It’s April 2026, and if you’re running a business in India right now, the ESG compliance picture looks very different from what it did even six months ago. The top 250 listed companies have just wrapped up their first year of BRSR Core with mandatory third-party assurance. The Indian Carbon Market has its compliance architecture fully notified across seven industrial sectors. And Indian steel and aluminium exporters are already writing CBAM cheques to the European Union.
This isn’t the 2025 I wrote about last November. A lot has shifted in five months, and some of it in ways most Indian businesses haven’t fully registered yet.
Here’s the honest truth from someone who’s spent 15 years inside this space. ESG in India used to be something CSR teams handled on the side. It’s now a boardroom discipline with legal teeth. SEBI, MoEFCC, BEE, and RBI are no longer politely requesting disclosure. They’re mandating it, assuring it, and in the case of the carbon market, penalising non-compliance. The question for every Indian business isn’t whether to take ESG seriously. It’s how far behind you already are.
Let’s walk through what’s actually changed and what you should be doing about it.
The BRSR Ladder Just Got Steeper
SEBI’s Business Responsibility and Sustainability Reporting framework has been climbing a clear glide path since 2022-23. FY 2024-25 was the year BRSR Core with reasonable assurance became mandatory for the top 250 listed companies. Those reports are now filed. And the lessons from that first year of real assurance are worth paying attention to.
The auditors didn’t go easy. A lot of companies that had been self-reporting GHG emissions, water consumption, and waste data for three years discovered their numbers didn’t survive scrutiny. Inconsistent measurement boundaries, missing activity data, calculation errors, and unverifiable workforce metrics. Basically the stuff you’d expect when you bolt sustainability reporting onto processes designed for financial reporting.
FY 2025-26 (the year we’re currently inside) moves the assurance obligation to the top 500 listed entities. FY 2026-27 brings in all top 1,000. That’s the path, notified clearly in the SEBI circular of December 2024 and reinforced in March 2025.
A couple of things happened last year that every BRSR-obligated company should know about. In December 2024, SEBI issued the Industry Standards on Reporting of BRSR Core, developed jointly by ASSOCHAM, FICCI, and CII. These standards clarified a ton of ambiguity around how to compute intensity ratios, how to handle PPP-adjusted revenue, and what constitutes acceptable boundary-setting. If you’re still interpreting BRSR Core on your own, you’re probably doing it wrong.
Then in March 2025, SEBI recalibrated the language from “assurance” to “assessment or assurance” to open up the market to professionals beyond chartered accountants. This was a pragmatic move. There simply aren’t enough traditional audit firms with sustainability expertise in India to cover 1,000 companies by FY 2026-27.
The value chain piece has also been eased. SEBI shifted value chain ESG disclosure from “comply-or-explain” to “voluntary” for FY 2025-26, applicable to the top 250 companies. The assurance of value chain data is now voluntary from FY 2026-27, not mandatory as originally proposed. On paper this sounds like regulatory relief. In practice, smart companies are still building value chain data systems because the pressure isn’t coming only from SEBI. It’s coming from banks, international customers, and CBAM.
One thing worth flagging. SEBI has also added a new leadership indicator under Principle 6 requiring companies to disclose green credits generated or procured by themselves and their top 10 value chain partners. This is the first time green credits have formally entered mandatory ESG disclosure architecture.
The Indian Carbon Market Is Real Now
November 2025 felt theoretical. April 2026 doesn’t.
MoEFCC notified emission intensity targets for four energy-intensive sectors (aluminium, cement, chlor-alkali, and pulp and paper) in October 2025. Another three sectors (petroleum refining, petrochemicals, and textiles) were notified in January 2026. Iron and steel targets are still pending as of this writing. That’s seven of the originally planned nine sectors, covering approximately 490 obligated entities with legally binding emissions intensity targets for FY 2026 and FY 2027. FY 2024 is the baseline year.
The Carbon Credit Trading Scheme works on intensity targets rather than absolute caps. Each sector has a trajectory extending to 2030, calibrated against India’s updated NDC (47% emissions intensity reduction below 2005 levels by 2035, net zero by 2070). Entities beating their intensity targets earn Carbon Credit Certificates. Those falling short must buy CCCs or face penalties.
