NGRBC Principle 2 (Sustainable Products) — BRSR Disclosures, LCA, R&D + Reclamation, EPR Overlap

What Principle 2 covers

The National Guidelines on Responsible Business Conduct (NGRBC) were issued by the Ministry of Corporate Affairs in 2018 and form the backbone of SEBI’s Business Responsibility and Sustainability Report (BRSR) format. Of the nine NGRBC Principles, Principle 2 covers product and service sustainability — the principle that businesses should provide goods and services in a manner that is sustainable and safe across the product lifecycle.

In BRSR-format terms, Principle 2 covers product sustainability through:

• Essential disclosures on R&D + capex deployed on technologies improving environmental and social impacts, procurement of sustainable inputs, product reclamation / take-back schemes, and inputs sourced from MSMEs and small producers
• Leadership disclosures (for the Top 1,000 listed entities) on Life Cycle Assessment (LCA) outcomes, recyclability targets, product information labels (recyclability, hazards), and product / packaging sustainability initiatives

The contextual operational background for many P2 disclosures is the broader Indian extended-producer-responsibility (EPR) regime — the Plastic Waste Management Rules 2016 (with 2022 + 2024 EPR amendments) for plastic packaging, the E-Waste (Management) Rules 2022 for electrical and electronic equipment, the Battery Waste Management Rules 2022 for all battery types, the Hazardous and Other Wastes (Management and Transboundary Movement) Rules 2016, and (at advanced policy / draft stage) the End-of-Life Vehicles framework. These are background for interpretation; the BRSR P2 disclosures themselves are governed by the SEBI BRSR Format and the Industry Standards on Reporting of BRSR Core (December 2024) circular.

This page is the reference hub for Batchwise’s coverage of P2.

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No BRSR Core KPI under Principle 2

Unlike Principles 1, 3, 5, 6, and 8 — which each have one or more BRSR Core KPIs in the reasonable-assurance set — Principle 2 has no BRSR Core KPI. All P2 disclosures are Essential or Leadership.

This places P2 in the same category as Principle 7 (Public Policy and Regulatory Process) and Principle 9 (Customer Value), both of which also have no Core KPI. The Core attributes cluster under operational ESG areas where:

• The underlying data is typically already captured in statutory / regulatory compliance systems (payroll for P3 / P5 wage and POSH metrics; environmental compliance for P6 GHG + water; RBI / NIC data for P8 small-town job creation)
• The metric is amenable to standardised methodology and reasonable-assurance procedures

P2 disclosures involve more applicability-judgement and entity-specific scoping (which products are in scope for LCA, which suppliers are in scope for the sustainable-input metric, what counts as a “sustainability-oriented” R&D project). These are still meaningful for stakeholder use — they shape the narrative around product portfolio decarbonisation and circular-economy positioning — but they are not in the Core reasonable-assurance mandate.

Entities that want third-party verification of selected P2 disclosures (for example, an externally validated LCA outcome, or limited-assurance over the R&D + capex classification) can scope this as an extended-scope assurance engagement separate from BRSR Core. This is increasingly common where investor or rating-agency expectations have anchored on a specific P2 metric.

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The Essential indicators (mandatory for every BRSR filer)

The BRSR format Section C, Principle 2 Essential indicators cover the items below — illustrative paraphrases; the SEBI BRSR format itself is the authoritative source for the exact wording and reporting structure of each indicator:

R&D + capex on sustainability-oriented technologies

The disclosure asks for the percentage of total R&D and capex investments deployed on technologies that improve the entity’s environmental and social impacts during the reporting year, plus a narrative description of the underlying projects. The classification basis (which projects count as “sustainability-oriented”) is itself a methodology decision the entity must document — common bases include:

• Project charters or capital-appropriation requests where the stated objective includes environmental impact reduction (energy efficiency, water reduction, emissions reduction, hazardous-substance substitution)
• R&D project tagging at proposal-approval stage (e.g., EV powertrain development; green chemistry projects; biodegradable packaging trials)
• Specific R&D spend on green-chemistry / green-process initiatives (relevant for chemicals, pharma, materials)

The audit-grade basis is typically a project-level register, classified by the documented criterion, reconciled to the audited financial-statement R&D + capex figures.

Procurement of sustainable inputs

The disclosure asks for the percentage of input materials sourced sustainably, with the entity defining its own sourcing-sustainability criteria — for example, recycled content in raw materials, certified sustainable sourcing (FSC for paper, RSPO for palm oil, BCI for cotton), local sourcing within a defined radius, or supplier sustainability certifications (ISO 14001, B-Corp, etc.). The criterion the entity applies should be documented and applied consistently year-on-year for comparability.

