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BRSR: Guide to SEBI ESG Reporting

The Business Responsibility and Sustainability Reporting (BRSR) framework, mandated by SEBI for the top 1,000 listed companies in India, requires disclosures on Environmental, Social, and Governance (ESG) initiatives. Introduced to enhance transparency and responsible business practices, BRSR aims to provide standardized ESG information to investors, facilitating better investment decisions. The reporting is mandatory from FY 2022-23, with voluntary compliance encouraged for the previous fiscal year.

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8 views18 pages

BRSR: Guide to SEBI ESG Reporting

The Business Responsibility and Sustainability Reporting (BRSR) framework, mandated by SEBI for the top 1,000 listed companies in India, requires disclosures on Environmental, Social, and Governance (ESG) initiatives. Introduced to enhance transparency and responsible business practices, BRSR aims to provide standardized ESG information to investors, facilitating better investment decisions. The reporting is mandatory from FY 2022-23, with voluntary compliance encouraged for the previous fiscal year.

Uploaded by

envca12
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

6/8/24, 3:11 PM BRSR | All about SEBI Corporate Reporting Framework | Updated

Independent Assurance
Of BRSR, ESG & Sustainability Reports

FAQ | BRSR – All You Wanted To


Know About SEBI Guided ESG
Reporting
Consultivo Blog | Social & Sustainability | BRSR

All you wanted to know about BRSR


In India, the top 1,000 listed companies are required
to furnish a Business Responsibility Report (BRR) to
the stock exchanges as a part of their annual
reports. The BRR comprises the initiatives taken by
the companies from an Environmental, Social and
Governance (ESG) perspective, in the Securities and
Exchange Board of India (SEBI) prescribed format.
SEBI amended certain provisions of the SEBI LODR
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 through a notification dated 5 May
2021 and the requirement of BRSR has come into
picture.

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Being one of the leading ESG consulting firms,


Consultivo technical team receives several queries;
and the research team has listed many of them
under this FAQ section.

What you will find here

What is BRSR or Business Responsibility and Sustainability


Reporting?

How did BRSR come into existence?

Is BRSR Mandatory?

Basis of BRSR

What are the benefits of BRSR?

Is BRSR applicable for all companies?

Are unlisted companies covered under BRSR requirements?

What are the steps to be followed by aspiring companies?

International movements on ESG Reporting

Compatibility of BRSR with other reporting frameworks

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What is BRSR or Business


Responsibility and Sustainability
Reporting?

BRSR full form is Business Responsibility and


Sustainability Reporting. SEBI introduced the BRSR
framework, mandating certain listed companies to
disclose their ESG related information as a mandatory
process. The BRSR framework aims to enhance
transparency and encourage companies to adopt
responsible and sustainable business practices.
At present, BRSR or Business Responsibility and
Sustainability Reporting is mandated for the top 1000
listed companies (by market capitalisation) in India.

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BRSR is not merely presenting the data collected, but an


approach to drive an organization’s commitment to
sustainability, and demonstrate it to the interested parties
in a transparent manner.
The BRSR is an initiative towards ensuring that investors
have access to standardized disclosures on ESG
parameters. Access to relevant and comparable
information will enable investors to identify and assess
sustainability-related risks and opportunities of
companies and make better investment decisions. At the
same time, companies will be able to better demonstrate
their sustainability objectives, position, and performance
resulting in long-term value creation.
Overall, higher standards of ESG disclosures and
transparency will help in attracting more capital and
investment.
The BRSR seeks disclosures from listed entities on their
performance against the nine principles of the ‘National
Guidelines on Responsible Business Conduct’ (NGBRCs)
and reporting under each principle is divided into
essential and leadership indicators. The essential
indicators are required to be reported on a mandatory
basis while the reporting of leadership indicators is on a
voluntary basis.
Listed entities should endeavor to report the leadership
indicators also.

How did BRSR come into


existence?

Sustainability Reporting is an overview of a company’s


economic, environmental and social impacts, caused by
its business process. It ensures that the organizations

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consider their impacts on sustainability issues and


enables them to be transparent about the risks and
opportunities they face. Further, governmental regulation
on environment, social and governance (ESG) issues have
heightened to protect the rights of citizens and the
environment.
SEBI was one of the early adopters of sustainability
reporting for listed entities amongst its global peers. The
filing of the BRR containing ESG (Environment, Social and
Governance) disclosures was first introduced for listed
entities in 2012.
In November 2018, the Ministry of Corporate Affairs (MCA)
constituted a Committee on Business Responsibility
Reporting for finalizing Business Responsibility Reporting
formats for listed and unlisted companies, based on the
framework of the National Guidelines for Responsible
Business Conduct’ (NGRBCs).
In August 2020, the Committee addressed various aspects
and issues that could improve the quality and utility of
disclosures and recommended Business Responsibility
and Sustainability Reporting (BRSR) as an update on the
existing Business Responsibility Reporting (BRR) to
incorporate the current global practices in non-financial
sustainability reporting based on the NGRBCs.

Is BRSR Mandatory?