The numbers to watch are the reduction percentages. For the first compliance cycle, the targets are modest. Cement entities face cuts ranging from 0.85% to 7.6% depending on whether they produce OPC or PPC. Aluminium sits between 1.9% and 7.06%. Chlor-alkali runs 1.32% to 4.53%. Pulp and paper goes up to 15% over two years. The cumulative average across sectors works out to roughly 3% intensity reduction in the first cycle, getting progressively more stringent in FY 2026-27.
Here’s where it gets interesting. The voluntary offset mechanism has been running since June 2025, with BEE opening registrations for non-obligated entities. This is the channel through which farmer producer organisations, renewable energy developers, afforestation projects, and green hydrogen producers can generate tradable CCCs. Eight project methodologies have been approved so far, including mangrove restoration and improved cookstoves. By early 2026, the voluntary mechanism has started to take shape, though actual traded volumes remain small.
Compliance market trading is now expected to start in the second half of 2026. The Power Minister has indicated October 2026 for the first official trades of compliance CCCs. Until then, obligated entities are measuring baseline performance, getting verified, and planning whether to bank, buy, or sell.
The expected price range is ₹600 to ₹900 per tonne initially, which translates to roughly $7-11. Some analysts peg it higher. Most agree prices will stay subdued in the early cycles because of modest targets and unlimited banking provisions. The World Economic Forum and IEEFA have both flagged a risk that large credit surpluses could suppress market signals, which is why there’s now active debate about introducing a Price or Supply Adjustment Mechanism. Don’t be surprised if that shows up in a notification later this year.
Grid Controller of India Limited is operating the BEE Registry for CCC issuance. Trading will happen on power exchanges (IEX and PXIL are the contenders), with CERC as the trading regulator. If you’re in an obligated sector and you don’t yet have a digital MRV system tracking intensity in near-real-time, you’re already behind. Bilancia’s low-carbon solutions team has been helping CCTS-obligated entities build this infrastructure since the first sectoral targets dropped.
Green Credits Are Growing Quietly
The Green Credit Programme that MoEFCC launched in 2023 has been building in the background. As of early 2026, Gujarat, Madhya Pradesh, and Chhattisgarh lead participation, with roughly 2,150 hectares committed across the top three states. Maharashtra, Assam, and Bihar are also in. Even Goa and UP have put hectares into the system.
The programme covers eight activity categories (tree plantation, water conservation, sustainable agriculture, waste management, air pollution reduction, mangrove conservation, sustainable agriculture practices, and sustainable building). Verified actions generate green credits that can be traded on a centrally managed platform.
The distinction between carbon credits and green credits matters for strategy. Carbon credits reward emissions avoided or sequestered. Green credits reward restoration and conservation actions, some of which also reduce carbon, some of which don’t. A company planting trees on degraded land can potentially earn both, though the overlap rules are still being refined.
My take: the Green Credit Programme is still finding its footing. Measurement standards across different activity categories aren’t fully harmonised yet, and there’s real greenwashing risk if monitoring stays weak. But for companies with large land holdings, water-intensive operations, or CSR budgets that can be redirected toward restoration, it’s a legitimate mechanism to generate reportable value that also qualifies as a BRSR Principle 6 leadership indicator.
CBAM Is No Longer a Future Problem
January 1, 2026 was the line in the sand. CBAM moved from its transitional reporting phase to its definitive phase on that date. Indian exporters of steel, aluminium, cement, fertilisers, hydrogen, and electricity to the EU now face real carbon costs.
The early numbers are brutal. Indian steel and aluminium exports to the EU dropped 24.4% year-over-year in FY 2024-25 just on CBAM anticipation. The Global Trade Research Initiative estimates that Indian exporters may have to cut prices by 15-22% to stay competitive against lower-carbon producers. Coal-based aluminium producers are the most exposed. Blast furnace steel operators are close behind.
To put concrete numbers on it: India’s steel sector emits roughly 2.5 tonnes of CO2 per tonne of crude steel. The EU average sits between 1.5 and 1.8 tonnes. At the EU ETS price (hovering around €80 per tonne in early 2026), that 0.7-1.0 tonne gap translates to €56-80 of carbon cost per tonne of steel exported. For a mid-sized Indian exporter shipping 50,000 tonnes annually to Europe, that’s potentially €3-4 million a year in CBAM exposure if nothing changes. Getting product-level carbon footprints verified for your installations is the only defensible path.
