertiliser, regulatory limits on deforestation-linked sourcing and changing consumer demand are examples of financially material matters.
Impact materiality — the 'inside-out' perspective used by GRI — makes a topic material if it relates to the organisation's most significant actual or potential impacts on the economy, environment and people, including impacts on human rights, whether or not those impacts affect the company financially. Pesticide exposure of farm workers in the supply chain, water depletion in a stressed basin, or deforestation caused by sourcing are impact-material even if the company's profits are not at risk. Double materiality, the basis of the EU's ESRS, requires a company to report a topic if it is material from either perspective, or both: impact materiality (actual and potential, positive and negative impacts across its own operations and value chain, assessed by severity — scale, scope and irremediable character — and, for potential impacts, likelihood) and financial materiality (risks and opportunities that affect or could affect the company's financial position, performance, cash flows, access to finance or cost of capital). The two are connected: an impact today often becomes a financial risk later through regulation, litigation, reputation or resource scarcity, an idea called dynamic materiality.
A materiality assessment typically proceeds in steps: understand the context (business model, value chain, sector and geography); identify a long list of potential topics, using sector standards (GRI sector standards, SASB industry standards, ESRS topics) and stakeholder input; assess each for impact severity and likelihood and for financial magnitude and likelihood, with evidence and engagement of affected stakeholders and experts; set thresholds; validate the results with management and, where required, the board; and document the process, because auditors and regulators will examine it. Materiality matrices plotting importance to stakeholders against importance to the business were popular but have been criticised for being subjective and unclear about what is measured; double materiality assessments replace them with explicit scoring of impacts and financial effects. A simple scoring example: if impact severity is scored on 1–5 for scale, scope and irremediability and averaged, and likelihood is 0–1, a potential impact with scores 4, 5 and 3 and likelihood 0.5 has an impact score of 4.0 × 0.5 = 2.0, to be compared with the company's stated threshold.
The GRI Standards are the most widely used standards for reporting an organisation's impacts. Since the 2021 revision of the Universal Standards, effective for reports published from 1 January 2023, the system has three series. The Universal Standards apply to all organisations: GRI 1 Foundation (requirements and reporting principles), GRI 2 General Disclosures (organisational details, activities and workers, governance, strategy, policies and practices, stakeholder engagement) and GRI 3 Material Topics (the process to determine material topics and how to report on their management). Sector Standards set out the likely material topics for specific sectors: GRI 11 Oil and Gas (2021), GRI 12 Coal (2022), GRI 13 Agriculture, Aquaculture and Fishing (2022) and GRI 14 Mining (2024), with more planned. Topic Standards contain disclosures on specific topics — economic (200 series), environmental (300 series, such as energy, water and effluents, emissions, waste) and social (400 series, such as occupational health and safety, child labour, local communities); newer topic standards on biodiversity (GRI 101, 2024) and on climate change and energy (2025) are replacing older environmental ones on a phased timetable.
GRI 1 sets reporting principles for the quality of information: accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness and verifiability. An organisation may report 'in accordance with' the GRI Standards, which requires it to apply all nine requirements of GRI 1 — including reporting all disclosures in GRI 2, determining material topics under GRI 3, reporting the relevant topic disclosures for each material topic (or giving reasons for omission), publishing a GRI content index and notifying GRI — or 'with reference to' the Standards, a lighter claim for organisations reporting only some information. GRI requires organisations to explain how they manage each material topic: policies, commitments, actions, goals, targets, effectiveness tracking and stakeholder engagement. GRI does not require external assurance, but recommends it and asks organisations to describe their assurance practice.
GRI 13 identifies more than twenty likely material topics for organisations engaged in crop cultivation, animal production, aquaculture and fishing, whether as producers or as buyers whose supply chains include them. Environmental topics include emissions, climate adaptation and resilience, biodiversity, natural ecosystem conversion, soil health, pesticides use, waste, and water and effluents. Social and economic topics include animal health and welfare, economic inclusion, local communities, land and resource rights, rights of indigenous peoples, non-discrimination and equal opportunity, forced or compulsory labour, child labour, freedom of association and collective bargaining, occupational health and safety, employment practices, living income and living wage, food security, food safety, supply chain traceability, public policy, anti-competitive behaviour and anti-corruption. For each topic, the sector standard lists the topic standard disclosures to report and additional sector recommendations, such as the percentage of production volume from land converted after a cut-off date, or the share of sourced volume traceable to the farm level.
