Navigating BRSR Reporting: Challenges and Insights from India

November 2, 2024 snowkapadmin

India’s evolving corporate landscape has seen a significant shift towards responsible and sustainable business practices. One of the cornerstones of this shift is the Business Responsibility and Sustainability Reporting (BRSR) framework. As companies gear up for this mandatory requirement, many face challenges in understanding, implementing, and reporting through the BRSR framework. This blog explores the key aspects of BRSR reporting, challenges companies face, and insights into how to streamline the process.

What is BRSR Reporting?

The Business Responsibility and Sustainability Reporting (BRSR) framework, introduced by the Securities and Exchange Board of India (SEBI), aims to push Indian companies towards greater transparency and accountability in terms of environmental, social, and governance (ESG) factors. It replaced the earlier Business Responsibility Report (BRR), adding more granularity and rigour to reporting processes, making it a crucial part of ESG strategy.

BRSR requires companies to disclose their performance across nine principles related to sustainability and responsibility, ranging from ethics, environmental sustainability, employee well-being, and community development, among others. These reports are mandatory for the top 1,000 listed companies in India based on market capitalization.

The BRSR Framework: Key Components

The BRSR framework focuses on nine principles of responsible business conduct, which form the backbone of its reporting structure:

Ethical Governance: Companies must operate ethically, maintaining integrity and transparency.
Sustainability: This involves incorporating environmental considerations into business processes and decision-making.
Well-being of Employees: Companies are required to provide safe and healthy working conditions.
Stakeholder Engagement: Responsiveness to all stakeholders, including customers, suppliers, and the community, is essential.
Human Rights: Respecting human rights across the value chain.
Environmental Responsibility: Minimizing the environmental impact of business operations.
Policy Advocacy: Engaging in responsible public policy advocacy.
Inclusive Growth: Ensuring inclusive and equitable development.
Customer Value: Promoting customer well-being through ethical business practices.

Learn more about the Nine Principles of BRSR

BRSR Reporting Challenges

While the BRSR framework is a step in the right direction, its implementation brings several challenges for companies, especially those new to ESG reporting.

1. Data Collection and Management

Companies often struggle with gathering the required data across their entire operations. Unlike financial data, ESG-related metrics like energy consumption, waste generation, or employee well-being often exist in silos and require sophisticated data management systems to centralize and report effectively.

This is where leveraging a sustainability management platform becomes essential. A platform like Snowkap can help companies streamline data collection, ensuring accuracy and timeliness in reporting.

Explore how a sustainability management platform can help

2. Standardization of Reporting Practices

The lack of uniformity in ESG reporting across industries is another key challenge. Each sector has different operational risks, leading to varying interpretations of what constitutes ‘material’ information. As a result, many companies find it difficult to determine what aspects to prioritize in their BRSR reporting.

3. Stakeholder Expectations

With increased transparency, companies face heightened scrutiny from stakeholders, including investors, regulators, and the public. Balancing stakeholder expectations while ensuring the accuracy and completeness of the report can be daunting.

4. Regulatory Compliance

Staying up-to-date with regulatory changes is crucial. As more stringent ESG-related laws and guidelines emerge, businesses need to be agile in adapting their processes to meet evolving compliance requirements. Many companies struggle to align their internal reporting processes with these regulatory expectations.

Best Practices for BRSR Reporting

To navigate these challenges, companies can adopt the following best practices:

Adopt a Centralized Reporting System: Centralize all ESG-related data to improve accuracy and streamline reporting. Use technology, like a sustainability management platform, to gather, manage, and report data seamlessly.
Engage with Stakeholders: Regularly communicate with stakeholders to understand their expectations and address concerns proactively.
Regular Training and Awareness: Ensure employees at all levels understand the importance of BRSR reporting. Regular training on ESG reporting standards can help bridge knowledge gaps and improve data collection efficiency.
Seek Expert Guidance: Consulting with ESG specialists can help companies navigate the complexities of BRSR reporting and stay compliant with evolving regulations.

BRSR reporting is a significant step toward fostering corporate responsibility and sustainable practices in India. However, it comes with its share of challenges. Companies that adopt centralized data management systems, engage stakeholders effectively, and stay ahead of regulatory changes are better positioned to navigate these challenges. With the right tools and strategies in place, BRSR reporting can not only ensure compliance but also enhance a company’s reputation and stakeholder trust.

For businesses in India looking to embrace this framework, early preparation and continuous improvement in reporting practices are key to success.

FAQs on BRSR Reporting

What is the purpose of BRSR reporting?BRSR reporting is designed to promote transparency and accountability in how businesses manage their environmental, social, and governance (ESG) responsibilities. It pushes companies to disclose non-financial aspects of their operations, helping stakeholders make informed decisions
What are the main challenges companies face in BRSR reporting?Companies often struggle with data collection, standardization, and meeting stakeholder expectations. Additionally, staying compliant with evolving regulatory guidelines can be challenging without the right tools or processes in place.
How can a sustainability management platform help with BRSR reporting?A sustainability management platform can streamline the data collection process, ensuring that all ESG-related metrics are accurately captured and reported. It centralizes data management and helps ensure compliance with reporting guidelines.

Explore how Snowkap’s sustainability management platform can assist your company

The BRSR Reporting Format

The BRSR reporting format consists of three sections:

General Disclosures: This section covers the company’s profile, product portfolio, locations of operations, employee details, and key social and environmental policies.
Management and Process Disclosures: It highlights the management’s approach to sustainable development and how the company integrates the BRSR principles into its business strategy.
Principle-wise Performance: The third section is where companies provide detailed disclosures on their performance in relation to the nine principles of responsible business conduct.