As per SEBI Circular on “Business Responsibility and


Sustainability Reporting by listed entities”, the BRSR shall
be applicable to the top 1000 listed entities (by market
capitalization).

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BRSR has found its way into the regulatory provisions by


way of an amendment to the Regulation 34(2)(f) of the
Listing Regulations, notified on 5th May 2021. Further,
SEBI vides circular dated 10th May 2021 introduced the
format of BRSR and the guidance note to enable the
companies to interpret the scope of disclosures.
In order to give time to companies to adapt to the new
requirements, the reporting of BRSR shall be voluntary for
FY 2021 – 22 and mandatory from FY 2022 – 23.
However, companies are encouraged to be early adopters
of the BRSR, thus being at the forefront of sustainability
reporting.

Basis of BRSR

Basis of reporting requirements under BRSR

The base document behind which the BRSR has evolved


is the extant BRR and National Guidelines on
Responsible Business Conduct (NGRBC) principles,
which itself emanates from Social Development Goals
(SDGs).
SDGs by the United Nations are the backbone of the
Principles of the NGRBC, each of the 9 Principles which
forms the very root of the BRSR reporting has been
aligned with the 17 SDGs.

What are the benefits of BRSR?

The MCA report objectifies BRSR to serve as “a single


comprehensive source of non-financial sustainability
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information relevant to all business stakeholders –


investors, shareholders, regulators, and public at large.”

Is BRSR applicable for all


companies?

Applicability of Business Responsibility and Sustainability


Reporting BRSR Reporting under the new requirements
of Business Responsibility and Sustainability Reporting
has been made mandatory for the top 1,000 listed
companies by market capitalization from FY 2022-23
onwards.
Other companies can voluntarily submit BRSR effective
2021-22.
For the purpose of determining the applicability of the
requirement, the market capitalisation would be
calculated as on 31 March of every financial year.

Are unlisted companies covered


under BRSR requirements?

Business Responsibility and Sustainability Reporting and


unlisted companies
As per the MCA committee recommendation, the
reporting requirement may be extended by MCA to
unlisted companies based on specified thresholds of
turnover or paid-up capital.

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Further, the committee recommends that on a voluntary


basis, smaller unlisted companies below this threshold
limit may adopt a lite version of the format.
Two formats for disclosures are available; a
comprehensive format for listed companies; and a lite
version for unlisted companies, in case it is extended to
them.

What are the steps to be followed


by aspiring companies?

Companies who are mandated to comply with SEBI BRSR


reporting requirements need to invest in necessary
mechanisms which could help in the following aspects:

Selection of the relevant and applicable ESG requirements


material to the organization

Enable capturing the required data for reporting on the selected


ESG issues

Selection of a suitable framework and related metrics that can be


adopted by companies to facilitate transparent and accurate
reporting

Level of assurance to be provided on such reporting

As an Independent Sustainability and ESG Consulting


Firm, Consultivo offers complete Communication and
Disclosure solutions for Corporate Reporting that
includes GRI Based Sustainability Reporting, SEBI
Business Responsibility and Sustainability Report, ESG
Reporting, CSR Reporting, Sustainability
Communication Report and other Custom Built
Reports.
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International movements on ESG


Reporting

Governments of several countries have introduced


disclosures on sustainability reporting. Countries like
Denmark, South Africa, China, Malaysia, and Philippines
require certain companies to make disclosures in relation
to their non-financial performance across ESG aspects.
EU Non-Financial Reporting Directive is one of the most
significant EU-wide legislative initiatives to promote
sustainability reporting. Climate change related reporting
is prevalent in Australia, Mexico, USA, and in France. The
Modern Slavery Act, first enacted by the UK in 2015 and
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more recently by Australia, asks each company to report


on modern slavery not just in its operations but also in its
global supply chains, thereby including many SMEs in
emerging markets.
International investors with global investment portfolios
are increasingly calling for high quality, transparent,
reliable, and comparable reporting by companies on
climate and other environmental, social and governance
(ESG) matters.
On 3 November 2021, the IFRS Foundation Trustees
announced the creation of a new standard-setting board
—the International Sustainability Standards Board (ISSB).
The ISSB will benefit from the consolidation of global
bodies (Climate Disclosure Standards Board – CDSB,
International Integrated Reporting Council – IIRC and
Sustainability Accounting Standards Board – SASB) – as
well as the support of International Organization of
Securities Commission – IOSCO, Task Force on Climate-
related Financial Disclosures – TCFD and World Economic
Forum – WEF). Together they share the aim of enterprise
value-focused sustainability disclosures.
The World Economic Forum has also released a set of
universal ESG metrics and disclosures that companies can
report on. These metrics and disclosures are aligned with
the UN SDGs: Principles of governance, planet, people,
and prosperity.

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Compatibility of BRSR with other


reporting frameworks

Companies preparing and disclosing sustainability reports


based on internationally accepted reporting frameworks
such as GRI, SASB, TCFD, are allowed to cross refere the
disclosures made under such framework to the
disclosures sought under [Link] may leverage
existing disclosures to avoid repetitions.
Mandatory reporting under BRSR shall not restrict
companies from making extensive disclosures in their
annual reports voluntarily through integrated reporting or
other sustainability report frameworks.

