Environmental, Social and Governance (ESG) - Principles and Practice · Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators

Global ESG Mandates and Reporting Standards for Indian Companies

Updated 11 October 2026 · Fact-checked

Global mandates are laws and standards that tell companies what sustainability information to disclose. The key ones are the EU CSRD (law), ISSB IFRS S1 and S2 (investor-focused standards), TCFD (climate framework now absorbed into IFRS S2) and the EU Taxonomy (classification of green activities). Answer by stating the source, scope, and effect on India.

Understand Global Mandates and Reporting Standards

Investors and regulators want sustainability data that is comparable, reliable and decision-useful. Early reporting was voluntary and varied widely. Global mandates try to fix this by setting common rules on what to disclose and how.

There are two kinds of instruments. Laws bind companies in a jurisdiction, such as the EU Corporate Sustainability Reporting Directive (CSRD). Standards and frameworks set the content of reports, such as IFRS S1, IFRS S2, GRI and TCFD. A law may require use of a standard. The CSRD, for example, requires reporting under the European Sustainability Reporting Standards (ESRS).

ISSB standards come from the International Sustainability Standards Board, set up under the IFRS Foundation. IFRS S1 covers general requirements for sustainability-related financial disclosures. IFRS S2 covers climate-related disclosures. Both focus on information useful to investors, that is, what affects enterprise value. They are built on four pillars: governance, strategy, risk management, and metrics and targets. These four pillars came from the TCFD recommendations. The TCFD was created by the Financial Stability Board. Its monitoring role passed to the IFRS Foundation after the ISSB began work.

The GRI Standards differ in purpose. GRI serves a wide set of stakeholders and asks for a company's impacts on the economy, environment and people (impact materiality). ISSB looks at sustainability risks and opportunities that affect the company's value (financial materiality). The CSRD uses double materiality: both impact and financial. Many companies use GRI and ISSB together.

The EU Taxonomy is a classification system that defines which economic activities count as environmentally sustainable. It is not a reporting standard, but companies in scope disclose how much of their turnover, capex and opex is taxonomy-aligned. The EU's Carbon Border Adjustment Mechanism (CBAM) is a separate trade measure. It puts a carbon-cost obligation on imports of certain carbon-intensive goods such as iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. Indian exporters of these goods to the EU are affected.

For Indian companies, relevance arises in three ways. Companies with EU subsidiaries or significant EU operations may fall in CSRD scope, subject to the thresholds in the Directive as amended. Exporters face CBAM and customer data requests. Global investors and lenders expect ISSB-style disclosure. In India, SEBI's BRSR is the mandatory format for top listed companies, and it is being aligned over time with global standards.

Key rules to remember

ISSB four pillars: Governance + Strategy + Risk management + Metrics and targets; Used in IFRS S1 and IFRS S2. Taken from TCFD. Name all four in any answer.
Financial materiality (ISSB): Information that could reasonably affect investors' decisions about providing resources to the entity; Outside-in view: how sustainability issues affect the company.
Double materiality (CSRD): Impact materiality + Financial materiality; Company reports both its impact on people and environment and how sustainability issues affect it.
IFRS S1 vs S2: S1 = general sustainability-related financial disclosures; S2 = climate-related disclosures; S2 is the climate-specific standard and applies S1's structure.
GRI vs ISSB: GRI = impact on world, multi-stakeholder; ISSB = effect on enterprise value, investor-focused; The most common comparison question.
EU Taxonomy alignment: Share of turnover, capex and opex from taxonomy-aligned activities; A classification and disclosure tool, not a ratings system.
CBAM: Carbon price obligation on imports of specified carbon-intensive goods into the EU; A trade measure, not a reporting standard. Indian exporters are exposed.

How to solve Global Mandates and Reporting Standards questions

Use this order for any question on global mandates. It keeps the answer structured and covers what examiners look for: provision, analysis, conclusion.

1Identify the instrument asked: law (CSRD, CBAM), standard (IFRS S1/S2, GRI, ESRS) or framework (TCFD, Taxonomy).
2State its issuer and purpose in one or two lines, for example ISSB under the IFRS Foundation for investor-focused disclosure.
3List the core content: four pillars for ISSB and TCFD, double materiality for CSRD, activity classification for Taxonomy.
4Apply to the facts given: is the company an EU subsidiary, an exporter, a listed Indian company, or a lender-funded firm?
5Link to the Indian position: BRSR under SEBI's LODR, and note that BRSR and global standards are being aligned but are not identical.
6Compare if asked (GRI vs ISSB, CSRD vs BRSR) using a clear basis such as audience, materiality and legal status.
7Conclude with practical actions: gap analysis, data systems, board oversight, assurance and role of the Company Secretary.

Quickest way: Four-line instrument grid

When to use it: When time is short or the question asks you to outline or compare several mandates.

For each instrument write: Who issues it, Is it binding, What it covers, Who it affects in India.
Use the ISSB four pillars as your skeleton for any disclosure answer.
Tag every instrument as law, standard or framework in the first line.
Finish with one line on BRSR alignment and one practical action for the company.