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information requires an entity to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect its cash flows, access to finance or cost of capital over the short, medium or long term. It adopts the four-pillar structure of the TCFD — governance, strategy, risk management, and metrics and targets — for every such risk or opportunity. S1 requires the information to be reported for the same reporting entity and period as the financial statements, published at the same time, with connected information explaining links between sustainability and financial information. To identify risks and opportunities and the disclosures to provide, an entity must refer to the SASB industry-based standards and consider other sources such as the CDSB framework application guidance, GRI and ESRS where they help meet investors' needs. S1 includes fair presentation, materiality judged from the perspective of primary users, and requirements on estimates, errors and comparatives.
IFRS S2 Climate-related Disclosures applies the S1 structure to climate. Governance disclosures describe board and management oversight of climate risks and opportunities. Strategy disclosures cover the climate-related physical risks (acute events such as floods and heat waves; chronic shifts such as rising temperatures and changing rainfall) and transition risks (policy, legal, technology, market and reputation) the entity faces, their current and anticipated effects on its business model, value chain, strategy and financial position, any transition plan, and the entity's climate resilience assessed using climate-related scenario analysis proportionate to its circumstances. Risk management disclosures describe processes to identify, assess, prioritise and monitor climate risks and their integration into overall risk management. Metrics include cross-industry metrics — absolute gross Scope 1, Scope 2 and Scope 3 greenhouse gas emissions measured with the GHG Protocol Corporate Standard (see carbon-accounting-ghg-inventories), the amount and percentage of assets or business activities vulnerable to transition and physical risks or aligned with opportunities, capital deployment, internal carbon prices and the share of executive remuneration linked to climate — plus industry-based metrics drawn from the SASB-derived guidance, and any targets with their progress. Financial institutions must disclose financed emissions.
IFRS S1 and S2 are effective for annual periods beginning on or after 1 January 2024, but they apply only where a jurisdiction or the entity adopts them. Transition reliefs allow, in the first year, reporting on climate only ('climate first'), omitting Scope 3 emissions, not providing comparatives, using measurement approaches other than the GHG Protocol if previously used, and publishing the sustainability report after the financial statements. In 2025 the ISSB proposed targeted amendments to S2 easing aspects of Scope 3 category 15 (financed emissions) and other requirements. Jurisdictions are adopting the standards in different ways: some fully, some with modifications, some phased by company size; Australia, Japan, Singapore, Hong Kong, Brazil, Nigeria, Turkey, the United Kingdom and others have adopted or announced aligned standards, while the EU's ESRS were designed to be highly interoperable with them. The ISSB has also researched nature-related disclosures and human capital, building on the TNFD (chapter 7).
The Task Force on Climate-related Financial Disclosures was set up by the Financial Stability Board in 2015 and published its recommendations in June 2017. It argued that climate change poses financial risks that markets were not pricing, and proposed disclosures in mainstream financial filings around four pillars, with eleven recommended disclosures. Governance: describe the board's oversight of climate-related risks and opportunities, and management's role in assessing and managing them. Strategy: describe the climate-related risks and opportunities identified over the short, medium and long term; their impact on the organisation's businesses, strategy and financial planning; and the resilience of the strategy under different climate scenarios, including a 2 °C or lower scenario. Risk management: describe processes for identifying and assessing climate risks, processes for managing them, and how they are integrated into overall risk management. Metrics and targets: disclose the metrics used to assess climate risks and opportunities, Scope 1, Scope 2 and, if appropriate, Scope 3 emissions and related risks, and the targets used and performance against them.
