India, as one of the largest and fastest-growing economies in the world, has set ambitious goals to mitigate the impacts of climate change. One such goal is achieving a net-zero emissions target by 2070. In line with this goal, the Securities and Exchange Board of India (SEBI) has mandated the top 1,000 listed companies in India to report on their sustainability and social responsibility practices through the Business Responsibility and Sustainability Report (BRSR). This mandate aims to enhance transparency and disclosure of ESG-related information and promote sustainable development in India.
1. What is the Business Responsibility and Sustainability Report (BRSR)?
The Business Responsibility and Sustainability Report (BRSR) is a reporting framework developed by the Securities and Exchange Board of India (SEBI) for the top 1,000 listed companies in India. It requires these companies to report on their sustainability and social responsibility practices.
2. What are the objectives of the BRSR?
The objectives of the BRSR are to encourage companies to adopt responsible business practices, to enhance transparency and disclosure of ESG (Environmental, Social, and Governance) related information, and to promote sustainable development.
3. Who needs to file the BRSR report?
The BRSR report is mandatory for the top 1,000 listed companies in India. This includes all listed companies on the BSE and NSE stock exchanges.
4. What are the key components of the BRSR report?
The BRSR report requires companies to report on various sustainability and social responsibility parameters. These parameters include environmental impact, social and community development, governance and ethics, human rights, labour practices, product responsibility, and customer satisfaction.
The National Guidelines on Responsible Business Conduct comprises nine thematic pillars of business responsibility that are known Principles. These are as follows:
- Principle 1: Businesses should conduct and govern themselves with integrity and in a manner that is ethical, transparent and accountable.
- Principle 2: Businesses should provide goods and service in a manner that is sustainable and safe.
- Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains.
- Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders.
- Principle 5: Businesses should respect and promote human rights.
- Principle 6: Businesses should respect and make efforts to protect and restore the environment.
- Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
- Principle 8: Businesses should promote inclusive growth and equitable development.
- Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner.
5. When is the deadline for filing the BRSR report?
The deadline for filing the BRSR report is within five months from the end of the financial year. For example, for the financial year 2022-23, the BRSR report would be due by August 31, 2023.
6. What are the benefits of filing the BRSR report?
Filing the BRSR report can help companies to enhance their reputation, attract socially responsible investors, and mitigate ESG-related risks. It can also help companies to identify areas where they can improve their sustainability and social responsibility practices.
7. What are the consequences of non-compliance with the BRSR requirement?
Non-compliance with the BRSR requirement can result in penalties and fines imposed by SEBI. It can also damage the reputation of the company and reduce investor confidence.
8. Can companies use external standards or frameworks to report on their sustainability and social responsibility practices?
Yes, companies can use external standards or frameworks such as GRI (Global Reporting Initiative) or SASB (Sustainability Accounting Standards Board) to report on their sustainability and social responsibility practices. However, they must also comply with the BRSR requirements.
9. How can companies prepare for filing the BRSR report?
Companies can prepare for filing the BRSR report by conducting a comprehensive ESG assessment, engaging with stakeholders, and developing a sustainability strategy. They can also seek the assistance of external consultants or ESG reporting platforms.
10. How can investors use the information in the BRSR report?
Investors can use the information in the BRSR report to assess the ESG performance of companies and make informed investment decisions. They can also engage with companies on ESG-related issues and advocate for improved sustainability and social responsibility practices.
Getting ready for BRSR
The recent Business Responsibility and Sustainability Reporting (BRSR) reforms in India have made it mandatory for companies to take a more comprehensive approach to social and environmental responsibility. Therefore, it is imperative for businesses to prioritise transparency, stakeholder engagement, and maximum accuracy in their BRSR reporting to comply with the regulations.
At Achilles, we provide comprehensive ESG risk management services, including in-person audits, to ensure supply chain transparency and SEBI compliance for listed companies in India from FY22-23. Contact us to learn more about our wider ESG reporting and assessment solutions.
