{"id":45608,"date":"2022-07-25T12:34:51","date_gmt":"2022-07-25T07:04:51","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=45608"},"modified":"2022-07-25T12:45:27","modified_gmt":"2022-07-25T07:15:27","slug":"esg-reporting-is-it-mandatory-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/esg-reporting-is-it-mandatory-in-india\/","title":{"rendered":"ESG Reporting: Is it Mandatory in India?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Addressing and managing the\nissue of climate change and environmental degradation has taken the place of\npriority among many agencies and authorities all around the world, with global\ncommunities coming together and brainstorming the methods of managing the issue\nof Climate Change. Recently conducted, the 2021 Conference of Parties (CoP26)\naddressed climate change in Glasgow, where it was ensured by the global\ncommunities while negotiating methods to control climate change that these\nmethods will not be affecting the living standards, employment, or food\nsecurity. At this conference, India also pledged that it would achieve the goal\nof net-zero emissions by 2070.<\/p>\n\n\n\n<p>To accomplish this Indian Government legislature has implemented many policies to adopt a more sustainable way of business and promote a Circular Economy, one of them being Environment, Social, and Governance (ESG) Reporting, where companies are encouraged to look for alternative methods to the traditional finance-centric model.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/esg-reporting-is-it-mandatory-in-india\/#Evolution_of_ESG_Reporting\" >Evolution of ESG Reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/esg-reporting-is-it-mandatory-in-india\/#Principles_to_be_fulfilled_under_the_ESG_report\" >Principles to be fulfilled under the ESG report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/esg-reporting-is-it-mandatory-in-india\/#CSR_Reporting\" >CSR Reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/esg-reporting-is-it-mandatory-in-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Evolution_of_ESG_Reporting\"><\/span>Evolution of ESG Reporting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>ESG related regulations in\nIndia are specified under various legislation, including Environment laws (The\nEnvironment Protection Act, 1986, The Water (Prevention and Control of\nPollution) Act, 1974, The Air (Prevention and Control of Pollution) Act, 1981,\nand Hazardous Waste (Management Handling and Transboundary Movement) Rules,\n2016) as well as Factories Act, 1948.<\/p>\n\n\n\n<p>The First stipulation regarding <a href=\"https:\/\/corpbiz.io\/environment-social-and-governance-esg-strategies\"><strong>Environment, Social, and Governance (ESG)<\/strong><\/a> Reporting was introduced in The Companies Act, 2013. According to section 134(3), Companies are required to include the report compiled by their Board of directors regarding the conservation of energy accompanying the annual financial statement, which is further described in Rule 8(3) (A) of the Companies (Accounts) Rules, 2014.<\/p>\n\n\n\n<p>Along with this, Regulation\n34(3) of SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015\n(LODR Regulations) also provides for companies to include disclosure of\nopportunities, risks, concerns, and threats as a part of their annual report,\nwhich was further amended under Regulation 34(2)(f) which introduce the BRSR\nframework in 2021.<\/p>\n\n\n\n<p>This new guideline replaces\nthe previous BRR (Business Responsibility Report), making it mandatory for the\ntop 1000 listed companies to annually report ESG related information from the\nfinancial year 2022-2023.&nbsp; &nbsp;<\/p>\n\n\n\n<p>Further, <strong>the Indian Banks Association (IBA)<\/strong><sup><a href=\"https:\/\/www.iba.org.in\/\"><strong>[1]<\/strong><\/a><\/sup> has also published guidelines for responsible financing regarding the integration of ESG risk management into the financial institution\u2019s decision-making process, business strategy, and operations.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Principles_to_be_fulfilled_under_the_ESG_report\"><\/span>Principles to be fulfilled under the ESG report<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The policies that are\nrequired by businesses to be fulfilled as per the report issued by The Ministry\nof Corporate Affairs of the Government of India are: &#8211;<\/p>\n\n\n\n<ol><li>Practice sustainable and safe way of providing goods and services<\/li><li>Keep in mind the interest and requirements of the stakeholders.<\/li><li>Promote and Practice human Rights<\/li><li>Practice and encourage the health of all the employees, counting the supply chain workers<\/li><li>Working and promoting the ethical, transparent, and accountable way of conduct.<\/li><li>Promote and Practice that encourage environmental protection.<\/li><li>Promote development that is all inclusive and equal<\/li><li>Maintain professional conduct with the consumers and client<\/li><li>Adopting transparent and responsible ways in the case of participating in public awareness and regulatory policies.