The TCFD classified climate risks as transition risks — policy and legal (carbon pricing, emissions rules, litigation), technology (substitution by lower-emission options), market (shifts in demand and input prices) and reputation — and physical risks — acute (more severe extreme events such as cyclones, floods and droughts) and chronic (longer-term shifts in temperature, rainfall, sea level). Opportunities include resource efficiency, energy sources, products and services, markets and resilience. Scenario analysis tests a strategy against plausible futures, such as a rapid transition consistent with limiting warming to 1.5–2 °C (high transition risk, lower physical risk) and a high-emissions pathway (low transition risk, high physical risk); scenarios from the IPCC, the International Energy Agency and the Network for Greening the Financial System are commonly used (see climate-models-scenarios). For agri-food companies, physical risks include yield losses and supply disruption from heat, drought and floods in sourcing regions; transition risks include methane and nitrogen regulation, deforestation rules, carbon pricing on fertiliser and energy, and shifts in protein demand.
After issuing status reports every year, the TCFD was disbanded in October 2023, its work having been absorbed into IFRS S2, and the IFRS Foundation took over monitoring of climate disclosures. Its four pillars survive in the ISSB standards, ESRS, TNFD and many national rules, so understanding them remains essential. TCFD guidance for asset managers and owners introduced the weighted average carbon intensity (WACI) — the portfolio-weighted sum of each company's Scope 1 and 2 emissions divided by its revenue — as a portfolio metric. For a portfolio 60 % invested in a company emitting 12000 t CO2-eq on revenue of 400 million and 40 % in one emitting 3000 t on revenue of 150 million, WACI = 0.6 × 30 + 0.4 × 20 = 26.0 t CO2-eq per million of revenue. Banks measure financed emissions with the Partnership for Carbon Accounting Financials (PCAF) method, attributing a borrower's emissions in proportion to the loan's share of the borrower's enterprise value including cash or total equity plus debt: a loan of 20 million to a company with enterprise value of 200 million and emissions of 50000 t attributes 5000 t to the bank.
The CSRD (Directive (EU) 2022/2464) replaced the Non-Financial Reporting Directive, which since 2018 had required large public-interest entities with more than 500 employees to publish a non-financial statement. The CSRD requires in-scope companies to report under European Sustainability Reporting Standards in a dedicated section of the management report, with digital tagging, subject to limited assurance by a statutory auditor or independent assurance provider, with a possible later move to reasonable assurance. It applies to EU companies and, through a separate threshold, to non-EU groups with large EU turnover. As adopted, it phased in: companies previously under the NFRD reported for financial year 2024 (first reports in 2025); other large companies from 2025; listed small and medium-sized companies from 2026; and qualifying non-EU groups from 2028. In 2025 the EU adopted a 'stop-the-clock' directive postponing the second and third waves by two years and launched an omnibus simplification proposal that would sharply reduce the number of companies in scope and the number of data points; readers must check the outcome of these changes, which were still being finalised.
The first set of ESRS, adopted by delegated regulation in July 2023 on the technical advice of the European Financial Reporting Advisory Group (EFRAG), contains twelve standards. Two are cross-cutting: ESRS 1 General Requirements (including double materiality, value chain, time horizons and the structure of statements) and ESRS 2 General Disclosures (governance, strategy, impact, risk and opportunity management, metrics and targets, and the disclosure of the materiality assessment process). Ten are topical: five environmental — E1 Climate Change, E2 Pollution, E3 Water and Marine Resources, E4 Biodiversity and Ecosystems, E5 Resource Use and Circular Economy; four social — S1 Own Workforce, S2 Workers in the Value Chain, S3 Affected Communities, S4 Consumers and End-users; and one on governance — G1 Business Conduct. ESRS 2 disclosures are mandatory for all in-scope companies; topical disclosures are reported when material under the double materiality assessment, with E1 climate requiring an explanation if judged not material. E1 requires a transition plan for climate change mitigation (if adopted), Scope 1, 2 and 3 and total emissions, removals and carbon credits, internal carbon pricing and anticipated financial effects. Simplified ESRS with far fewer data points were being prepared by EFRAG in 2025.
