The Securities and Exchange Board of India (SEBI) has been a pioneer in the development of ESG reporting in India. In 2012, SEBI introduced the Business Responsibility Report (BRR) as a mandatory ESG reporting framework for the top 100 listed companies in India by market capitalization. The BRR was a significant step forward in the development of ESG reporting in India, but it had some limitations in terms of its scope and depth.
In 2021, SEBI released the Business Responsibility and Sustainability Report (BRSR) as a new and improved Environmental, social, and corporate governance (ESG) reporting framework. The BRSR builds on the foundation of the BRR, but it also addresses some of the limitations of the BRR. The BRSR is a more comprehensive ESG reporting framework, covering a wider range of ESG topics and providing more depth of reporting. The BRSR is also more aligned with international ESG reporting standards, such as the Global Reporting Initiative (GRI).
Highlights of BRSR:
Thrust to maximizing business impact: The new disclosure requirements are of a mandatory nature and will enable companies to redefine their corporate purpose with an enhanced focus on environmental, social and governance dimensions. This will help companies to maximize their business impact and create long-term value for all stakeholders.
Linkages with Global Reporting Standards/Annual Report: The listed companies can now cross-reference their sustainability reports with internationally accepted disclosure parameters as set out under GRI, SASB, TCFD, etc. This will help to ensure that the disclosures are consistent with global standards and that investors can compare the performance of different companies on a like-for-like basis.
Emphasis on training and awareness: The new format lays emphasis on the importance of imparting adequate awareness and training sessions on aspects such as employee health and safety measures, anti-corruption issues and upskilling of workforce. This will help to create a more sustainable and responsible workplace and promote good governance practices.
Environmental and Social Assessment related disclosures: The new reporting format seeks disclosures with respect to any Environmental or Social Impact Assessments carried out by the listed companies in compliance with relevant laws. This will help to ensure that companies are aware of the potential environmental and social impacts of their activities and are taking steps to mitigate these impacts.
Benefits of the BRSR:
Improved transparency and comparability of ESG disclosures: The BRSR is a more comprehensive and standardized ESG reporting framework, which will help to improve the transparency and comparability of ESG disclosures in India. This will make it easier for investors and other stakeholders to compare the ESG performance of different companies.
Increased focus on material ESG issues: The BRSR requires companies to disclose information on a wider range of ESG topics, including those that are material to the company's business. This will help to ensure that companies are focused on the ESG issues that are most important to their stakeholders.
Improved alignment with international ESG reporting standards: The BRSR is aligned with international ESG reporting standards, such as the Global Reporting Initiative (GRI). This will help to ensure that Indian companies are reporting their ESG performance in a way that is consistent with international standards.
