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Home » Blogs » Is BRSR yet another compliance?

Is BRSR yet another compliance?

August 8, 2022 by InCorp Advisory

BRSR Reporting - Is BRSR Yet Another Compliance?
Reading Time: 2 minutes

Business Responsibility and Sustainability Report(BRSR)

The Security and Exchange Board of India (SEBI) introduced Business Responsibility and Sustainability Reporting (BRSR) through a circular dated May 2021.

Table Of Contents


What Is BRSR Reporting?
BRSR Reporting Compliance
Our Supported ESG Reporting Framework
Conclusion
FAQs on BRSR Reporting

What is BRSR Reporting?

BRSR, an evolved version of Business Responsibility Report (BRR), is an Environmental, Social, and Governance (ESG) framework, which is benchmarked to global frameworks such as GRI, TCFD, SASB, etc. SEBI has mandated India’s Top 1000 listed companies (by Market Capital) to submit the comprehensive version BRSR for FY 2022-23 and onwards.

Gyaneshwar Singh, Joint Secretary, Government of India, said, “Disclosures sought under the BRSR report will provide much-needed uniformity as it draws inputs from global sustainability reporting frameworks.”

(The global reporting frameworks referred here are GRI, CDP, SASB, TCFD, and IR, among others)*

India is already a compliance-heavy market, ranked 62 on the Ease of Doing Business ranking. BRSR may seem like another compliance mandate for businesses, but in fact, BRSR will replace the existing BRR compliance.

Related Read: BRSR – A New Avatar of ESG Reporting

CLICK HERE

BRSR Reporting Compliance

Unlike other compliances and reports (like CARO, which target specific stakeholder), the BRSR targets an extensive spectrum of stakeholders. It is structured to uncover the non-financial risk indicators – for multiple stakeholders such as – investors, shareholders, bankers, employees, community, regulators, customers and suppliers.

The variety of raw data required to submit a BRSR report also make this compliance unique. The BRSR framework is significantly data-heavy – with 120+ parameters to be reported across nine core principles. Each of these 9 principles focus on a specific reporting area. The raw data is spread across multiple departments (and often across locations) – for example environment related data will be collected from Environment, Health and Safety (EHS) team at location level, employee benefit data will come from Human Resources (HR) team at corporate level, while community initiatives would be driven by the Corporate Social Responsibility (CSR) team. This shall require a high degree of coordination among various departments.

Rating agencies, both domestic (e.g. CRISIL) and global (e.g. Dow Jones Sustainability Index – DJSI, Morgan Stanley Capital International – MSCI, etc.), have already published ESG ratings and industry benchmarks for companies based on their ESG performance. BRSR will provide consolidated data for these rating agencies to benchmark companies on ESG performance. Similar to financial rating, ESG rating is already impacting market cap and institutional / retail investments.

Related Read: ESG Reporting – The Key to Fundraising in 2022 and Beyond

CLICK HERE

Our Supported ESG Reporting Framework

GRI – Global Reporting Initiative

SASB – Sustainability Accounting Standards Board

TCFD – Task Force on Climate-Related Financial Disclosures

CDP – Carbon Disclosure Project

Related Read: Five Benefits of ESG Reporting for Businesses

CLICK HERE

Conclusion

ESG reporting is picking up in India. SEBI is taking the lead and setting up policy and framework norms for ESG rating agencies and expanding the ESG coverage include more entities (some mutual funds as well!). The next 10 years, as awareness for measuring and reporting non-financial risks grows, companies that are late adopters for ESG will be penalized by all stakeholders. While BRSR adoption is a challenge for many companies, it is a move in the right direction for Indian companies to integrate with the global business environment.


FAQs

What is BRSR disclosure?

The BRSR is an initiative towards ensuring that investors have access to standardized disclosures on ESG parameters.

Is BRSR mandatory?

SEBI mandates the application of the BRSR to the 1,000 largest listed companies (by market capitalization) on a voluntary basis for fiscal years 2021-22 and on a mandatory basis for fiscal years 2022-23.

What is the difference between BRR and BRSR?

Evolution of Business Responsibility Reporting (BRR), BRSR is an Environmental, Social, and Governance (ESG) framework benchmarked against global frameworks such as GRI, TCFD, and SASB.

Why is BRSR important?

BRSR lays considerable emphasis on quantifiable metrics, which will enable easier comparability across sectors and time periods, as opposed to BRR

Stay compliant with all ESG regulations!

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