The first annual CBAM declaration for 2026 imports is due on 30 September 2027. That gives exporters roughly 18 months to verify their emissions data with ISO 14065-accredited verifiers and submit through EU importers. Companies that fail to provide plant-level verified data face default emission values, which are typically 30-80% higher than actual emissions. That’s the penalty for not having your act together.
Bureau Veritas India, TÜV India, DNV India, and SGS India are building CBAM verification capability. Expect a capacity crunch by mid-2026 as Indian exporters scramble for audit slots.
There’s one piece of good news. CBAM Article 9 allows deductions for carbon prices already paid in the country of origin. Once CCTS compliance trading starts in H2 2026, Indian exporters participating in the domestic carbon market can offset some of their CBAM exposure. So the decision to engage with CCTS isn’t just a domestic compliance question anymore. It’s a trade competitiveness question.
The India-EU Free Trade Agreement, signed on January 27, 2026, did not carve out CBAM exemptions. That ship has sailed. The only path forward is measurement, verification, and actual decarbonisation.
The CSRD Omnibus Has Rewritten The European Rulebook
This one’s big, and not enough Indian MNCs have caught up with it yet.
In February 2026, the EU adopted the Omnibus I Directive (Directive EU 2026/470) which fundamentally narrowed the scope of CSRD. It came into force on 18 March 2026. The old CSRD framework was going to pull in roughly 50,000 companies across the EU. After the Omnibus, that number drops by about 80-85%, leaving maybe 7,000-10,000 in scope.
The new thresholds: companies need more than 1,000 employees and over €450 million net turnover to be subject to CSRD. Third-country (that includes Indian) parent companies face CSRD obligations only if they have over €450 million net turnover generated in the EU and at least one EU subsidiary or branch with over €200 million turnover.
For wave 1 companies (the public interest entities that started reporting for FY 2024), member states can choose to exempt them from FY 2025 and FY 2026 reporting if they no longer meet the stricter thresholds.
ESRS reporting standards have also been substantially simplified. Mandatory data points are being cut by roughly 70%, from 1,073 down to around 320. Sector-specific standards have been dropped. The simplified ESRS is expected to be finalised by mid-2026 and formally apply for financial years starting on or after 1 January 2027.
CSDDD (the Corporate Sustainability Due Diligence Directive) has also been scaled back. The new thresholds: more than 5,000 employees and over €1.5 billion net turnover. The transposition deadline has been extended to 26 July 2028, with actual application from 26 July 2029.
What does this mean for Indian companies? A few things.
First, if you were panicking about CSRD compliance for your EU subsidiary, most Indian-owned EU subsidiaries will likely fall out of scope. Double-check your thresholds.
Second, the value chain data pressure from European customers has eased, but not disappeared. The Omnibus introduces a “value-chain cap” protecting companies with fewer than 1,000 employees from being asked to provide data beyond voluntary reporting standards. Your European buyers can no longer compel you to fill extensive ESG questionnaires that go beyond VSME (Voluntary SME reporting standard) unless you voluntarily agree.
Third, don’t take the Omnibus as a signal that ESG is being rolled back. The direction of travel remains unchanged. The simplification is about scope and process, not ambition. Investors, banks, and major customers are still asking for the same data they were asking for six months ago. The voluntary VSME is becoming the de-facto baseline expectation, and double materiality assessment remains central to any credible ESG disclosure strategy.
RBI’s Climate Disclosure Framework Is Still In Draft Territory
Here’s one area that hasn’t moved as fast as expected. The RBI’s Disclosure Framework on Climate-related Financial Risks, first released as a draft in February 2024, remains in draft status as of April 2026. The original trajectory had scheduled commercial banks, all India financial institutions, and top-layer NBFCs disclosing governance, strategy, and risk management from FY 2026, with metrics and targets from FY 2028.
The consultation closed in April 2024, and RBI has been working through feedback. A final version was expected by late 2025 but hasn’t been notified yet. The delay is likely tied to alignment debates around IFRS S2 disclosures and the ISSB standards.