The CSRD sits within the EU's sustainable finance framework. The EU Taxonomy Regulation (2020/852) defines environmentally sustainable economic activities against six objectives — climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. An activity is taxonomy-aligned if it makes a substantial contribution to at least one objective according to technical screening criteria, does no significant harm (DNSH) to the others and meets minimum social safeguards. Companies under the CSRD disclose the proportion of turnover, capital expenditure and operating expenditure that is taxonomy-eligible and taxonomy-aligned: aligned turnover of 180 million out of 600 million is 30 %. Agriculture has few adopted technical screening criteria. The Sustainable Finance Disclosure Regulation (SFDR, 2019/2088) requires financial market participants to disclose how they integrate sustainability risks and principal adverse impacts, and classifies funds that promote environmental or social characteristics (Article 8) or have sustainable investment as their objective (Article 9). The Corporate Sustainability Due Diligence Directive (2024) requires large companies to identify and address adverse human rights and environmental impacts in their chains, and was also subject to the 2025 simplification proposals.
Nature loss — the decline of ecosystems, species, soils and freshwater — creates risks for businesses that depend on ecosystem services such as pollination, water supply, soil fertility and flood regulation, and companies also drive nature loss through land-use change, pollution, resource extraction and invasive species. Agriculture and food are among the most nature-dependent and nature-impacting sectors. The Taskforce on Nature-related Financial Disclosures (TNFD), launched in 2021 by UN bodies, governments and private institutions, published its final recommendations in September 2023. They were designed to align with the TCFD and ISSB architecture and with the Kunming-Montreal Global Biodiversity Framework, whose target 15 calls on governments to encourage and enable businesses to monitor, assess and disclose their risks, dependencies and impacts on biodiversity.
The TNFD has fourteen recommended disclosures under the same four pillars as the TCFD — governance, strategy, risk and impact management, and metrics and targets — with additions reflecting nature: disclosure of the engagement of indigenous peoples, local communities and affected stakeholders; the locations of assets and activities in priority areas (ecologically sensitive locations, areas of high biodiversity importance, high ecosystem integrity, rapid decline in integrity, high physical water risk, or importance for ecosystem service provision to indigenous peoples and communities); and the management of dependencies and impacts as well as risks. General requirements include the application of materiality (the TNFD allows either the ISSB's financial materiality or double materiality), the scope of the assessment, location-specificity, integration with other sustainability disclosures, time horizons and engagement. Core global metrics cover drivers of nature change — land, freshwater and ocean use change, pollution, resource use and invasive species — as well as the state of nature.
To help organisations assess nature-related issues, the TNFD developed the LEAP approach. Locate the interface with nature: identify where the organisation's direct operations and value chain interact with nature, and which locations are in sensitive or priority areas. Evaluate dependencies and impacts: identify the environmental assets and ecosystem services the business depends on and the impact drivers it causes, and assess their scale and severity. Assess risks and opportunities: translate dependencies and impacts into physical, transition and systemic risks and into opportunities, and prioritise them. Prepare to respond and report: decide strategy and resource allocation, set targets, and disclose in line with the recommendations. For an agri-food company, LEAP typically starts by mapping sourcing regions for high-risk commodities against biodiversity, water stress and deforestation data, then evaluating dependencies (pollinators, water, soil) and impacts (land conversion, pesticide and nutrient pollution), then assessing risks such as supply loss and regulation (for example the EU Deforestation Regulation), and finally preparing targets such as deforestation- and conversion-free sourcing. The Science Based Targets Network provides methods for setting science-based targets for nature, starting with freshwater and land.
Agri-food companies — input suppliers, growers, traders, processors, retailers and restaurants — have most of their environmental and social footprint in their supply chains, often on millions of farms they do not own. Their Scope 3 emissions typically dwarf Scope 1 and 2, with purchased goods (category 1) dominant; land use and land-use change, enteric methane, manure and fertiliser nitrous oxide are the main sources. The GHG Protocol's land sector and removals guidance and the Science Based Targets initiative's Forest, Land and Agriculture (FLAG) guidance (2022) require companies with significant land-related emissions to set separate FLAG targets and commit to no deforestation (see carbon-accounting-ghg-inventories and agricultural-ghg-mitigation). Disclosure therefore depends on traceability and supplier data, and estimates based on average emission factors are common, which limits the ability to show progress from farm-level change.
