Transforming through Business Responsibility and Sustainability Reporting

Published on February 19, 2024 by Paritosh Singha

In the dynamic landscape of corporate responsibility, Business Responsibility and Sustainability Reporting (BRSR) has emerged as a powerful tool, shaping the way businesses operate and contribute to a sustainable future. This blog delves into the significance of BRSR and its profound impact on encouraging sustainable business practices.

Understanding BRSR

BRSR is more than just a regulatory requirement; it is a strategic initiative that enables organisations to transparently communicate their commitment to responsible business practices. BRSR goes beyond financial metrics, encompassing environmental, social and governance (ESG) factors that are integral to an organisation's overall performance.

India has seen a significant shift in its corporate reporting landscape in recent years, moving from previous reporting formats such as business responsibility reports (BRRs) and corporate social responsibility (CSR) to the current BRSR framework. This evolution reflects the country’s growing commitment to sustainable business practices and its efforts to align with international standards.

Regulatory milestones

2009: The Ministry of Corporate Affairs (MCA) issues the National Guidelines on Responsible Business Conduct (NGRBC). These voluntary guidelines encourage organisations to adopt responsible business practices and report on their social and environmental impact.

2012: The Securities and Exchange Board of India (SEBI) mandates BRRs for the top 100 listed companies by market capitalisation. This was a significant step towards mandatory ESG disclosure in India.

The shift to BRSR

2019: The SEBI appoints a committee to review the BRR framework and recommend improvements. The committee recognises the need for a more comprehensive and standardised reporting framework.

2021: The SEBI introduces the BRSR framework, replacing the BRR framework. BRSR is made mandatory for the top 1,000 listed companies by market capitalisation and applies to financial years from April 2022.

What's new in BRSR?

Compared to BRR, BRSR introduces several key improvements:

Comprehensive scope: BRSR covers a wider range of sustainability topics, including ESG and human rights issues.

Quantitative metrics: BRSR requires organisations to disclose quantitative metrics on their sustainability performance, allowing for better comparison across companies.

Alignment with international standards: BRSR is aligned with international reporting frameworks such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), making it easier for Indian organisations to integrate global sustainability initiatives into their reporting.

Assurance requirements: BRSR mandates independent assurance for some of the disclosures, enhancing the credibility of the reported information.

Benefits of BRSR

Increases transparency and accountability: BRSR encourages organisations to be more transparent about their sustainability performance, leading to greater accountability to stakeholders.

Improves risk management: By identifying and disclosing ESG risks, BRSR helps organisations better manage these risks and improve their long-term performance.

Enhances investor confidence: Robust ESG disclosure can attract investors increasingly looking for sustainable investment opportunities.

Promotes sustainable business practices: BRSR can help drive a shift towards more sustainable business practices in India, contributing to a more sustainable future for all.

Conclusion

BRSR is not just a compliance exercise; it is a transformative journey towards a sustainable future. Organisations that embrace this reporting framework position themselves as leaders in responsible practices, driving positive change in the business world and beyond. As we navigate the challenges of the 21^st century, BRSR is a beacon, guiding organisations towards a future where economic success is intertwined with social and environmental responsibility.

How Acuity Knowledge Partners can help

Our streamlined reporting solutions bolster organisations' BRSR processes. Leveraging our capabilities, organisations could efficiently gather, organise and present key materiality matrices, ensuring adherence to reporting standards. They would also enhance transparency, meet regulatory requirements and effectively communicate their commitment to responsible business practices to stakeholders.

Sources:

• Securities and Exchange Board of India – BRSR: https://www.sebi.gov.in/sebi_data/commondocs/may-2021/

• National Guidelines on Responsible Business Conduct: https://www.mca.gov.in/Ministry/pdf/NationalGuildeline_15032019.pdf

• Global Reporting Initiative: https://www.globalreporting.org/

• Sustainability Accounting Standards Board: https://sasb.org/

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