How BRSR is Transforming Corporate Sustainability Reporting

Corporate sustainability reporting is the practice of disclosing non-financial performance information to external stakeholders, such as investors, customers, regulators, and civil society. Corporate sustainability reporting can help companies measure their impact on the environment, society, and economy, and align their strategies with the global agenda of sustainable development.

In India, CSR reporting has been evolving over the years, with various voluntary and mandatory initiatives and frameworks. One of the most recent and significant developments is the Business Responsibility and Sustainability Reporting (BRSR) framework, introduced by the Securities and Exchange Board of India (SEBI) in 2020. 

BRSR is a comprehensive and standardised format for reporting on sustainability issues, based on the National Guidelines for Responsible Business Conduct (NGRBCs). BRSR covers a wide range of environmental, social, economic, and governance aspects, and is aligned with the Sustainable Development Goals (SDGs) and the Paris Agreement.

BRSR is transforming CR reporting in India by enhancing the quality, comparability, and relevance of sustainability information, and by promoting a culture of transparency and responsibility among businesses. BRSR also encourages innovation and best practices in sustainability management, creating value and competitive advantage for businesses.

BRSR stands for Business Responsibility and Sustainability Reporting, a framework designed by SEBI (Securities and Exchange Board of India) to encourage companies to integrate sustainable and responsible business practices into their operations. 

BRSR has evolved from the voluntary guidelines issued by the Ministry of Corporate Affairs (MCA) in 2009, which were further refined in the Business Responsibility Report (BRR) of 2012. The BRR was a mandatory cr reporting requirement for the top 1000 listed companies in India, based on market capitalisation. The BRR was based on nine principles defined by the MCA, such as ethics, human rights, environment, stakeholder engagement, etc.

In 2019, the MCA revised the guidelines and released them as the NGRBCs, which aligned with the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the Sustainable Development Goals (SDGs). The NGRBCs also introduced the concept of leadership indicators, which are voluntary disclosures that demonstrate the company’s commitment and performance beyond the minimum requirements.

In 2020, SEBI introduced the BRSR, replacing the BRR, as a more comprehensive and standardised format for csr reporting on sustainability issues. The BRSR is applicable to the top 1000 listed companies on a voluntary basis for FY 2021-22 and on a mandatory basis from FY 2022-23. 

BRSR is designed to be interoperable with other internationally accepted reporting frameworks, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). BRSR also maps to the SDGs and the Paris Agreement. 

BRSR has three main disclosure areas, namely general, management and process, and principle-wise performance disclosures. Each disclosure area has a set of questions or indicators that require quantitative or qualitative information from the companies. 

• General Disclosures: This area covers the basic information about the company, such as its name, address, sector, products, services, markets, etc. It also includes information about the company’s vision, mission, values, policies, and governance structure. The general disclosures help the company to establish its identity, purpose, and context for the annual CSR report.
• Management and Process Disclosures: This area covers the information about the company’s management approach and processes for addressing the sustainability issues. It includes information about the company’s materiality assessment, stakeholder engagement, risk management, innovation, and csr reporting practices. The management and process disclosures help the company to show how it integrates sustainability into its strategy, operations, and decision-making.
• Principle-wise Performance Disclosures: This area covers the information about the company’s performance on each of the nine principles of the NGRBCs. The principle-wise performance disclosures help the company to measure and report its impact on the environment, society, and economy, and to align its actions with the global agenda of sustainable development.

Each principle has a set of essential indicators and leadership indicators, which require quantitative metrics or qualitative information from the company. The essential indicators are mandatory for all companies, and they represent the minimum level of disclosure expected from the company. 

The leadership indicators are voluntary for the companies, and they represent the advanced level of disclosure that showcases the company’s commitment and performance beyond the minimum requirements. The indicators are also mapped to the SDGs and the Paris Agreement, to show how the company contributes to the global goals and targets.

Pro tip: A sustainability reporting software can come in handy in creating your company’s BRSR Report. 

BRSR is a game-changer for corporate sustainability reporting in India. It has several benefits and implications for businesses, regulators, investors, and other stakeholders. Some of the key impacts of BRSR are:

• Simplifying the problem of reporting framework selection: BRSR provides a comprehensive and standardised format for csr/cr reporting on sustainability issues. It also enables interoperability with other internationally accepted reporting frameworks, such as GRI, SASB, and TCFD. This reduces the confusion and complexity of choosing and applying multiple reporting frameworks and ensures consistency and comparability of sustainability information.

• Allowing for easy measurement and comparability across companies, sectors, and periods: BRSR requires companies to provide quantitative metrics on sustainability-related factors, along with qualitative information. This helps to measure and monitor the performance and impact of companies on the environment, society, and economy, and to benchmark them against their peers and industry standards. It also allows for tracking the progress and trends of sustainability performance over time and identifying the gaps and opportunities for improvement.