What does this mean practically? Banks that have been preparing for mandatory climate disclosure from FY 2026 are now in a waiting room. Many have chosen to go ahead and start disclosing voluntarily because their international peers (particularly European parent banks) and large institutional investors are demanding it anyway.
If your company borrows heavily from Indian banks, expect climate-related questions during credit reviews to intensify through 2026. The banks are preparing their own disclosure readiness, which means they’re pushing the data requirement down to their borrowers. Transition plans, physical risk exposure, and Scope 1 and 2 emissions data are all starting to appear in loan documentation.
SEBI’s ESG debt securities framework from June 2025 is separately running. Green bonds, social bonds, sustainability bonds, and sustainability-linked bonds all now have defined rules requiring mandatory third-party review (both pre-issuance and post-issuance) and ongoing KPI performance tracking.
State-Level Regulations Are Thickening The Soup
While national frameworks grab headlines, state environmental regulations are where a lot of operational pain actually lives.
Maharashtra has continued tightening real-time emissions monitoring requirements for industries in Pune, Mumbai, and Aurangabad. The MPCB’s Continuous Emissions Monitoring System (CEMS) mandate now covers a wider set of red and orange category industries. If you operate a medium or large manufacturing facility here, you’re probably already feeding emissions data to MPCB servers.
Gujarat’s State Environment Impact Assessment process for new projects has gotten more rigorous, particularly around water use and effluent treatment. The state’s Climate Change Action Plan has moved from draft to implementation in several sectors.
Karnataka’s electronic waste and hazardous substance regulations continue to tighten for the Bengaluru tech manufacturing cluster. Tamil Nadu has intensified coastal zone enforcement, affecting industries along the Chennai-Tuticorin belt.
For a manufacturer running operations in Maharashtra, Gujarat, and Karnataka, that’s three different sets of CEMS thresholds, three different environmental clearance regimes, and three different sets of reporting obligations, layered on top of national BRSR and CCTS compliance. The compliance overhead is no joke.
The Supply Chain Data Reality
Value chain ESG disclosure has been the most operationally painful part of SEBI’s framework, and the reality hasn’t matched the regulatory optimism.
Under the redefined rules, listed entities must disclose ESG metrics for partners individually contributing 2% or more of purchases or sales by value, capped at covering 75% of total transactions. For a typical mid-cap manufacturer, that usually means 20-40 key suppliers and distributors.
The problem: most of those suppliers are MSMEs with no ESG reporting infrastructure. They don’t track Scope 1 and 2 emissions. They don’t have workforce diversity data. They don’t maintain safety incident registers in formats that roll up cleanly. Asking them for BRSR Core KPIs is like asking a kirana store for IFRS-compliant financials.
Companies that are taking this seriously are running supplier capability-building programmes. Templates aligned with BRSR Core. Supplier training sessions on GHG accounting basics. Sometimes financial support for sub-meters or emissions monitoring. This is where the work actually happens.
The Omnibus easing on the EU side helps here too. Your EU customers can’t demand BRSR-level detail from Indian MSME suppliers unless they voluntarily agree. Which means the pressure now comes primarily from domestic SEBI compliance rather than cross-border demands.
One practical approach I’ve recommended to clients: pick your top 10 value chain partners by transaction value and treat them as capability-building priorities. Get them to baseline Scope 1 and 2. Get them to track water and waste. Don’t try to boil the ocean.
So What Should You Actually Be Doing In April 2026?
After 15 years of this, I’ve stopped writing long lists of “strategic imperatives.” Here’s what actually matters right now.
[Baseline your FY 2024-25 performance](https://bilancia-group.com/services/sustainability-reporting-disclosure/) across GHG, water, waste, and workforce. If you haven’t got reliable numbers for the year that just ended, you’re behind. Every conversation with banks, investors, auditors, and international customers in the next 12 months will start with “what are your emissions?” Have an answer.
Invest in [measurement systems](https://bilancia-group.com/services/technology-advisory/) that scale. Spreadsheets are dead. BRSR Core assurance has proven this. Any company still running sustainability data on Excel will fail its first serious audit. Pick an ESG data platform, get it connected to your ERP, and start generating audit-trail ready data.