Sector frameworks converge on a common set of topics. SASB industry standards for agricultural products, meat, poultry and dairy, processed foods, food retailers and distributors, and restaurants include GHG emissions, energy management, water management, land use and ecological impacts, food safety, health and nutrition, product labelling, packaging lifecycle, animal care and welfare, environmental and social impacts of the supply chain, and ingredient sourcing. GRI 13 (chapter 3) adds natural ecosystem conversion, soil health, pesticides use, land and resource rights, living income and living wage, food security and traceability. ESRS topics most relevant to agri-food are E1 climate, E2 pollution (nutrients, pesticides), E3 water, E4 biodiversity, E5 resource use (packaging, food loss), S2 value-chain workers and S3 affected communities. Commonly disclosed metrics include Scope 1–3 and FLAG emissions; percentage of high-risk commodities (palm oil, soy, beef, cocoa, coffee, wood) verified deforestation- and conversion-free; share of sourced volume traceable to mill, plantation or farm; water withdrawal in water-stressed areas; share of volume certified to credible standards; food loss and waste per tonne of product (see sustainable-food-systems); packaging recyclability and recycled content; animal welfare policies and outcomes; and the share of suppliers paid a living income reference price.
Three problems recur. First, traceability: commodities pass through intermediaries, mills and traders, and indirect suppliers (for example cattle moving between ranches before slaughter) are hard to track; satellite monitoring and geolocation required by deforestation rules are improving this. Second, data quality: supplier-specific primary data are scarce, so Scope 3 inventories rely on secondary emission factors that do not reflect actual farm practices, and companies may struggle to show the effect of regenerative or low-emission farming programmes; insetting and supply-chain carbon claims raise questions about double counting and permanence. Third, smallholder realities: social topics such as child labour, living income and land rights in smallholder chains require field-level evidence, credible audits and remediation systems, not just policies. Good reports explain methods, data sources and uncertainty, separate actual supply-chain progress from changes in emission factors, and disclose limitations honestly.
India's market regulator, the Securities and Exchange Board of India (SEBI), required the top 100 listed companies by market capitalisation to publish a Business Responsibility Report (BRR) from 2012, later extended to the top 1000. In May 2021 SEBI introduced the Business Responsibility and Sustainability Report (BRSR), mandatory for the top 1000 listed companies by market capitalisation from financial year 2022–23 (voluntary for 2021–22). The BRSR is structured around the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC, 2019) issued by the Ministry of Corporate Affairs — covering ethics and transparency, sustainable and safe goods and services, employee well-being, stakeholder responsiveness, human rights, environmental protection, responsible public policy advocacy, inclusive growth and consumer value. It has three sections: Section A general disclosures; Section B management and process disclosures; and Section C principle-wise performance disclosures, divided into essential indicators (mandatory) and leadership indicators (voluntary). In July 2023 SEBI introduced BRSR Core, a subset of key performance indicators — including greenhouse gas emissions, water, energy, waste, employee well-being, gender diversity, inclusive development, customer fairness and openness of business — subject to reasonable assurance on a glide path beginning with the top 150 listed companies, together with value-chain disclosures for top companies on a phased, comply-or-explain basis; the timelines were later adjusted, so the current SEBI circulars must be checked.
BRSR asks for quantitative metrics with intensity ratios, including energy and water intensity per rupee of turnover (with an additional figure adjusted for purchasing power parity for global comparability), Scope 1 and 2 emissions and their intensity, waste generated and recovered by category, water withdrawal and discharge by source and treatment level, and, for leadership indicators, Scope 3 emissions and life cycle assessments of products. Social metrics cover employee benefits, wages, retirement benefits, safety incidents, complaints, accessibility, human rights training and grievance mechanisms, CSR projects and their beneficiaries. For agribusiness and food companies, relevant BRSR items include sustainable sourcing (percentage of inputs sourced sustainably and from small producers), water use in water-stressed areas, product stewardship and reclaimed packaging under extended producer responsibility, and engagement with farmer communities. Intensity per rupee of turnover is computed as total consumption divided by revenue: 4.5 million GJ of energy on turnover of ₹3000 crore (₹30 billion) is 0.00015 GJ per rupee, or 150 GJ per crore of turnover.
