The Indian Business Responsibility and Sustainability Report (BRSR) is a new framework for environmental, social, and governance (ESG) reporting that will come into effect in 2023. The BRSR builds upon the voluntary guidelines issued by the Ministry of Corporate Affairs in 2009 and the Business Responsibility Report (BRR) of 2012.
The Securities Exchange Board of India (SEBI), the regulatory body for securities markets in India, has designed the BRSR to align with internationally accepted reporting frameworks such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-Related Financial Disclosures (TCFD).
The BRSR introduces mandatory quantitative metrics on sustainability-related factors for eligible Indian companies, starting from April 2022 to March 2023 fiscal year.
What are the Three Main Disclosure Areas under the BRSR?
SEBI’s guidance document provides details on three types of disclosures under the BRSR:
- General disclosures: These include basic company information such as office addresses, product and service details, listing exchanges, reporting boundaries, employee counts, and diversity and inclusion metrics.
- Management and process disclosures: This section demonstrates companies’ adherence to the National Guidelines on Responsible Business Conduct (NGRBC) in terms of policy, governance, and leadership.
- Principle-wise performance disclosures: These disclosures focus on quantitative data related to the nine principles of the NGRBC, helping organizations showcase their environmental and social impact.
Defining and Quantifying Adherence to Principles
The BRSR framework is based on nine principles outlined in the BRR but specifies that the top 1,000 NSE listed companies by market capitalization must report and provide various disclosures.
Each principle-wise disclosure consists of essential indicators (mandatory) and leadership indicators (voluntary). Essential indicators cover environmental factors, social impact, and employee training, while leadership indicators include advanced reporting on areas like biodiversity and supply chain disclosures.
As of June 2023, the BRSR comprises 140 questions, including 98 essential indicators and 42 leadership indicators.
The nine principles and their required disclosures in the BRSR are:
- Business conduct and governance with integrity: Disclosure of anti-corruption policies, regulatory actions, and conflict-of-interest complaints.
- Sustainable and safe provision of goods and services: Reporting on environmental investment, recycling procedures, and producer responsibility plans.
- Respect and promotion of employee well-being: Details on employee benefits, accessibility, and union representation.
- Respect for and responsiveness to all stakeholders: Inclusion of vulnerable groups, communication channels, and consultation processes.
- Respect for and promotion of human rights: Training on human rights, minimum wage compliance, and executive remuneration.
- Efforts to protect and restore the environment: Energy and fuel consumption, water withdrawal, and environmental impact assessments.
- Responsible and transparent engagement in public and regulatory policy: Association affiliations, anticompetitive conduct, and public policy positions.
- Promotion of inclusive growth and equitable development: Social impact assessments, rehabilitation projects, and procurement policies for marginalized groups.
- Responsible consumer engagement: Complaint mechanisms, safety-related product recalls, and cybersecurity policies.
The BRSR aims to enhance compliance, consistency, and communication regarding non-financial disclosures as India moves towards mandatory ESG reporting.
IBM Envizi’s Product Suite for ESG Reporting
IBM Envizi offers organizations a solution to streamline the collection, management, and reporting of ESG data, enabling them to comply with the requirements of multiple ESG reporting frameworks efficiently.
Envizi helps organizations:
- Automate data capture across ESG domains into a single auditable system of record, improving reporting efficiency.
- Manage people, processes, and documentation with tools like the Sustainability Reporting Manager within the ESG Reporting Frameworks module, creating responses for specific frameworks and storing them in a centralized repository.
With the BRSR and the support of tools like IBM Envizi, Indian companies can meet their ESG reporting obligations and contribute to sustainable business practices.
The Indian Business Responsibility and Sustainability Report (BRSR) is a new ESG reporting framework that will be mandatory for eligible Indian companies from April 2022. The BRSR introduces quantitative metrics across three areas of disclosure: general, management and process, and principle-wise performance. The BRSR is based on nine principles and requires companies to disclose various environmental, social, and governance factors. IBM Envizi’s product suite can help organizations streamline their ESG reporting processes and manage their data efficiently.
1. When will the Indian Business Responsibility and Sustainability Report (BRSR) come into effect?
The BRSR will come into effect in 2023.
2. What are the three main disclosure areas under the BRSR?
The three main disclosure areas under the BRSR are general disclosures, management and process disclosures, and principle-wise performance disclosures.
3. What are the nine principles in the BRSR?
The nine principles in the BRSR are business conduct and governance with integrity, sustainable and safe provision of goods and services, respect and promotion of employee well-being, respect for and responsiveness to all stakeholders, respect for and promotion of human rights, efforts to protect and restore the environment, responsible and transparent engagement in public and regulatory policy, promotion of inclusive growth and equitable development, and responsible consumer engagement.
4. How can IBM Envizi help organizations with ESG reporting?
IBM Envizi offers a product suite that helps organizations automate data capture, manage processes, and generate responses for ESG reporting frameworks. It streamlines the collection, management, and reporting of ESG data, improving reporting efficiency.