ESG in India as Trust Infrastructure

Quick take: ESG isn’t a buzzword anymore — it’s the plumbing of trust. For boards, regulators and investors, ESG turns intent into verifiable outcomes; for nonprofits and CSR partners, it turns programmes into decision-useful data. This essay traces ESG’s global evolution, India’s 2025 rulebook, and — crucially — the “ESG infrastructure” inside Smile Foundation’s work that lets companies report with confidence while improving lives at scale.

From buzzword to baseline: a short history of ESG

Two decades ago, sustainability reporting was mostly voluntary and uneven. That changed in the mid-2000s when a UN-convened group of global financial institutions argued that environmental, social and governance issues were material to value creation. Their 2004 report—Who Cares Wins — popularised the term “ESG” and set off a chain reaction across capital markets.

The next milestone came in 2006 with the launch of the UN-supported Principles for Responsible Investment (PRI) — a voluntary code that now covers asset owners and managers who commit to integrate ESG factors in decisions. The PRI was unveiled at the New York Stock Exchange and has grown into a global coalition.

In parallel, the Global Reporting Initiative (GRI) founded in 1997, with roots in CERES, Tellus Institute and UNEP created the first widely used standards for sustainability reporting, later expanded to cover social and governance topics.

Fast-forward to the 2020s and the alphabet soup began to converge. In 2023, the International Sustainability Standards Board (ISSB) issued IFRS S1 (general sustainability disclosure) and IFRS S2 (climate), effective for annual periods beginning January 1, 2024 — arguably the clearest global baseline for investor-grade sustainability disclosures.

Meanwhile, the European Union’s Corporate Sustainability Reporting Directive (CSRD) moved non-financial reporting from “nice-to-have” to mandatory, beginning FY 2024 for the first wave and then phasing in additional companies. In 2025, the EU also voted to defer timelines for later waves, easing near-term burdens while keeping the direction of travel intact.

Markets want comparable, assured and decision-useful sustainability data — not anecdotes.

Current rulebook: where ESG in India meets CSR

India has built one of the most distinctive ESG ecosystems in the world by pairing capital-market disclosures with the world’s only mandatory CSR spend law.

• Mandatory CSR: Under Section 135 of the Companies Act, 2013, qualifying companies must spend at least 2% of average net profits from the prior three years on CSR activities aligned to Schedule VII. Companies must also file CSR-2, a yearly return detailing projects and spends. NGOs executing CSR projects must register via CSR-1.
• NGRBC → BRSR: India’s National Guidelines on Responsible Business Conduct (2019) led SEBI to replace the old BRR with Business Responsibility and Sustainability Reporting (BRSR), mandatory for the top 1,000 listed entities from FY 2022–23.
• BRSR Core & assurance: In July 2023, SEBI introduced BRSR Core—a tighter set of key indicators requiring reasonable assurance, phasing in from the top 150 listed companies (FY 2023–24) and scaling up to the top 1,000 by FY 2026–27; SEBI has since refined timelines and introduced industry standards to make reporting more consistent.
• Value-chain disclosures: SEBI’s framework extends to upstream and downstream partners (covering major purchase/sales relationships), recognizing that a company’s real impacts and risks sit in its ecosystem. Timelines have been adjusted to sequence capacity building before full compliance.
• ESG mutual funds: SEBI now allows multiple ESG strategies (exclusions, integration, best-in-class, impact, sustainable objectives, transition) with clear naming norms and stronger anti-greenwashing disclosures.
• Social Stock Exchange (SSE): SEBI’s SSE enables not-for-profit organizations to raise funds via Zero-Coupon Zero-Principal (ZCZP) instruments on NSE/BSE’s SSE segment—formalizing disclosures and transparency for philanthropic capital. Early listings demonstrate feasibility, and process improvements continue.
• Regulatory fine-tuning: Like Europe, India is calibrating scope and timelines to balance ambition and feasibility; SEBI announced reviews of ESG requirements and value-chain deadlines in 2024–25.
• Banking & climate risk: The RBI has issued a draft climate-risk disclosure framework (TCFD-aligned) for banks/NBFCs and launched a climate risk data platform (RBI-CRIS)—a strong signal that sustainability data will increasingly mediate credit and risk.

