Overview of BRSR Reporting in India
In 2021, The Securities and Exchange Board of India, under the Environmental, Social and Governmental Perspective, launched the business responsibility and sustainability report replacing the Business Responsibility Report that applies to the top 1000 enlisted companies according to the market capital to facilitate more transparency and better identification and analysis of sustainability associated opportunity and risks.
Further, According to the latest circular of SEBI (The Securities and Exchange Board of India), the company has been provided time to adapt to the latest guidelines relating to BRSR Reporting in India, where the reporting is made voluntary for the financial year 2021-2022 and on a mandatory basis from 2022-2023. BRSR Reporting in India is an initiative to ensure investors have access to Standardized disclosures on ESG (Environmental, Social and Governmental) standards.
Overview of SEBI
SEBI (The Securities and Exchange Board of India) is a statutory body and a market regulator which controls the securities market in India. The essential functions of the SEBI are to protect investors’ interests in securities and promote and regulate the securities market. Its board of members runs it.
The Securities and Exchange Board of India regulates and monitors the stock exchange, guarantees the security of their investments, and protects the rights of investors and stakeholders. It further ensures the safety and supply of precise and accurate information from investors. SEBI examines the trading of stocks and safes the security market from misconduct. It provides education regarding the market to investors to enhance their knowledge.
Importance of BRSR Reporting in India
BRSR Reporting is important in many ways for the business owners as well as the authorities like: -
- Better Market Standing
According to recent market analysis reports, businesses that implement the practice of BRSR Reporting in India as their objective and core principle have been more profitable than their opponents.
- Better Market Share
Several businesses have realized or are realizing that making investments in environmental and social concerns would not only improve their business permanence but will also offer them a benefit over opponents and clients, as well as pave the way for new markets.
- Attracting Investor Funding
Currently, Stockholders are becoming more conscious of the market overview of the businesses with sustainable planning and BRSR reporting in India and their influence on the customer, which makes them more motivated to finance companies that include this strategy.
- Social License to Operate
Due to increasing consciousness among Communities and Consumers, the liability on the businesses to satisfy their accountabilities under BSRS Report in India.
- Attracting Better Employment
Employers with determination and accountable behaviour are progressively widely held among employees to attract a better workforce.
Environmental, Social, and Governance (ESG) is a policy that is used to define a set of non-financial values a company instils in their functioning for better ethical practices, social responsibility, governance, and environment-friendly measures. Environmental, Social, and Governance is the report framed by these businesses on social, environmental, and governance issues. The report is intended to provide a glimpse of the business's influence in these three areas for stockholders.
Responsibilities in BRSR Reporting in India
The responsibilities/pillars that come under ESG that are also needed for BRSR Reporting in India
Key Differences between BRSR Reporting in India and BRR
The study conducted by the Indian Institute of Corporate Affairs in collaboration with the United Nations Children’s Fund in 2018 concluded the weakness in accuracy and clarity in information provided by companies upon which the BRSR reporting in India was framed. The key improvements introduced by the Indian Institute of Corporate Affairs in BRSR.
- Essential and leadership indicators
The section relating to the information is divided into two categories that are mandatory and voluntary disclosures. Per the Ministry Corporate Affairs Committee Report, for the financial year 2022-2023, the details needed under the leadership category are expected to be moved to the necessary classification to track the progress of disclosures and change towards a complete reporting format.
- Ministry of Corporate Affairs 2021 online portal
As per the Committee Report, BRSR will be incorporated with reporting under the Companies Act, 2013, and Business Responsibility and Sustainability Report will be in the method of an annual report as well as an admission on the Ministry of Corporate Affairs 2021 Centralised online portal in XBRL (Extensible Business Reporting Language) format.
- BRSR Lite
The Ministry Corporate Affairs Committee Report allows smaller unlisted companies below a specific limit to implement a lite format voluntarily to make it easier for them to initiate reporting on environmental sustainability-related matters.
- More quantitative disclosures
The mandatory information is authorized to become straightforward and more precise for better measurable disclosures under principle-wise pointers. This delivers all-inclusive and granular-level information.
- Availability of a guiding manual
The Ministry Corporate Affairs Committee Report includes a guidance note on the definition and interpretation of the scope of each question/KPI to aid companies in filling the Business Responsibility and Sustainability Report questionnaire.
- Business Responsibility Sustainability Index
The Ministry Corporate Affairs Committee Report also evaluates the growth of a Business Responsibility Sustainability Index to regard the accountable business behaviour of companies.
- Incorporation of value chain partners
According to the conclusion of the study conducted by the Indian Institute of Corporate Affairs in collaboration with the United Nations Children’s Fund in 2018, the weakness in accuracy and clarity in information provided by companies upon which the BRSR reporting in India was framed. Therefore Business Responsibility and Sustainability Report comprise quite a lot of questions that seek out information on the business’s assessment chain and its stakeholders.
- SDG’s (Sustainable Development Goals) mapping
The Ministry Corporate Affairs Committee Report explores connections between the National Guidelines on Responsible Business Conduct principle and the Sustainable Development Goals. Business Responsibility and Sustainability Report is aligned with the SDGs so companies can validate their performance on Sustainable Development Goals targets.
Structure of BRSR Reporting
BRSR Reporting in India uses more specific and quantifiable metrics than the BRR format. The report is divided into three parts.
- Section A: General Disclosures: In the First section of the Business Responsibility and Sustainability Report, basic details of the business and other relevant information must be provided. Particulars of the products and services, employees, subsidiaries, operations of the entity, holding, CSR (Corporate Social Responsibility), associate companies, and information on the compliances are given in this section.
Details of the listed entity
- CIN (Corporate Identity Number) of the mentioned Entity
- Name of the Listed Entity
- Year of Company incorporation
- Registered company’s address
- Corporate address
- E-mail address
- Telephone number
- Website link
- Reporting year (Financial year)
- Name of the Stock Exchange where shares are listed
- Capital that is paid
- Name and contact details like telephone and email address of the person who may be contacted in an instance of any enquiries on the Business Responsibility and Sustainability Report
- Reporting boundary - Are the disclosures made on a consolidated basis (i.e., for the unit and all the units which form a part of its combined financial statements, taken together) or standalone basis (i.e., only for the unit)
- Section B: Management and Process Disclosures: This part of the Business Responsibility and Sustainability Report reporting in India centres on the processes and policies relating to the NGRBC (National Guidelines on Responsible Business Conduct) principles to comprehend whether the business has taken actions to safeguard responsible business conduct.
- Section C: Principle-Wise Performance Disclosures: Under this section, the information that is required by the authorities is pretty elaborative and detailed where the company has to furnish information regarding its performance related to nine principles of National Guidelines on Responsible Business Conduct. This segment is further split into two parts, an ‘essential’ section and the 'leadership' section.
Documents Needed to Prepare a BRSR Reporting in India
The mandated documents for BRSR reporting in India-
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