Product reclamation / take-back schemes

The disclosure asks for the volume of products and packaging reclaimed at end-of-use, by product category. Where the take-back is part of an EPR obligation (for plastic packaging, e-waste, batteries), the EPR-portal-filed certificates are the underlying evidence and the disclosure should reconcile to the certificate volumes. Where the take-back is a voluntary entity-led programme, the operational records (collection logs, transport manifests, end-of-life facility receipts) are the evidence. Disposal pathway (recycled / refurbished / energy recovery / landfill) is part of the disclosure.

Inputs sourced from MSMEs and small producers

The disclosure asks for the percentage of inputs sourced from MSMEs (per the MSMED Act 2006 classification, as revised by the MSME Development Rules 2020) and small producers (farmer producer organisations, women-led enterprises, etc.). The MSME classification basis at the supplier level is typically Udyam Registration certificate verification.

Reclamation of plastic, e-waste, and hazardous waste

For entities in scope for EPR obligations under Plastic Waste Management Rules 2016, E-Waste Rules 2022, Battery Waste Management Rules 2022, or Hazardous and Other Wastes Rules 2016 — the volumes reclaimed and the EPR certificates procured should be disclosed under P2 and reconciled with the Principle 6 narrative on waste generation and management.

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The Leadership indicators (Top 1,000 listed entities)

The Leadership indicators below are part of the BRSR format for the Top 1,000 listed entities, and voluntary for entities outside the Top 1,000.

The Leadership indicators are outside the BRSR Core KPI assurance set — since P2 has no Core KPI, P2 is entirely Essential + Leadership. The Leadership disclosures form the more detailed narrative around the entity’s product-sustainability positioning; entities can request limited-assurance procedures over selected Leadership items as an extended-scope engagement (a separate matter from the BRSR Core mandate).

Life Cycle Assessment (LCA) outcomes

For products that the entity considers material in its portfolio, the Leadership disclosure asks whether the entity has conducted LCA — and if so, the outcomes. Typical disclosure components:

• Scope — which products are covered (specific SKUs, product categories, or representative products from each category)
• Boundary — cradle-to-gate (raw materials to factory gate), cradle-to-grave (including use + end-of-life), or cradle-to-cradle (including end-of-life recycling back to raw material)
• Methodology — typically ISO 14040 / ISO 14044 (adopted as Indian Standards by BIS), or sector-specific methodologies (e.g., the Cement CO₂ and Energy Protocol for cement, the worldsteel LCA methodology for integrated steel)
• Outcome — embedded carbon, water footprint, energy intensity, or other lifecycle impact metric per functional unit of product
• Verification status — whether the LCA has been independently verified (third-party assurance against ISO 14071 or analogous)

LCA disclosure under BRSR is increasingly observed across automotive (vehicle-lifetime carbon, especially for EV vs ICE comparison narratives), capital goods (machinery lifetime impact per duty cycle), FMCG (product carbon footprint per SKU), and personal care (formulation-level water + carbon).

Product information labels

For each product category in scope, the Leadership disclosure asks whether the entity displays information on product labels covering environmental and social impacts, safe and responsible usage, recycling and disposal instructions, and where applicable, country-of-origin or supply-chain traceability information. This intersects with the Legal Metrology (Packaged Commodities) Rules 2011 statutory labelling requirements but extends beyond them for environmental and social information.

Recycling, reuse, and reclamation of products and packaging

Where the entity has set recycling or reuse targets — for example, FMCG brand-owners targeting % of plastic packaging recyclable / reusable / compostable; automotive OEMs targeting % of vehicle materials recyclable; electrical equipment manufacturers targeting % of product materials reusable in next-generation designs — these targets and progress against them are disclosed under Leadership.

Mechanism for take-back / disposal

The Leadership disclosure asks for the operational mechanism by which products are taken back from customers for end-of-life processing — typically through dealer-network return programmes, drop-off collection centres, third-party logistics partners, or direct manufacturer pick-up. Volume reclaimed and end-of-life disposition (recycled, refurbished, energy recovery, landfill) is part of the disclosure.