India’s model attaches reporting (BRSR/BRSR Core) to capital markets, funding (CSR/SSE) to statutory mechanisms, and risk (RBI) to finance. That creates both opportunity and responsibility for NGOs to generate assurable, interoperable impact data that corporate partners can plug straight into their ESG statements.

What “ESG in India” looks like inside a non-profit

ESG infrastructure is everything under the hood that makes an NGO a reliable partner for assured reporting. Think of it as four layers:

1. Governance & integrity
   • Board independence, conflict-of-interest norms, audit trails, child-protection and safeguarding policies, grievance redressal, whistle-blower channels.
   • Clear procurement policies and vendor due diligence to support partners’ value-chain disclosures under BRSR Core.
   • Interoperability with global frameworks—so data can map to GRI, ISSB S1/S2 or CSRD concepts when a corporate needs it. (GRI provides explicit linkages to BRSR and alignment guidance across frameworks.)
2. Data & measurement
   • Program logframes and indicator dictionaries that define inputs, outputs and outcomes.
   • Beneficiary registries with consent logs and privacy controls.
   • Monitoring dashboards that generate auditable evidence (attendance, service uptake, clinical or educational outcomes), with sampling plans for verification.
3. Risk & compliance
   • Controls for financial management (maker-checker, reconciliations, restricted grant accounting).
   • Schedule VII alignment for projects (CSR eligibility), plus readiness for CSR-2 reporting for corporate partners.
   • SSE-readiness: documentation and impact metrics that can support ZCZP issuances where relevant.
4. Transparency & assurance
   • Routine third-party evaluations, beneficiary feedback loops, and assurance packs (indicator definitions, raw extracts, enumerator protocols).
   • Ability to provide reasonable assurance-ready data on BRSR Core-like indicators (e.g., labour practices in the program supply chain, health & safety, community outcomes).

This is the invisible architecture that lets CSR teams move beyond “storytelling” to decision-useful, assurable impact.

Where Smile Foundation fits: translating programmes into ESG-grade evidence

Smile Foundation’s portfolio—education, primary healthcare, nutrition, women’s empowerment and disaster response—naturally aligns to the S in ESG, with spill overs into E (resilience, renewable integration) and G (transparent partnerships). Without over-claiming specifics, here’s how a well-built NGO infrastructure like Smile’s can power corporate ESG and CSR requirements:

Map programmes to corporate disclosures (BRSR/ISSB/CSRD)

• Health access & prevention: Our mobile medical units and e-health touchpoints produce prevention and access metrics (screenings, immunisation linkages, referrals completed). These populate social-impact KPIs and value-chain disclosures for healthcare and FMCG partners under BRSR Core — especially where last-mile access is material to product stewardship or license to operate.
• Nutrition & early childhood: Evidence on anaemia screening, maternal counselling and diet diversity ties into public-health outcomes and for food & beverage partners, contributes to responsible product & community nutrition narratives demanded under BRSR. (GRI-BRSR linkages help translate indicators.)
• Education & skill building: Learning-outcome tracking (attendance, grade-level competencies) demonstrates human capital creation — useful for CSRD’s double materiality (inside-out community impact and outside-in risk) and ISSB’s focus on human capital where material.
• Women’s agency: Programs that raise female labour-force participation or leadership in community health intersect with DEI metrics that boards increasingly disclose in ESG funds’ requirements and BRSR leadership indicators.
• Resilience upgrades: Where feasible, solar lighting, water filtration or climate-smart improvements at clinics/schools can legitimately contribute to E-side goals — especially as RBI nudges lenders toward climate-risk transparency and adaptation finance.