Let's discuss

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Name

Organisation

email

Contact number

Submit

If you have any queries or would like to discuss your


requirements with Consultivo technical team, feel free to contact
us at esg@[Link] or WA +91 98311 45556

Share this post

Category: Blog
Tags: Social & Sustainability, Sustainability Reporting, BRSR |
Business Responsibility and Sustainability Reporting

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About the author

SAIKAT BASU
CEO at Consultivo

Saikat Basu is a long time sustainability and risk


management professional and entrepreneur. He is
having a diversified exposure to various
management practices in the areas of strategic
leadership, organisation excellence, financial
management and people engagement. He has
worked intensively with 200+ national and
international standards on responsible business.
He is a member of several sustainability (SHE

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Award, Environmental Excellence, Social Impact)


award program design & jury committee. He is a
passionate blogger and visiting faculty in
academics.
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Common questions

Powered by AI

BRSR impacts investment decisions positively by providing investors with access to structured, comparable, and relevant ESG information. This detailed transparency allows investors to make well-informed decisions regarding sustainability-related risks and opportunities associated with a company. As a result, companies with strong ESG disclosures are likely to attract more investment, as they demonstrate long-term value creation and commitment to sustainable practices, thereby potentially attracting more capital and fostering investor trust .

Unlisted companies face several challenges in adopting BRSR-like sustainability reporting, including lack of regulatory mandates, resources, and knowledge about ESG issues. However, opportunities lie in voluntary adoption, which could enhance their market reputation, investor confidence, and potentially prepare them for future regulatory requirements. Adoption can also help in aligning their operations with global sustainability standards, paving the way for better stakeholder engagement and potential access to more diverse capital sources .

To align with BRSR requirements, aspiring companies should first conduct a gap analysis to identify where their current practices fall short of BRSR standards. They should then develop robust data collection and management systems for accurate ESG reporting. Training initiatives should be implemented to raise awareness and build technical capabilities among staff. Engaging stakeholders and developing a clear communication strategy for sustainability efforts are also crucial steps. Lastly, integrating sustainability into the corporate governance framework ensures long-term adherence to BRSR standards .

Early adoption of BRSR can benefit companies by positioning them as leaders in sustainability, enhancing their brand reputation and investor appeal. It allows companies to build robust ESG reporting processes before the mandatory deadline, mitigating any negative impacts of rushed compliance. Early adopters can also drive organizational learning, identify potential areas of improvement, and capitalize on sustainability-related opportunities more swiftly, ultimately fostering long-term value creation and competitive advantage .

SEBI plays a critical role in enhancing ESG transparency by introducing reporting frameworks like BRSR, which standardize disclosure requirements for ESG factors. By mandating BRSR for the largest listed companies, SEBI ensures that significant market players provide investors with essential ESG information, facilitating risk assessment and investment decision-making. SEBI's proactive approach in aligning BRSR with global standards places Indian companies on a competitive international footing, fostering an investment-friendly environment focused on sustainability .

The primary objective of the BRSR framework is to enhance transparency and accountability in corporate ESG reporting. It seeks to ensure that investors have standardized and comparable disclosures on Environmental, Social, and Governance (ESG) parameters to identify and assess sustainability-related risks and opportunities, thus aiding in better investment decisions. Additionally, BRSR aims to promote responsible and sustainable business practices among companies and demonstrate commitment to sustainability in a transparent manner .

BRSR can significantly influence corporate culture by embedding sustainability into core business strategies. By mandating disclosure of ESG practices, companies are encouraged to not only focus on financial performance but also consider their environmental and social impacts. This shift promotes a culture of responsibility, change management, and continuous improvement, aligning business operations with sustainable development goals and making employees more aware and engaged with sustainability matters .

BRSR is compatible with various international ESG reporting frameworks such as GRI, SASB, and TCFD, allowing companies to cross-reference their disclosures. This compatibility enables multinational companies operating in India to streamline their reporting processes and avoid redundancy by leveraging existing international disclosures when preparing their BRSR reports. Consequently, it reduces the administrative burden and fosters a cohesive approach to global sustainability reporting standards .

BRSR aligns with global sustainability practices by mandating disclosures based on the National Guidelines on Responsible Business Conduct (NGBRC), which themselves are aligned with international frameworks such as the Sustainable Development Goals (SDGs). This alignment ensures that BRSR incorporates global standards for non-financial reporting, thus enhancing the relevance and comparability of Indian corporate sustainability disclosures on a global scale .

From FY 2022-23, BRSR becomes mandatory for the top 1000 listed entities by market capitalization, requiring them to provide standardized ESG disclosures. This regulatory requirement demands these companies to report their performance against NGBRC principles, with both essential (mandatory) and leadership (voluntary) indicators, thereby significantly increasing their reporting obligations. It also compels them to align their sustainability reporting with broader, internationally recognized frameworks to demonstrate accountability and transparency .

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