Other jurisdictions have built regimes on the ISSB baseline or their own frameworks. The United Kingdom required TCFD-aligned climate disclosures from premium-listed companies and large companies from 2021–22 and has developed UK Sustainability Reporting Standards based on IFRS S1 and S2. Japan's Sustainability Standards Board issued ISSB-based standards in 2025, to be required for large listed companies in phases. Australia made climate-related financial disclosure mandatory for large entities from financial years beginning 1 January 2025, through standards based on IFRS S2. China's stock exchanges issued sustainability reporting guidelines in 2024 for major listed companies, and its Ministry of Finance is developing national standards. Singapore, Hong Kong, Brazil and others have adopted or announced ISSB-aligned climate reporting. In the United States, the Securities and Exchange Commission adopted a climate disclosure rule in March 2024 but stayed it under legal challenge and in 2025 stopped defending it, while California enacted laws in 2023 requiring large companies doing business in the state to disclose Scope 1, 2 and 3 emissions and climate-related financial risks, with first reports from 2026. National regimes therefore differ in scope, materiality basis, assurance and timing; multinational agri-food companies must map overlapping requirements.
ESG ratings are opinions, produced by commercial and non-profit providers, that assess a company's exposure to and management of ESG risks or its ESG performance and impacts, usually expressed as a score, letter grade or rank relative to industry peers. Providers collect company disclosures, regulatory filings, news, NGO reports and their own questionnaires, map them to indicators, weight indicators by industry, and aggregate them. Some ratings measure financial risk to the company from ESG issues ('risk' ratings); others measure the company's impact or alignment with sustainability ('impact' ratings); some focus on controversies. Investors use ratings for screening, index construction, portfolio tilting, engagement and reporting under rules such as the SFDR; companies use them in investor relations and executive pay; and lenders use them in sustainability-linked loans.
Ratings for the same company often disagree. A widely cited study by Berg, Kölbel and Rigobon (2022), 'Aggregate Confusion', found correlations between six major providers' ratings averaging around 0.54, far below the near-perfect agreement of credit ratings. They decomposed the divergence into differences in scope (which attributes are included), measurement (how the same attribute is measured) and weight (how much each attribute counts), and found measurement divergence to be the largest contributor; they also identified a 'rater effect' in which a provider's view of a company in one category influences its other scores. Other issues include size and disclosure bias (larger companies that publish more data tend to score better), the use of industry-relative scoring (an oil company can score highly within its sector), lack of transparency about methods, and conflicts of interest when providers also sell consulting services to rated companies. Divergence means that the choice of provider affects which companies are in a sustainable index or fund, and that ratings should be interpreted with knowledge of what they measure.
Regulators have responded. India's SEBI introduced a regulatory framework for ESG rating providers in 2023, requiring registration and disclosure of methodologies. The EU adopted a regulation on the transparency and integrity of ESG rating activities in 2024, requiring providers operating in the EU to be authorised and supervised by the European Securities and Markets Authority, to disclose methodologies and to separate rating from certain other activities, applying from mid-2026. The International Organization of Securities Commissions (IOSCO) had published recommendations in 2021. For users, good practice is to understand each rating's objective (risk or impact), scope, data sources and weighting; to compare ratings with underlying data, such as emissions and controversies; to combine ratings with one's own analysis; and to avoid treating a single score as a complete picture of a company's sustainability. A weighted score is easily calculated, which also shows its sensitivity: with pillar scores E = 60, S = 70 and G = 80 and weights 0.5, 0.3 and 0.2, the overall score is 67; changing the weights to equal thirds gives 70.
Assurance is an independent practitioner's engagement to express a conclusion that increases the confidence of intended users in sustainability information. As reporting becomes mandatory and used in investment decisions, assurance moves from optional to required. Two levels are distinguished. Reasonable assurance is a high but not absolute level of assurance, similar to a financial statement audit, expressed as a positive opinion that the information is prepared, in all material respects, in accordance with the criteria. Limited assurance involves less extensive procedures — mainly inquiries and analytical procedures — and is expressed in negative form: nothing has come to the practitioner's attention that causes them to believe the information is materially misstated. The EU CSRD began with limited assurance; India's BRSR Core requires reasonable assurance of specified indicators on a glide path; California's emissions law phases from limited to reasonable assurance for Scope 1 and 2.