<\/li><li>Disclosure of policies and mechanisms that a company implements that are compliant with ESG. BRSR (Business Reporting and sustainability reporting) lays significant weight on computable      metrics for ensuring evaluation across sectors, companies, and time      periods;<\/li><li>Improved disclosures on climate and social related issues;<\/li><li>Separation of disclosures into vital and principal indicators, the first one being the obligatory requirement. The leadership indicators, inter alia, also highlights disclosures related to the value chain of appropriate entities;<\/li><li>BRSR(Business Reporting and sustainability reporting) allows interplay for organisations that are already issuing sustainability reports under other international frameworks<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"CSR_Reporting\"><\/span>CSR Reporting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Importance of CSR Reporting<\/h3>\n\n\n\n<ul><li><strong>Better Market standing\u00a0<\/strong><\/li><\/ul>\n\n\n\n<p>As per the recent reports,\ncompanies that adopt the practice of ESG Reporting as their vision and core\nvalue have been more lucrative than their competitors.<\/p>\n\n\n\n<ul><li><strong>Better Market share\u00a0<\/strong><\/li><\/ul>\n\n\n\n<p>A number of corporations have\nstarted to realise that making investments in social and environmental concerns\nwould not only enhance their own business continuity but will also provide them\nwith an advantage over competitors and clients, as well as open up new markets.<\/p>\n\n\n\n<ul><li><strong>Attracting Investor funding\u00a0<\/strong><\/li><\/ul>\n\n\n\n<p>Nowadays, Investors are\ngetting more aware of the market overview of the companies with sustainable\nplanning and ESG and their impact on the consumer, because of which they are\nmore inclined to invest in companies that include this policy.<\/p>\n\n\n\n<ul><li><strong>Social license to operate<\/strong><\/li><\/ul>\n\n\n\n<p>Because of increasing awareness\namong consumers and communities, the pressure on the companies to fulfil their\nresponsibilities under ESG Report.<\/p>\n\n\n\n<ul><li><strong>Attracting Better Employment<\/strong><\/li><\/ul>\n\n\n\n<p>Employers with a purpose and\nresponsible behaviour are more and more popular among employees to attract a\nbetter workforce.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Disclosure requirements<\/h3>\n\n\n\n<p>The guidelines provided by\nRBC have been influenced by many international conventions and laws, including\nUN Guiding Principles on Business and Human Rights, UN Sustainable Development\nGoals, Paris Agreement, and International Labour Organisation (ILO) Core\nConventions which put emphasis on the issues of sustainable development of\nbusiness like transparency, human rights, environmental protection, business\nethics, and fair labour practices.<\/p>\n\n\n\n<p>ESG Reporting after the\nimplementation of new norms has been stipulated mandatory for the financial\nyear 2022-23 but was voluntary for the financial year 2021-22 so that\nbusinesses get sufficient to get used to new reporting regulations. These\ncompanies are required to adopt BRSR as soon as possible to help them showcase\ntheir sustainability position, objective, or performance, which ultimately\nresults in improved market standing and better funding.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>ESG reporting is critical for\na rising economy like India because it gives all stakeholders the chance to\ncreate a system of economic measurement that goes beyond traditional financial\nmeasurements. By mandating ESG reporting by Indian corporations, SEBI is making\nefforts to support the fulfilment of the Paris Climate Change Convention and\nthe Sustainable Development Goals of the United Nations. One anticipates that\nall listed corporations and sizable unlisted enterprises will be subject to the\nBRSR reporting requirements.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Addressing and managing the issue of climate change and environmental degradation has taken the place of priority among many agencies and authorities all around the world, with global communities coming together and brainstorming the methods of managing the issue of Climate Change. Recently conducted, the 2021 Conference of Parties (CoP26) addressed climate change in Glasgow, [&hellip;]<\/p>\n","protected":false},"author":39,"featured_media":45609,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2093],"tags":[2526],"acf":{"service_id":"220"},"authorName":"Muskaan Verma","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/05\/MicrosoftTeams-image-14.jpg","authorDescription":"Muskaan has completed her BA.LLB and LLM, gaining vast legal knowledge and expertise. She has keen interest in legal research and content writing, having prior experience of publishing numerous research papers in international journals on Environmental Laws and Corporate Laws.","postViews":10772,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45608"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=45608"}],"version-history":[{"count":10,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45608\/revisions"}],"predecessor-version":[{"id":45620,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45608\/revisions\/45620"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/45609"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=45608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=45608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=45608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}