Common mistakes in Global Mandates and Reporting Standards

Treating TCFD as still the live standard-setter.
Older material presents TCFD as the leading climate framework.
Fix: Say that TCFD's four pillars were carried into IFRS S2 and the ISSB took over monitoring of climate disclosures.
Saying the CSRD applies to all Indian companies.
Students read 'EU law' as global law.
Fix: State that it applies to entities in the EU scope and, under the Directive's conditions, certain non-EU groups with significant EU activity. Indian companies are affected through EU subsidiaries, operations or customers, subject to current thresholds.
Calling GRI and ISSB the same because both are standards.
Both produce sustainability reports.
Fix: Contrast audience and materiality: GRI is multi-stakeholder impact, ISSB is investor-focused enterprise value.
Confusing the EU Taxonomy with CBAM.
Both are EU green measures that touch India.
Fix: Taxonomy classifies green activities and drives disclosure. CBAM is a carbon charge on specified imports.
Mixing up IFRS S1 and S2.
The numbers are close and both use the same pillars.
Fix: Remember S1 is general, S2 is climate. S2 builds on S1.
Writing a purely descriptive answer with no Indian link.
Students memorise the global content and stop.
Fix: Always add BRSR, SEBI and the practical steps for an Indian company, including the Company Secretary's role.

Worked examples

Example 1

Distinguish between the GRI Standards and the ISSB Standards (IFRS S1 and S2). Explain how an Indian listed company may use them with BRSR.

Show the solution

Provision: GRI Standards are a widely used set of sustainability reporting standards. ISSB Standards are IFRS S1 (general requirements) and IFRS S2 (climate-related disclosures).
Audience: GRI serves a wide range of stakeholders such as communities, employees and regulators. ISSB serves investors and lenders.
Materiality: GRI focuses on the company's impacts on the economy, environment and people. ISSB focuses on sustainability matters that could affect the company's cash flows, access to finance or cost of capital, that is, enterprise value.
Structure: ISSB uses four pillars: governance, strategy, risk management, metrics and targets. GRI uses topic-based standards with disclosures on each topic.
Application: BRSR is the format mandated by SEBI for top listed companies. A company can use GRI to enrich impact disclosures and ISSB pillars to strengthen climate risk and financial linkage.
Conclusion: The two are complementary. A company serving global investors and local stakeholders can use both, while meeting the mandatory BRSR format first.

Answer: GRI is stakeholder and impact oriented, while ISSB is investor and enterprise-value oriented. They are complementary, and an Indian listed company must meet BRSR first and may use GRI and ISSB to deepen and align its disclosures.

Example 2

Anvika Steels Limited, an Indian listed company, exports steel to Germany and has a wholly owned subsidiary in the EU. Advise the board on the global mandates relevant to it.

Show the solution

Identify the measures: CBAM (steel imports into the EU), CSRD (EU subsidiary) and the EU Taxonomy (disclosure link through EU customers and entities).
CBAM: iron and steel is a covered sector. Anvika's importers in the EU must report embedded emissions and bear a carbon cost on imports. Anvika will face data requests and price pressure. It should measure product-level emissions.
CSRD: the EU subsidiary must check whether it meets the Directive's size and scope conditions as currently in force. If so, it must report under ESRS using double materiality, and the Indian parent should expect data requests for consolidation.
Taxonomy: if the EU entity or customers report under the Taxonomy, they will ask for activity-level data on environmental performance, so Anvika should be ready to supply it.
Indian link: Anvika already files BRSR. It should map BRSR data to ESRS and IFRS S2 requirements, mainly greenhouse gas emissions, to find gaps.
Actions: set up a board-level ESG committee review, upgrade emissions data systems, seek assurance, and engage legal advisers on EU thresholds. The Company Secretary should coordinate compliance and board reporting.

Answer: Anvika faces CBAM exposure on steel exports, possible CSRD reporting through its EU subsidiary subject to thresholds, and Taxonomy-related data requests. It should map BRSR to ESRS and IFRS S2, strengthen emissions data, and put board oversight and assurance in place.

Exam tips

Open every answer by tagging the instrument as law, standard or framework. It shows clarity at once.
Use the ISSB four pillars as a skeleton. They also answer TCFD questions.
For comparison questions, use a clear basis such as audience, materiality, legal status and Indian relevance.
Do not quote thresholds or dates from memory unless you are sure. Say 'subject to the thresholds currently in force' instead.
End with the Indian angle: BRSR, SEBI and the Company Secretary's practical role. Case questions reward this.

Practice questions from Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators

Global Mandates and Reporting Standards: frequently asked questions

Does the EU CSRD apply to Indian companies?

Not directly to all of them. It applies to entities within EU scope and, under its conditions, to certain non-EU groups with significant EU activity. Indian companies with EU subsidiaries or large EU operations should check the current thresholds.

What is the difference between IFRS S1 and IFRS S2?

IFRS S1 sets general requirements for disclosing sustainability-related risks and opportunities. IFRS S2 deals specifically with climate-related disclosures. Both use the same four pillars: governance, strategy, risk management, and metrics and targets.

What is the difference between GRI and ISSB standards?

GRI looks at a company's impact on the economy, environment and people for many stakeholders. ISSB looks at sustainability matters that affect enterprise value for investors. Many companies use both.

What are the TCFD recommendations?

They are climate disclosure recommendations built on four pillars: governance, strategy, risk management, and metrics and targets. The ISSB's IFRS S2 incorporates them.

How do the EU Taxonomy and CBAM affect India?

The Taxonomy classifies green activities and shapes the data that EU customers and investors ask for. CBAM charges a carbon cost on imports of specified goods such as steel, aluminium and cement, so Indian exporters in those sectors are exposed.