Blog on “ESG compliance for Indian subsidaries” by CMA Sudeepto Saha

Bizsol Thinkline / By

EU Sustainability Reporting reach Indian Subsidiaries of European companies

European ESG mandates now reach far beyond Europe. Under the EU’s new Corporate Sustainability Reporting Directive (CSRD) and the related European Sustainability Reporting Standards (ESRS), large EU and non-EU parent companies must disclose detailed sustainability data for their entire corporate groups. In practice, Indian subsidiaries of EU-headquartered firms are expected to feed data into these group reports. Local finance teams will need to gather metrics on climate (GHG) emissions, energy and water use, waste, workforce composition, labor practices, and governance policies – all in formats prescribed by ESRS. For example, an ESRS report covers 12 categories (climate, pollution, water, biodiversity, resource use, workforce, communities, etc.). In other words, even if the Indian unit itself is not obliged to report, it will be asked by its EU parent to supply ESG data for consolidation.

What This Means for Indian Finance Teams

Even if an Indian unit isn’t directly obligated to report, its EU parent will require ESG data for group-level consolidation. Local finance teams must now gather metrics on:

  • Environmental: GHG emissions, energy and water use, waste
  • Social: Workforce composition, labor practices, health and safety
  • Governance: Board structure, ethics policies

These must align with ESRS formats, which span 12 categories including climate, pollution, biodiversity, and communities.

Key ESG Data and Reporting Processes

ESRS prescribes double materiality reporting: how the business impacts people and planet and how ESG factors affect the business. This means data collection spans environmental metrics (e.g. Scope 1, 2 and 3 emissions, energy use, water, waste, pollution) as well as social metrics (e.g. workforce diversity, health and safety, labor rights) and governance metrics (e.g. board composition, ethics processes). Local teams often rely on multiple systems (ERP, HR, HSE logs) and new data-collection tools. Best practice is to implement ESG software and clear processes so that data (e.g. emissions logs, HR reports, supply-chain questionnaires) is captured consistently. Finance departments will then integrate this data into the corporate sustainability report, which under ESRS must be independently assured by auditors. (Indeed, the regulations mandate limited assurance at minimum.) In short, collecting this data is a major project: accurate recording and internal controls are needed before external verification.

Common Challenges for Indian Subsidiaries

  • Complex new requirements: ESRS templates cover hundreds of data points. Finance teams with little ESG experience can be overwhelmed deciphering them.
  • Heavy data burden: Gathering valid metrics (like full carbon footprints or detailed labor data) is resource-intensive and technically challenging.
  • Limited resources and tools: Few midsize subsidiaries have dedicated ESG staff or integrated systems. Often finance teams juggle sustainability data in spreadsheets, lacking automated tracking.
  • Governance gaps: Reporting requires cross-functional coordination, but sustainability is sometimes seen as an “HQ task.” Clear roles, training and senior-level buy-in are often missing at first.

Strategic Stakes and Compliance Risks

Strategic Stakes and Compliance Risks

Moreover, in industries like automotive or pharmaceuticals, supply-chain sustainability is a de facto requirement. EU HQs in these sectors demand detailed ESG data from every plant or supplier. Indeed, ESRS guidance warns that “companies without [sustainability] data risk being excluded from supply chains” where digital data exchange becomes the norm. In other words, a well-prepared subsidiary gains business credibility, while laggards face competitive risk.

Finance leaders shouldn’t go it alone on ESG reporting. Compliance with CSRD/ESRS requires specialized knowledge, robust processes and trained personnel.

How Bizsolindia Can Help

Bizsolindia’s sustainability and financial reporting experts can help your subsidiary set up data collection frameworks, interpret ESRS requirements, and align with global disclosure processes.

Contact us today to build the ESG reporting capabilities , we will be happy to support you on this journey.

📩 Contact us at Sudeepto.saha@bizsolindia.com to build your ESG reporting capabilities.

References: Official CSRD/ESRS guidance and industry analyses.

Click here for Summary document on ESG compliances