Demystifying myths around BRSR reporting
In 2011, November 24th, SEBI approved the introduction of Business Responsibility Reporting (BRR) for listed companies in India. With the growing global awareness around sustainability just BRR wasn’t sufficient and in 2021, SEBI introduced a more robust Business Responsibility and Sustainability Report (BRSR) to convey the focus on sustainability & business responsibility.
Business Responsibility and Sustainability Reporting (BRSR) is a growing trend among companies in India as they increasingly recognize the importance of sustainable business practices. BRSR goes beyond traditional financial reporting, encompassing environmental, social, and governance (ESG) aspects of a company’s operations.
As per the BRSR framework, listed companies are obligated to disclose their performance against each of the nine principles laid out in the National Guidelines on Responsible Business Conduct (NGRBC) issued by the MCA in 2019.
In India, BRSR reporting is not currently mandatory for all companies, but it is required for the top 1000 companies based on market capitalization.
BRSR reporting has gained momentum in India, with SEBI’s mandate for the top 1000 listed companies by market capitalization to submit BRSR reports. Many companies have started incorporating sustainability reporting into their Annual Reports or as standalone reports, using recognized frameworks such as Global Reporting Initiatives (GRI), Sustainability Accounting Standard Boards (SASB), Task Force for Climate related Disclosures (TCFD), Integrated Reporting (IR), or other relevant international frameworks. BRSR incorporates both qualitative as well as quantitative ESG data for each of the nine principles referencing these international reporting frameworks. BRSR Companies are also increasingly recognizing the benefits of BRSR reporting in terms of stakeholder engagement, reputation, risk management, and access to capital.
The BRSR reporting process involves collecting data from various sources, including people, systems, and machines, to compile relevant information. This data is then reviewed, and evidences are authorized to ensure accuracy and integrity. The report is typically submitted in a prescribed format, providing a comprehensive view of the company’s sustainability initiatives, goals, and performance.
Companies that embrace BRSR reporting can benefit in multiple ways.
It enhances transparency and accountability, helping companies showcase their commitment to sustainability and responsible business practices. This can lead to increased investor confidence, as investors are increasingly considering ESG factors in their investment decisions.
BRSR reporting can enhance a company’s reputation and brand value, attracting customers who prioritize sustainability in their purchasing decisions.
BRSR reporting can drive internal improvements by helping companies identify areas for sustainability performance enhancement and aligning their business strategies with long-term sustainability goals.
However, there are challenges in BRSR reporting as well.
Gathering accurate and reliable data from various departments and facilities can be complex, time-consuming, and resource-intensive.
Ensuring data integrity and quality, as well as adhering to reporting guidelines and deadlines, can pose additional challenges.
Companies may also face difficulties in aligning their sustainability initiatives with global reporting frameworks and standards.
To streamline the BRSR reporting process, many companies are leveraging software solutions like SUSTAIN that can automate data collection, verification, and reporting. These software tools can help collect data from diverse sources, collaborate data sourcing, authorize collected data, and generate reports in the prescribed format, reducing the manual effort and enhancing accuracy. Software solutions can also help companies track and monitor their sustainability goals, align with reporting frameworks, and generate insights for performance improvements.
In conclusion, BRSR reporting is gaining momentum in India as companies recognize the importance of sustainability and responsible business practices. While it is not currently mandatory for all companies, it can offer significant benefits in terms of transparency, accountability, investor confidence, reputation, and internal improvements. However, challenges in data collection, verification, and reporting can be addressed with the help of software solutions that automate the process, ensuring accuracy, efficiency, and adherence to reporting guidelines. Embracing BRSR reporting can be a strategic move for companies looking to demonstrate their commitment to sustainability and meet the evolving expectations of stakeholders in the dynamic business landscape of India.