BRSR Reporting: Comprehensive Guide on the Topic
In a significant stride towards transparency and accountability, the Business Responsibility and Sustainability Report (BRSR) has replaced the Business Responsibility Report (BRR) in India. This enhanced ESG reporting framework, mandated by the Securities and Exchange Board of India (SEBI), aligns Indian ESG disclosures with global standards such as the UN Sustainable Development Goals and the Paris Agreement.
The BRSR Structure
The BRSR reporting structure consists of three sections: General Disclosures, Management and Process Disclosures, and Principle-based Performance Disclosures.
General Disclosures
These gather fundamental information about the listed entity, such as products, operations, staff, and compliance with transparency standards.
Management and Process Disclosures
This section focuses on policies and processes related to leadership, governance, and stakeholder engagement.
Principle-based Performance Disclosures
Companies are required to demonstrate their commitment to responsible business behavior through activities and outcomes, reporting on Key Performance Indicators (KPIs) in compliance with the NGRBC's nine principles of responsible business conduct.
Key Differences between BRSR and BRR
Unlike BRR, which primarily covered broad business responsibility aspects without detailed ESG metrics, BRSR requires more detailed and structured disclosures across Environmental, Social, and Governance dimensions. It also introduces a BRSR Core with key performance indicators and mandatory external assurance for ESG data from FY 2023-24.
Mandatory and Voluntary Indicators
BRSR includes two types of indicators: Essential Indicators, which are mandatory, and Leadership Indicators, while voluntary, encourage openness and accountability by reporting on scope 3 emissions, energy use breakdowns, and health and safety of value chain partners.
The Role of Technology
Technology is being used to increase the quality and efficiency of BRSR, including data collection, analysis, and report generation. This digital transformation is making the reporting process more streamlined and accessible.
Stakeholder Engagement
Stakeholder engagement is becoming more prevalent, with businesses interacting with stakeholders on sustainability concerns. This dialogue is crucial for understanding and addressing the needs and expectations of various stakeholders.
The Future of BRSR
As climate change gains importance in sustainability concerns, there is a rising push for more comprehensive BRSR reporting, aligning with the United Nations Sustainable Development Goals (SDGs). Companies are increasingly relying on metrics and targets to assess their sustainability performance.
In summary, BRSR is a more comprehensive, standardized, and globally aligned reporting framework than the earlier BRR, aiming for deeper transparency, comparability, and accountability in ESG reporting for Indian companies. This shift towards integrated reporting, combining financial and non-financial data, is a significant step towards sustainable and responsible business practices in India.
- The BRSR reporting structure in India, replacing the BRR, consists of three sections: General Disclosures, Management and Process Disclosures, and Principle-based Performance Disclosures.
- General Disclosures gather fundamental information about listed entities, such as their products, operations, staff, and compliance with transparency standards.
- Management and Process Disclosures focus on policies and processes related to leadership, governance, and stakeholder engagement.
- Principle-based Performance Disclosures necessitate companies to demonstrate their commitment to responsible business behavior through activities and outcomes, reporting on Key Performance Indicators (KPIs) in compliance with the NGRBC's nine principles of responsible business conduct.
- Unlike BRR, BRSR requires more detailed and structured disclosures across Environmental, Social, and Governance (ESG) dimensions, including essential indicators that are mandatory and leadership indicators that are voluntary.
- Mandatory indicators in BRSR encourage openness and accountability by reporting on key performance indicators and requiring external assurance for ESG data from FY 2023-24.
- Technology is being utilized to increase the quality and efficiency of BRSR, including data collection, analysis, and report generation, making the reporting process more streamlined and accessible.
- As climate change gains importance, there is a growing trend towards more comprehensive BRSR reporting, aligning with the United Nations Sustainable Development Goals (SDGs), and companies are increasingly relying on metrics and targets to assess their sustainability performance.
