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BRSR

Business Responsibility and Sustainability Reporting (BRSR)

BRSR stands for Business Responsibility and Sustainability Reporting. It is a framework introduced by SEBI to guide listed companies in India on how to report their Environmental, Social, and Governance (ESG) performance. The purpose of BRSR is to foster transparency, accountability, and long-term sustainability in corporate operations.

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    Objectives of BRSR Implementation

    The key objectives of implementing BRSR are:

    1. Encouraging Sustainable Business Practices: To motivate companies to adopt sustainable practices and integrate ESG considerations into their operations.
    2. Improving Transparency: To enhance the quality and comparability of non-financial disclosures across businesses.
    3. Aligning with International Standards: To ensure Indian companies align with global ESG reporting frameworks, thereby enhancing their credibility on the international stage.
    4. Building Trust with Stakeholders: To engage stakeholders effectively by providing comprehensive and transparent ESG data.

    Applicability of BRSR

    Starting from the financial year 2022-23, SEBI mandates that the top 1,000 listed companies (by market capitalization) submit BRSR reports as part of their annual filings. The phased implementation timeline for BRSR disclosures is as follows:

    • FY 2023-24: Top 150 listed companies
    • FY 2024-25: Top 250 listed companies
    • FY 2025-26: Top 500 listed companies
    • FY 2026-27: Top 1,000 listed companies

    In addition, SEBI encourages all listed companies to voluntarily adopt the BRSR framework, even if they do not fall within the top 1,000 by market capitalization. By voluntarily adopting BRSR, companies can demonstrate their commitment to sustainability, mitigate regulatory risks, and gain a competitive edge in the marketplace.

    BRSR Due Date

    The BRSR report must be submitted by the top 1,000 listed companies as part of their annual reports to SEBI, starting from FY 2022-23.

    BRSR Format

    The BRSR framework is divided into three key sections:

    1. General Disclosures: This section provides essential information about the company, including its business model, governance structure, legal compliance, and operations.
    2. Management and Process Disclosures: Here, companies disclose details about their internal policies, practices, and measures taken to ensure ethical business conduct, environmental responsibility, and social welfare.
    3. Principle-wise Performance Disclosures: In this section, companies report their adherence to the nine principles outlined under the National Guidelines on Responsible Business Conduct (NGRBC). These principles address critical areas such as ethical governance, employee welfare, environmental sustainability, and social impact.

    Core Principles of BRSR Reporting

    Under the BRSR framework, companies must disclose their performance in relation to the following nine principles:

    1. Ethical Governance: Companies should conduct business with integrity, ensuring transparency and accountability.
    2. Sustainable Products and Services: Companies must provide products and services that are safe, sustainable, and contribute to social good.
    3. Employee Well-being: Companies should respect and promote the well-being of their employees, including those in the supply chain.
    4. Stakeholder Engagement: Businesses must be responsive to the interests of all stakeholders, including customers, employees, and communities.
    5. Human Rights: Companies must respect and promote human rights across their operations and supply chains.
    6. Environmental Responsibility: Companies should minimize their environmental footprint and work towards restoring and protecting the environment.
    7. Public Policy Engagement: When engaging with public or regulatory policy, businesses should do so responsibly and transparently.
    8. Inclusive Growth: Companies should contribute to inclusive and equitable growth, focusing on broader societal development.
    9. Consumer Responsibility: Businesses should engage with customers in a responsible manner, ensuring their products and services add value.

    SEBI Guidelines for BRSR

    SEBI has provided detailed guidelines to ensure uniformity and transparency in BRSR reporting. These guidelines are aligned with international standards and best practices, promoting comparability and accountability. Key elements of the guidelines include:

    • Interoperability with Global Standards: BRSR aligns with global reporting frameworks such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB). This ensures that Indian companies’ sustainability reports are comparable with international standards.
    • Mandatory and Voluntary Indicators: Companies are required to report on Essential Indicators (mandatory) and Leadership Indicators (voluntary). Essential indicators cover key ESG issues like environmental impact, employee welfare, and community engagement. Leadership indicators include advanced sustainability metrics, such as greenhouse gas emissions and detailed energy use.
    • Comprehensive Environmental Reporting: Companies must disclose data on energy consumption, greenhouse gas emissions, water usage, and waste management, providing a clear picture of their environmental impact.
    • Social and Governance Reporting: Companies are required to report on employee health and safety, diversity and inclusion, human rights practices, and community engagement efforts.
    • Sector-Specific Exemptions: Some disclosures may not apply to certain industries. In such cases, companies are allowed to state that specific disclosures are not applicable and provide justification for the exemption.
    • Clear and Concise Disclosures: Companies must ensure their responses are clear, concise, and well-documented, with links to relevant information if available.

    Conclusion

    BRSR reporting marks a pivotal step toward promoting sustainable business practices and enhancing ESG transparency in India. For companies, it goes beyond being a regulatory obligation—it’s an opportunity to showcase leadership in responsible business practices, attract conscientious investment, and build trust with stakeholders. As global attention on sustainability grows, companies adopting BRSR will be better positioned to address future challenges, gain a competitive advantage, and contribute to a more sustainable future.

    In a world where sustainability is increasingly linked to long-term success, BRSR reporting provides companies with a unique opportunity to not only strengthen their market standing but also create meaningful value for society and the environment.

    Don’t hesitate to reach out if you need assistance with the conversion process or have any related questions.