BRSR is transforming how Indian companies approach sustainability, aligning them with global ESG frameworks
In India's dynamic ESG landscape, businesses are now evaluated not only by their financial gains but also by their dedication to sustainable and socially responsible practices.
At the forefront of this transformative journey is the Business Responsibility and Sustainability Reporting (BRSR) framework. This framework has taken a pivotal position alongside other prominent global ESG standards such as GRI, CDP, ISSB, and SASB, guiding enterprises towards a more sustainable and accountable future.
Introduced by the Securities and Exchange Board of India (SEBI) in 2021, BRSR mandates India's top 1000 listed companies to disclose critical information on various ESG dimensions, encompassing environmental impact, social responsibility, and corporate governance. This disclosure empowers investors, subscribers, and stakeholders to make well-informed decisions regarding their engagements with these companies.
A Brief Overview of BRSR
Introduced by the Securities and Exchange Board of India (SEBI) in 2021, the Business Responsibility and Sustainability Report (BRSR) is mandatory for India's top 1000 listed companies. It aligns with the nine United Nations Global Compact principles and mandates companies to disclose information on various ESG topics, including environmental impact, social responsibility, and corporate governance.
Trends in BRSR and ESG Reporting in India
1. BRSR Core: Tailoring Sustainability in the Indian Context- In July 2023, SEBI announced that certain listed companies would need to report on newly added ESG metrics under 'BRSR Core'. This subset of nine Key Performance Indicators (KPIs) is tailored to the Indian context. It includes metrics like job creation in small towns, gross wages paid to women, and business openness.
2. Assured Sustainability: SEBI's Framework for ESG Metrics- Starting FY 2023–24, SEBI made it mandatory for the top 150 listed companies to provide "reasonable assurance" on ESG metrics. This framework assures credibility in ESG reporting, enabling stakeholders to make well-informed decisions.
3. Indian Corporates Embrace BRSR for Responsible Reporting- Deloitte's survey reveals that 75% of Indian companies now report on their sustainability and ESG performance. Leading companies like Reliance Industries Limited (RIL), Tata Consultancy Services (TCS), and Sterlite Tech disclose a range of sustainability metrics, showcasing their commitment to responsible practices.
4. Value Chain Transparency: Reporting ESG Metrics Upstream and Downstream- The BRSR Core urges companies to report on their value chain ESG metrics, emphasising the impact of supply chains on the environment. This reporting will be mandatory for the top 250 listed companies by market capitalization from FY 2024–25.
5. Climate Resilience: Preparing for Tomorrow's Business Landscape- Companies are increasingly disclosing information on greenhouse gas emissions, reduction efforts, and adaptation plans. This reflects the growing awareness of climate change's impact and the demand for sustainable products and services.
6. Tech-Enabled Reporting: Transforming ESG Data into Actionable Insights- Digital solutions are becoming crucial in ESG reporting. They streamline data collection, reporting, and analysis, improving efficiency, accuracy, and transparency. This digital transformation enhances organizations' ability to report accurate investment-grade ESG data.
Digitally Transforming Organizations’ BRSR and ESG Reporting and Performance
Digital solutions can play a compelling role in helping businesses report their ESG metrics more efficiently, accurately, and transparently. By automating data collection, reporting, and analysis, organisations can:
7. Reduce the time and cost of ESG reporting.
8. Improve the accuracy and completeness of ESG data.
BRSR is transforming how Indian companies approach sustainability, aligning them with global ESG frameworks. As businesses adapt to evolving reporting requirements, digital solutions are becoming instrumental in achieving ESG success.
(R. Mukund is ceo and founder of Benchmark Gensuite.)