• Establishing links between the financial results of a business with its ESG performance: BRSR seeks to make connections between a company’s financial performance and ESG performance, making it easier for regulators, investors, and other stakeholders to assess the company’s overall stability, growth, and sustainability. It also helps to disclose the risks and opportunities arising from sustainability issues, and how they affect the company’s value creation and long-term viability. BRSR also encourages companies to adopt integrated reporting, which presents a holistic picture of the company’s strategy, governance, performance, and prospects, in the context of its external environment.

BRSR is not only a reporting requirement, but also a catalyst for driving sustainability transformation in India. You could consider employing sustainability reporting solutions. By adopting BRSR, companies can demonstrate their commitment and contribution to sustainable development, and create value for themselves and their stakeholders.

• Providing a comprehensive and standardised format for reporting on sustainability issues, aligned with the Sustainable Development Goals (SDGs) and the Paris Agreement.
• Enhancing the quality and comparability of sustainability information, enabling better decision-making and accountability by stakeholders.
• Promoting a culture of transparency and responsibility among businesses, fostering trust and reputation.
• Encouraging innovation and best practices in sustainability management, creating value and competitive advantage for businesses.

BRSR has a significant impact on the future of ESG reporting in India, as it simplifies the problem of reporting framework selection, allows for easy measurement and comparability across companies, sectors, and periods, and establishes links between the financial results of a business with its ESG performance. 

BRSR also promotes a culture of transparency and responsibility among businesses and encourages innovation and best practices in sustainability management. BRSR helps businesses to demonstrate their commitment and contribution to sustainable development and to create value for themselves and their stakeholders.

BRSR is a transformative framework for corporate sustainability reporting in India, and it has the potential to create a positive impact on the environment, society, and economy. By adopting BRSR, companies can not only comply with the regulatory requirements but also enhance their sustainability performance and value creation. 

What is the BRSR business responsibility and sustainability reporting?

BRSR stands for Business Responsibility and Sustainability Reporting, a framework introduced by SEBI (Securities and Exchange Board of India) in 2020. BRSR is a comprehensive and standardized format for reporting on sustainability issues, based on the National Guidelines for Responsible Business Conduct (NGRBCs). BRSR covers a wide range of environmental, social, economic, and governance aspects, and is aligned with the Sustainable Development Goals (SDGs) and the Paris Agreement. Here are the steps to create sustainability report.

What is ESG and what is its relationship to sustainability reporting?

ESG stands for Environmental, Social, and Governance, which are three key factors that measure the sustainability and social impact of a company. ESG reporting is the disclosure of non-financial performance information to external stakeholders, such as investors, customers, regulators, and civil society. Corporate social responsibility report can help companies measure their impact on the environment, society, and economy, and align their strategies with the global agenda of sustainable development.

Sustainability reporting is a broader term that encompasses ESG reporting, as well as other aspects of sustainability, such as innovation, ethics, stakeholder engagement, and value creation. Sustainability reporting is the practice of disclosing both financial and non-financial performance information to outsiders of the organisation, in a holistic and integrated manner. Corporate social responsibility report and sustainability reporting can help companies demonstrate their commitment and contribution to sustainable development, and create value for themselves and their stakeholders.

What are the benefits of BRSR?

• BRSR reporting provides a comprehensive and standardized format for reporting on sustainability issues, aligned with the NGRBCs, the SDGs, and the Paris Agreement. It also enables interoperability with other internationally accepted reporting frameworks, such as GRI, SASB, and TCFD.
• BRSR requires companies to provide quantitative metrics on sustainability-related factors, along with qualitative information. This helps to measure and monitor the performance and impact of companies on the environment, society, and economy, and to benchmark them against their peers and industry standards.
• BRSR seeks to make connections between a company’s financial performance and ESG performance, making it easier for regulators, investors, and other stakeholders to assess the company’s overall stability, growth, and sustainability. It also helps to disclose the risks and opportunities arising from sustainability issues, and how they affect the company’s value creation and long-term viability.
• BRSR enhances the quality and relevance of sustainability information, and fosters trust and reputation among stakeholders.
• BRSR stimulates innovation and best practices in sustainability management, by providing incentives and recognition for companies that go beyond the minimum requirements and demonstrate leadership and excellence in sustainability.

What are the 9 principles covered under BRSR?

• Businesses should conduct and govern themselves with ethics, transparency, and accountability.
• Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.
• Businesses should respect and promote the well-being of all employees, including those in their value chains.
• Businesses should respect the interests of and be responsive to all their 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.