Sustainability is an important topic for all countries, but none more so than those on the sharp end of climate change. For India, currently one of the world’s fastest growing economies and on the front line of the climate crisis, this is certainly the case.
As India’s GDP has grown, so has its impact on climate change. In fact, according to data collected by the European Union, India emits nearly 2.4 billion tons of carbon dioxide (CO2) a year – contributing about 7% of global emissions.
Just like other countries around the world, India is seeking to reduce its emissions and the Indian government has committed to various carbon reduction goals. India aims to meet the Net Zero target by 2070 and by 2030, it aims to meet 50% of its energy requirements from renewable sources.
In part, the burden of meeting these pledges will fall to the government, however, there is still a responsibility for businesses big and small to increase their sustainability in the years to come. One of the key ways India is encouraging this behavior is through the Business Responsibility and Sustainability Report (BRSR).
Below we explain more about the BRSR framework and how following BRSR guidelines can help your business, whether you’re mandated to report or not.
Join us as we put BRSR under the microscope.
What Is BRSR?
The Business Responsibility and Sustainability Report is the latest evolution of Environmental Social and Governance (ESG) reporting in India. It takes over from the existing Business Responsibility Report (BRR), which was first introduced in 2012.
What Are the Timelines for BRSR Disclosure?
Since 2023, the BRSR format has been a mandatory disclosure requirement for the top 1,000 listed entities by market capitalization.
Starting from 2024-25, preparing disclosures and undertaking reasonable assurance on BRSR Core KPIs have been mandated for the top 150 listed entities by market capitalization. BRSR Core KPIs have also been extended to include the value chain of the top 250 listed entities.
Who Has to Report?
The top 1,000 listed companies by market capitalization must file a BRSR-compliant report to the Securities and Exchange Board (SEBI) of India. Other sustainability-minded companies wishing to follow the BRSR framework may do so, but this is not required, though that may change in the future.
What Needs to be Included in a BRSR Report?
To help you complete your BRSR disclosure, SEBI has published a guidance document that details everything required. Broadly speaking, it should include:
- General Disclosures
- Management & Process Disclosures
- Principle Wise Performance Disclosure
1. General Disclosures
This is an introduction to your company and business operations. It should name the stock exchanges where the company is listed, and the reporting boundary such as whether it includes subsidiaries or portfolio companies.
In addition to information about the company’s products and services, the location of its plants and offices, you will need to provide employee details, including diversity and inclusion data such as the number of differently abled workers, representation of women, and employee turnover.
2. Management & Process Disclosures
This section is meant to help the reporting company document their compliance with National Guidelines on Responsible Business Conduct (NGRBCs). Companies need to show that NGRBC-compliant policies exist, but also that they have been approved by leadership and translated into procedures and measurable time-bound goals.
3. Principle Wise Performance Disclosure
These disclosures show how key principles of the standard are incorporated into business practices and this section makes up the bulk of the report. Here is where quantitative data is compiled and reported in a standardized manner so that year-over-year progress can be documented.
There are nine NGRBC disclosures in this section and they are further divided into Essential and Leadership indicators. Essential indicators must be reported on by all companies. Leadership indicators are available to those hoping to position themselves as having a higher commitment to sustainability.
The principles in this section are:
- Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and Accountable.
- Businesses should provide goods and services in a manner that is sustainable and safe.
- Businesses should respect and promote the wellbeing of all employees, including those in their value chains.
- Businesses should respect the interests of and be responsive to all its stakeholders.
- Businesses should respect and promote human rights.
- Businesses should respect and make efforts to protect and restore the environment.
- Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
- Businesses should promote inclusive growth and equitable development.
- Businesses should engage with and provide value to their consumers in a responsible manner.
Why Follow BRSR Guidelines?
While it’s mandatory for the top 1,000 companies to complete their BRSR report, there are more reasons to file a report than simply achieving legal compliance. Whether your business operates in India or internationally, those organizations who undertake conscientious and well-documented ESG programs experience a number of benefits, including:
- Better business value. The process, service, and product reviews involved in ESG reporting provide a valuable an opportunity to find new business opportunities or to change market positioning. Consumer demand for sustainable goods and services is constantly growing, and those companies who can make meaningful sustainability claims may well outperform their competitors.
- Greater access to capital investment. Investors in India and abroad are demanding better sustainability performance as part of their decision making. This includes not only evaluating environmental performance, but also other ESG metrics like diversity and inclusion, as well as transparency in leadership. Those companies who can show strong ESG programs are more likely to attract investment in the future.
- Reduced risk. ESG reporting helps to identify and proactively mitigate risk before it becomes an issue. Companies with a robust ESG program are somewhat “future-proof” because they have potentially reduced risk, not only in their own operations, but also within their supply chain, among subsidiaries, or their own investment portfolio.
- Better corporate citizenship. The community impact of business operations is felt by everyone, and increasingly, people are asking for tangible proof of a company’s claims to sustainability. A documented ESG program provides that proof, following internationally-accredited methodologies.
- More talent. These days, new employees and especially specialists and subject-matter experts are looking for more than a paycheck. They want to know their efforts are helping the community and world at large. Meaningful, sustainable work is what drives this generation of talent, and being able to show the payoff can help retain them long term.
What is BRR and how does BRSR Differ?
India’s Business Responsibility Report (BRR) was initially rolled out in 2012 as an introduction to the disclosure process focusing mainly on qualitative ESG considerations.
With its emphasis on quantitative reporting, the new BRSR, which has been in effect since 2023, is more closely aligned with globally accepted reporting frameworks like the GRI and TCFD. It also strives to align with the updated NGRBCs introduced in 2018 and has a far deeper focus on diversity and ethics.
Together these changes mean the BRSR is more widely recognized and the program has been endorsed by international bodies including the World Bank. Moving forward, it’s highly likely that an organization’s BRSR performance and goals will be taken into consideration by credit rating agencies, banks, and other financial institutions.
Can I Complete BRSR Reporting Using Other Frameworks?
If your organization has already implemented an ESG program with a robust quantitative element, you may already be preparing reports in compliance with international frameworks and standards, such as TCFD, GRI, or CDP. These may have been prepared voluntarily, or to comply with requirements from international investors or customers.
Those companies producing ESG reports that comply with an international standard will still be required to file a BRSR report to SEBI, however, you can cross reference documents that comply with other ESG standards.
How To Prepare an Accurate BRSR Report
India’s carbon reduction goals are certainly ambitious, especially given the anticipated rate of economic growth over the next ten years. In order to meet BRSR requirements and ensure data can be verified by stakeholders and lenders, businesses will need to gather detailed information and use internationally-recognized methodologies.
Anyone who has implemented an ESG program knows that the first year of assessment can be labor-intensive. Data needs to be compiled from multiple departments, offices and plants, as well as from suppliers and even customers and vendors. All of this is time consuming and can put a strain on staff who may not have previously had this work in their job description.
Setting up streamlined workflows to simplify data collection is therefore a must. To help your team gather the information required and present reports that comply with BRSR, or indeed any international standards and frameworks, you may find it helpful to use an ESG specific software platform.
Using tools such the AMCS Sustainability Platform means emissions estimates will be kept current using the latest approved methodologies and can be updated at any time with minimum effort. If your organization is looking at the work involved to meet the BRSR requirements, AMCS can help. Schedule a meeting with one of our experts to discuss how the platform can support your ESG reporting initiatives today.