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How P2 disclosures interact with other principles and other regimes

P2 sits at the intersection of several other BRSR principles and several external compliance regimes:

• P6 (Environment) — waste generation, hazardous waste management, water and energy intensity. P2 take-back / reclamation volumes flow into P6 waste-management narrative. EPR-portal-filed volumes should reconcile across both principles.
• P9 (Customer Value) — product safety, complaints, post-marketing surveillance. Product-safety recalls and incidents disclosed under P9 may have P2 implications (product-design narrative on incident-driven improvements).
• EPR regimes — Plastic Packaging EPR (relevant for FMCG, packaged consumer goods, pharma packaging), E-Waste EPR (relevant for electrical / electronic equipment manufacturers), Battery EPR (relevant for battery + EV manufacturers), Hazardous Waste Rules (relevant for any entity generating hazardous waste streams), the proposed ELV framework (relevant for automotive OEMs).
• BIS standards — for product-safety, energy-efficiency, and environmental-performance labelling (e.g., BEE star ratings for appliances; CRCA / EV regulations for vehicles).
• EU CBAM (Regulation (EU) 2023/956) — relevant for Indian exporters in scope (cement, iron and steel, aluminium, fertilizers, hydrogen, electricity); product-level embedded-emissions data overlaps with P2 LCA outcomes for the same products. See BRSR for Cement for the CBAM mechanics.

The data underlying each of these regimes is commonly the same — the same product-level energy / material / emissions tracking infrastructure supports the BRSR P2 disclosure, the EPR portal returns, the EU CBAM embedded-emissions calculation, the customer-facing product-carbon-footprint labels, and the LCA outcome. Building this infrastructure once and routing the data into each downstream regime’s format is more efficient than building each disclosure separately.

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Industry-specific P2 patterns

P2 disclosures land differently across sectors. Commonly observed patterns:

• BRSR for Pharma — R&D + capex disclosure typically substantive (green chemistry, solvent substitution, biosimilars), product reclamation thin (some unused-medication take-back pilots), LCA emerging for select formulations.
• BRSR for FMCG — plastic-packaging EPR is the dominant operational compliance overlay; product reclamation primarily via packaging take-back; LCA increasingly applied per SKU; recyclability + PCR targets commonly disclosed.
• BRSR for Cement — R&D capex typically modest; product-sustainability narrative anchors on clinker-substitution + Alternative Fuel Ratio (these also reduce Scope 1 process / energy emissions under P6); LCA aligned with WBCSD CSI methodology.
• BRSR for Manufacturing — R&D + capex substantial for automotive (EV development), electrical (high-efficiency motors), and capital goods (energy-efficient machinery); E-Waste / Battery / ELV EPR overlays heavy for relevant product categories; LCA increasingly common for automotive (lifetime use-phase carbon) and electrical equipment.
• BRSR for Banks and NBFCs — P2 is typically less substantive (financial services have no physical product); narrative anchors on green-finance product launches, sustainable-finance frameworks, and green deposit / green bond issuance.
• BRSR for IT Services — P2 narrative anchors on green-IT product offerings (sustainability-aligned consulting + software products), R&D in clean-tech digital products, and e-waste reclamation for owned IT assets at end-of-life.

Entity-level materiality assessment always overrides sector inference — see the Materiality Assessment Walkthrough for the methodology.

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Evidence checklist for assurance preparation

For an assurance engagement that includes P2 disclosures within its scope (whether as part of an extended-scope BRSR Core engagement or a standalone P2 limited-assurance engagement), the evidence the assurance provider typically expects includes:

• R&D project register classified by sustainability-orientation criterion + reconciliation to audited R&D spend
• Capex project register classified by sustainability-orientation criterion + reconciliation to audited capex
• Supplier master tagged by sustainability-sourcing criterion (MSME registration, certification standards, recycled-content proof)
• EPR portal registration certificates + annual / half-yearly returns + procured EPR certificates for plastic packaging, e-waste, battery (as applicable)
• Product LCA reports (where conducted) including methodology document, data sources, third-party verification statement (if any)
• Take-back / reclamation operational records — collection volumes, transport manifests, end-of-life facility receipts, end-of-life disposition records
• Product information label samples + statutory labelling compliance evidence
• Hazardous waste manifests + State Pollution Control Board returns (where applicable)

See the broader Document and Evidence Requirements guide for the cross-principle evidence checklist.

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How Batchwise fits

Batchwise coordinates BRSR Core Assurance through its partner CA firm network — Core focuses on the assured Core KPIs (none under P2). For entities seeking an extended-scope engagement that includes limited assurance over selected P2 disclosures (typically the R&D + capex classification or a specific LCA outcome), Batchwise coordinates this as an add-on scope with the partner CA firm.

For entities in scope for value-chain ESG disclosures (top 250 listed entities, comply-or-explain from FY 2024–25), BRSR Value Chain Verification covers the upstream supplier cohort that crosses the 75% / 2% materiality thresholds — much of the value-chain ESG data underlying P2 sustainable-input disclosures lives in this same engagement.

See also: BRSR Core glossary entry, Value Chain Disclosure glossary entry, and the NGRBC Principles to BRSR Metric Mapping reference for the cross-principle map.