Give boards audit-ready comfort (BRSR Core, CSR-2, SSE)

• Assurance packs: Programme data configured to BRSR Core expectations (definitions, cut-offs, sampling) de-risks a corporate’s reasonable assurance cycle as SEBI’s glide path expands.
• CSR compliance: Projects structured to Schedule VII categories and documented to support the company’s CSR-2 filing are now table stakes. NGOs that understand this reduce year-end surprises for boards and audit committees.
• SSE option: For suitable projects, the Social Stock Exchange can channel philanthropic capital with regulated disclosures via ZCZP instruments—useful for companies seeking transparent, public fundraising for flagship social programmes.

Interoperability by design

Because global companies face ISSB/GRI/CSRD abroad and BRSR at home, Smile’s reporting needs to translate. GRI already publishes BRSR linkage guidance and broader interoperability notes across ISSB and ESRS standards — useful scaffolding for a common indicator dictionary.

Takeaway for CSR partners: you shouldn’t have to “re-build” evidence to suit each disclosure regime. A single, well-governed dataset should map across frameworks.

The cost question — and how to keep it real

Globally, companies have voiced concerns about the cost and complexity of new reporting regimes even as regulators argue the long-term benefits of standardized data. India is seeing similar calibration, with SEBI adjusting BRSR Core timelines and value-chain expectations.

What does that mean for NGO partners?

1. Right-sizing data: Track fewer, higher-quality indicators that align with corporate materiality. Quality beats quantity — especially under assurance.
2. Digital by default: Data capture needs lightweight offline capability, privacy controls and exportable audit trails — not bespoke tools that break at scale.
3. Assurance readiness: Maintain enumerator training logs, SOPs and change histories. Auditors love clear versioning.
4. Value-chain lens: If a company’s BRSR requires disclosures on its value chain, NGOs should anticipate vendor diligence (safeguarding, labour standards, emissions estimates) and have documentation ready.
5. Finance-sector pull: As RBI’s climate-risk regime matures, banks will increasingly ask for risk-aware project design (e.g., climate-resilient sites, heat mitigation). NGOs that speak this language will find it easier to attract low-cost capital and CSR co-funding.

An operating model for policymakers and CSR leaders

A. For policymakers

• Codify NGO outcome taxonomies. Offer standard indicator sets for education, health and nutrition that are assurance-ready and interoperable with ISSB/GRI/BRSR. (GRI already maps BRSR; extend and localize.)
• Strengthen the SSE. Continue simplifying ZCZP issuance, create a “light” secondary disclosure channel and publish exemplar fundraising documents for replication.
• Co-finance data systems. Underwrite shared open-source M&E stacks that trained NGOs can adopt with minimal cost.
• Assurance ecosystem. Build a cadre of social-sector assurance providers (beyond financial audit firms) to reduce costs and speed verification cycles.
• Align climate and social. As RBI finalizes climate-risk rules, encourage adaptation metrics in community health/education projects to crowd in finance.

For CSR partners

• Start with materiality. Map your highest-priority BRSR/ISSB topics to programme outcomes (e.g., nutrition, women’s economic agency, adolescent learning). Don’t chase vanity metrics.
• Co-design the indicator dictionary. Agree on definitions, disaggregation (gender, age, location) and sampling before grant signing.
• Budget for verification. Reserve 5–10% of programme costs for independent evaluations or assurance packs.
• Leverage the SSE. For flagship community programmes, consider ZCZP to signal transparency and crowd in co-funders.