If you’re in a CCTS-obligated sector, get your MRV infrastructure built before H2 2026. You’ll need it the day trading starts. If you’re in aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals, or textiles, you’re obligated now. Iron and steel targets are coming shortly.
If you export to the EU, get a verified emissions report completed for your production installations. ISO 14065 verification is the only way to avoid default CBAM values. Book a verifier now because the queue is already forming.
If you’re a BRSR-obligated company, map your top 10 value chain partners and start capability-building. Don’t wait for FY 2026-27 assurance obligations to force the issue.
If you’re a board member or CFO, create an [ESG steering committee](https://bilancia-group.com/services/sustainability-esg-roadmap/) that reports to the board quarterly. This can’t live in the CSR team anymore. Finance, operations, procurement, legal, and sustainability need to be around the same table. Capital allocation decisions, supplier selection, product development, and risk management are all being reshaped by ESG. The CFO must own the numbers.
Use the first year of BRSR Core assurance experience to tighten FY 2025-26 data. Whatever the auditors flagged at the top 250 companies will be flagged again at the top 500 this year. Learn from the mistakes already made.
The Opportunity Side
Everything above is defensive. The offensive play is still underexplored.
Companies with genuinely low-carbon products will start pricing premium into European markets. Indian green hydrogen producers are already seeing offtake interest from EU buyers. Low-carbon cement from kilns using alternative fuels commands a margin. Recycled aluminium with verified emissions data is approaching price parity with primary metal in certain segments.
Access to capital is tilting toward ESG-credible companies. Domestic banks are building green finance books. International institutional investors are running ESG screens. Indian companies with defensible sustainability credentials will access capital 50-150 basis points cheaper than peers by 2027.
The talent angle matters more than most founders realise. Engineering and MBA grads in their 20s are filtering employers on climate credibility. If your sustainability claims are thin, you’ll lose the pipeline.
And don’t overlook voluntary carbon market revenue for companies with restoration assets. Mangrove projects in Maharashtra’s coastal zones, afforestation on degraded lands in Madhya Pradesh, agroforestry across FPO networks – these are all generating real revenue streams right now, under Article 6.4 Paris Agreement pathways and the domestic Green Credit Programme.
Why Indian Businesses Still Need Expert ESG Guidance
The regulatory picture laid out above covers maybe 60% of what’s actually relevant. Dozens of additional environmental laws, state-level notifications, Securities and Exchange Board sub-circulars, and industry-specific regulations layer on top. Figuring out what applies to your specific operations in your specific locations is genuinely hard.
Getting it wrong is expensive. SEBI enforcement has become more active. Recent cases have seen restated BRSR disclosures, trading suspensions, and actions against company officers. Pollution control board penalties under CCTS are financial and operational. CBAM non-compliance means losing EU market access entirely.
But compliance is only half the reason to get expert help. The strategic opportunities in India’s sustainability economy are substantial and time-sensitive. Early movers in CCTS are building verified emissions datasets that become trade assets. Companies developing green credit generation capacity now will have inventory when demand rises. Firms building BRSR-grade data infrastructure now will use it for capital raises, M&A due diligence, and insurance pricing for years.
Bilancia Consulting works with Indian businesses across manufacturing, services, and infrastructure. Our work spans ESG strategy, BRSR preparation, carbon footprint verification, life cycle analysis, green credit qualification, CBAM compliance support, and sustainability technology implementation. We help companies turn regulatory obligations into competitive advantages.
The companies that will define the next decade of Indian corporate leadership are the ones treating ESG as a strategic discipline, not a compliance checkbox. The ones investing in data infrastructure now. The ones having honest conversations with their boards about transition risk. The ones engaging with CCTS before trading opens, not after penalties arrive.
About Bilancia Consulting
Bilancia Consulting is a Pune-based sustainability and ESG advisory firm serving Indian businesses across manufacturing, services, and infrastructure. We provide end-to-end support including climate strategy development, emissions measurement and verification, SEBI BRSR preparation, carbon market participation guidance, CBAM compliance, and ESG technology implementation. Our team combines deep knowledge of Indian regulatory requirements with international sustainability standards expertise, helping clients meet compliance obligations while building genuinely sustainable operations. Contact us at general@bilanciaconsulting.co.in to discuss how we can support your ESG compliance journey.