Assurance engagements have been conducted mainly under the International Standard on Assurance Engagements ISAE 3000 (Revised), for assurance engagements other than audits or reviews of historical financial information, and ISAE 3410 for greenhouse gas statements, both issued by the International Auditing and Assurance Standards Board (IAASB); under AccountAbility's AA1000 Assurance Standard (v3, 2020), which assesses adherence to principles of inclusivity, materiality, responsiveness and impact; and, for GHG statements, ISO 14064-3 (see carbon-accounting-ghg-inventories). In November 2024 the IAASB issued International Standard on Sustainability Assurance (ISSA) 5000, a profession-agnostic standard for limited and reasonable assurance of sustainability information under any framework, effective for periods beginning on or after 15 December 2026; the International Ethics Standards Board for Accountants issued matching ethics and independence standards for sustainability assurance. Providers include audit firms and specialist certification and engineering firms; some jurisdictions allow only statutory auditors, others accredited independent providers.
An engagement includes accepting the engagement (assessing preconditions such as suitable criteria and the practitioner's competence and independence), planning (understanding the entity, its reporting process and controls, determining materiality and assessing risks of material misstatement), performing procedures (inquiries, analytical review, recalculation, inspection of documents, site visits, testing of data from source to report, review of estimates and assumptions), evaluating misstatements against materiality, and reporting. Sustainability information poses particular challenges: estimates and forward-looking statements (transition plans, scenario analysis) that cannot be verified like historical data; value-chain information outside the company's control, such as Scope 3 and supplier labour data; immature internal controls and data systems; qualitative narrative claims; and the need for subject-matter experts (on emissions factors, water, biodiversity). Common findings include incomplete boundaries, spreadsheet errors, unsupported emission factors, inconsistent definitions between years and between sites, and narrative claims that overstate progress. Companies preparing for assurance should build controls over sustainability data comparable to those over financial data.
Greenwashing is the practice of making misleading claims about the environmental (or more broadly sustainability) credentials of a company, product, fund or service, giving a false impression of environmental benefit. Forms include vague claims ('eco-friendly', 'natural', 'green') without substantiation; hidden trade-offs (highlighting one attribute while ignoring larger impacts); claims without proof; irrelevant claims (stating compliance with a legal requirement as if it were a distinction); misleading imagery and labels; selective disclosure of good data; carbon-neutral or net-zero claims that rely on low-quality offsets; inflated sustainable fund labels; and future pledges without credible plans. Related failures are 'greenhushing' — companies saying little about genuine efforts to avoid scrutiny — and 'social washing' on labour or community claims. In agri-food, common risk areas include 'regenerative', 'natural', 'deforestation-free', 'carbon neutral' and 'sustainably sourced' claims, plant-based and animal welfare claims, and recyclable or compostable packaging claims.
Regulators act through consumer protection, competition, advertising and financial services law. In the EU, the Unfair Commercial Practices Directive has long prohibited misleading claims; the 2024 directive on empowering consumers for the green transition, applying from September 2026, bans generic environmental claims without recognised excellent environmental performance, sustainability labels not based on a certification scheme or established by public authorities, claims that a product has a neutral, reduced or positive environmental impact based on greenhouse gas offsetting, and claims about the whole product when they concern only part of it; a proposed Green Claims Directive requiring prior substantiation and verification of explicit claims faced an uncertain future in 2025. The United Kingdom's Competition and Markets Authority published a Green Claims Code (2021), and the Financial Conduct Authority introduced an anti-greenwashing rule for regulated firms (2024) and sustainability labels for funds. The US Federal Trade Commission's Green Guides (last revised in 2012) guide environmental marketing claims. India's Central Consumer Protection Authority issued guidelines for the prevention and regulation of greenwashing or misleading environmental claims in 2024, requiring substantiation and disclosure of the basis of claims. Courts and advertising authorities in several countries have found airline, energy, food and fashion advertisements misleading.