What a Smile-style “ESG infrastructure” looks like in practice

Below is a condensed blueprint — not an exhaustive list — of what corporate partners should expect from a mature, assurance-ready NGO:

1. Policy & governance
   • Board-approved code of conduct; anti-fraud, anti-bribery and safeguarding policies; DEI commitments; conflict-of-interest declarations.
   • Vendor onboarding with KYC, labour-standards declarations and (where material) basic emissions data — supporting partner value-chain disclosures.
2. Evidence & data
   • Indicator dictionary aligned to GRI linkages with BRSR and cross-references to ISSB topics when relevant.
   • Consent and privacy protocols; GPS-tagged service points where appropriate; tamper-evident records for audits.
3. Programme controls
   • SOPs for service delivery (e.g., health camps, mobile clinics, community sessions) with compliance logs.
   • Field monitoring with randomised back-checks and grievance hotlines.
4. Reporting & Interoperability
   • Quarterly partner reports that roll up to CSR-2 needs, with assurance binders (raw extracts, enumerator rosters, QA notes).
   • Optional SSE-style reporting cadence for high-visibility projects.
5. Risk & Resilience
   • Climate-aware site planning (shade, ventilation, flood-safe storage) to align with the finance sector’s evolving risk lens.
6. Learning & Improvement
   • Beneficiary feedback loops; adaptive management; and annual learning reviews published for transparency.

Even when the Foundation’s field stories are compelling, this architecture is what allows a CFO, CSO or Audit Committee to sign off with confidence.

A word about “greenwashing” and narrative discipline

ESG’s critics often point to compliance fatigue and inflated claims. The antidote isn’t more slogans; it’s narrow, material and assured reporting. Europe’s CSRD debate shows both the costs and the opportunity of standardised sustainability disclosures; India’s own recalibration via SEBI reflects a similar realism. NGOs that keep their indicator sets tight, auditable and interoperable will win trust — and funding — faster.

Why this matters now

Three forces are converging:

1. Global baselines (ISSB) and regional mandates (CSRD) demand consistent, investor-grade data.
2. Indian disclosures (BRSR Core, value-chain) increasingly require assured data from outside the company’s four walls—where NGOs operate.
3. Financial sector nudges (RBI climate risk) will push lenders to prefer projects and partners with credible risk and impact data.

Smile Foundation’s edge is its ability to translate last-mile service delivery into board-ready evidence which the connective tissue that helps a company satisfy regulators, inform investors and earn community trust.

The road ahead for ESG in India

The ESG conversation is moving from promises to proof. Global standards are converging; India is localising with BRSR Core and strengthening its assurance spine; the RBI is bringing climate risk into finance. In this landscape, the most valuable thing an NGO can offer is decision-useful, assured data — not just moving stories but measurable outcomes that a board can stand behind.

Smile Foundation’s on-the-ground programmes are necessary but the ESG infrastructure behind them is what makes those programmes investable, reportable and scalable. For policymakers, that’s a reason to back shared measurement systems and assurance capacity. For CSR partners, it’s a reason to demand quality and co-create it.

If ESG is the plumbing of trust, then good data is the water that runs through it. Build the pipes right, and the impact flows.

Sources & further reading

• Origins & global standards: Who Cares Wins (2004); UN PRI launch (2006); GRI history; ISSB IFRS S1/S2 (effective 2024); EU CSRD timeline and 2025 update. (World Bank, United Nations Press, globalreporting.org, IFRS, Finance, Normative)
• India’s frameworks: SEBI BRSR (2021); BRSR Core (2023) + glide path; updates & industry standards (2024–25); NGRBC (2019); SEBI review of ESG in 2025. (sebi.gov.in, ca2013.com, KPMG Assets, iica.nic.in, Reuters)
• CSR law & filings: Companies Act §135 (2%); CSR-2 filing; NGO CSR-1 registration. (India Code, Mercator®, CSRBOX)
• SSE: SEBI SSE framework; NSE first listings; ZCZP process. (sebi.gov.in, NSE India)
• Interoperability: GRI–BRSR linkage and global alignment materials. (globalreporting.org)
• Banking & climate risk: RBI draft climate-risk disclosures and climate data platform. (Reuters, The Times of India)
• ESG debates (costs & opportunity): FT, Reuters, WSJ commentary on CSRD costs and calibration. (Financial Times, Reuters, The Wall Street Journal)