In a landmark move to align India’s corporate sector with global climate goals, the Government of India has introduced a mandatory carbon reporting framework for all publicly listed companies. Effective from April 1, 2026, the new rules require companies listed on Indian stock exchanges to measure, verify, and publicly disclose their carbon emissions across Scope 1 (direct), Scope 2 (indirect from energy), and Scope 3 (indirect from supply chain and other sources) categories. This mandate will be implemented under the expanded Business Responsibility and Sustainability Reporting (BRSR) Core guidelines, overseen by SEBI in consultation with the Ministry of Environment and the Ministry of Corporate Affairs.

Under the mandate, companies must file annual Carbon Disclosure Reports along with their financial statements, audited by a SEBI-registered third-party environmental auditor. These disclosures must cover total greenhouse gas emissions, emission intensity per unit of revenue, carbon offset initiatives, and year-over-year performance against reduction targets. The reports will be submitted to SEBI’s ESG reporting portal and will be made available to the public, investors, and rating agencies. In addition, sector-specific emission benchmarks and performance indicators will be developed to guide companies and aid comparability across industries.

Failure to comply with the carbon reporting mandate could result in monetary penalties, ESG rating downgrades, and restricted access to green financing instruments. The government is also providing a phased compliance timeline, starting with the top 500 listed entities by market capitalization, before extending the requirement to all main-board companies by 2028. Supporting this initiative, the Ministry will offer technical guidance, data management templates, and training programs to help companies build internal capacity for environmental reporting. This mandate positions India as a front-runner in sustainable corporate governance, ensuring that climate risk is transparently addressed in capital market disclosures.