For companies, the safeguards are: make claims specific, accurate and substantiated with evidence available on request; cover the whole life cycle or clearly state the scope; avoid comparisons without a fair basis; base product footprint claims on recognised methods (see life-cycle-assessment) and carbon-neutral claims on emission reductions rather than offsets alone; use credible, independently verified certification for labels (see environmental-management-systems); align marketing claims with what the sustainability report and assurance support; and set targets with credible transition plans, interim milestones and disclosure of progress. For investors and analysts, signs of greenwashing include large gaps between claims and capital expenditure, targets without plans, heavy reliance on offsets, selective metrics, missing Scope 3 for supply-chain-heavy businesses, and unexplained changes in methods or baselines. As reporting becomes regulated and assured, misleading sustainability statements in reports and prospectuses also expose companies and directors to securities litigation, so the boundary between marketing claims and financial disclosure is narrowing.
A student should be able to trace the history from voluntary reports to ISSB and CSRD, define single, impact and double materiality, describe the GRI architecture and the 'in accordance with' claim, list the TCFD pillars and their eleven disclosures in outline, explain IFRS S1 and S2 requirements and reliefs, name the twelve ESRS and the six taxonomy objectives, describe TNFD's LEAP steps, outline BRSR sections and BRSR Core, explain causes of ESG rating divergence, distinguish limited from reasonable assurance, and give examples of greenwashing and its regulation. Numerical skills include intensity ratios, taxonomy alignment percentages, weighted ESG scores, WACI and PCAF attribution.
A sustainability reporting manager in an agri-food company runs the double materiality assessment, maps disclosures across GRI, ISSB, ESRS and BRSR, builds data collection from sites and suppliers, calculates emissions and intensities with the carbon team, drafts narrative on governance, strategy and risks, and prepares for assurance by documenting methods and controls. An ESG analyst at an investor or bank uses disclosures and ratings to assess companies, calculates portfolio metrics, engages companies on gaps and checks fund labels against regulation. Both must keep up with rapidly changing rules and avoid statements that overstate progress.
A chief sustainability officer, chief financial officer, audit committee chair or head of ESG at an investor decides how the organisation responds to mandatory reporting: governance of sustainability information, investment in data systems and controls, choice of assurance provider, transition plans and targets that will be scrutinised, and alignment of marketing claims with reported data. They manage regulatory and litigation risk across jurisdictions, explain trade-offs to boards and investors, and decide when to engage with standard-setters and regulators on proposals. They also judge when a target or claim should be withdrawn or restated.
A professor or principal researcher studies whether disclosure changes corporate behaviour and capital allocation, the causes and consequences of ESG rating divergence, the quality and assurance of sustainability information, double versus financial materiality, nature-related metrics, and the political economy of standard-setting. They contribute to consultations by ISSB, EFRAG, SEBI and others, build datasets on agri-food supply-chain disclosures, supervise doctoral research and set examinations that test conceptual understanding of materiality and evidence rather than recall of acronyms. Much of their empirical work relies on hand-collected disclosures because standardised data are new.
This manual describes frameworks as they stood in 2025–26; the EU omnibus simplification of CSRD, ESRS, taxonomy and CSDDD, revised ESRS, ISSB amendments, SEBI's adjustments to BRSR Core timelines and national adoption of ISSB standards were all changing, and US federal climate disclosure was abandoned after this period began. Thresholds and dates must be checked in current texts. It does not reproduce SASB industry standards, ESRS data points or BRSR formats in detail, nor cover integrated reporting, human capital disclosure, sustainable finance products (green bonds, sustainability-linked loans) or ESG investment strategies beyond what reporting requires. Rating providers are not named.
Original practice questions written to the syllabus and pattern of the exams named in each question's examTags. They are not past papers and do not reproduce any board's questions. Every numerical answer was computed in a script. Frameworks change often; questions describe GRI 2021/2022, IFRS S1 and S2 (2023), ESRS set 1 (2023), SEBI's BRSR (2021) and BRSR Core (2023) and later developments as stated in the manual.
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