Foundation stone for BRSR

Foundation stone for BRSR

There are various international and local frameworks used by organisations across the globe for their corporate sustainability reporting. In November 2018, the Ministry of Corporate Affairs (MCA) constituted a Committee on Business Responsibility Reporting for finalising Business Responsibility Reporting formats for listed and unlisted companies, based on the framework of the National Guidelines for Responsible Business Conduct’ (NGRBCs) . Note:   The existing format of BRR is based on ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ (“NVGs”) issued by the Ministry of Corporate Affairs (“MCA”), Government of India.

In August 2020, the Committee addressed various aspects and issues that could improve the quality and utility of disclosures and recommended Business Responsibility and Sustainability Reporting (BRSR) as an update on the existing Business Responsibility Reporting (BRR) to incorporate the current global practices in non-financial sustainability reporting based on the NGRBCs.

Through its ‘Report of the Committee on Business Responsibility Reporting’ (the Committee Report), the Committee recommended that BRR be rechristened BRSR, where disclosures are based on ESG parameters, compelling organisations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting.

As per SEBI’s circular dated 10 May 2021, entities already preparing and disclosing sustainability reports based on internationally accepted reporting frameworks (such as GRI, SASB, Task Force on Climate-related Financial Disclosures (TCFD) or <IR> may cross-refer to disclosures made under these frameworks.

BRSR – the format configuration

In the current reporting under BRR, the reporting sections are five which has been reduced to three in the BRSR requirements. However, additional disclosures have been inserted in each of these sections. In the new format of business responsibility and sustainability reporting, the disclosures relating to key performance indicators (KPI) under the specified principles are categorised under:

(a) essential indicators which are mandatory; and

(b) leadership indicators which are voluntary. 

What is BRSR?

Sustainability Reporting is an emerging discipline encompassing the disclosure and communication of an entity’s non -financial – environmental, social, and governance (ESG) performance and its overall impact. Over the last few years, more and more entities are now preparing and disclosing their sustainability reports either under a mandate or voluntarily as per the reporting frameworks/ standards provided by standard-setting bodies/ regulators.
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Key disclosures in BRSR

A few of the key disclosures sought in the BRSR are highlighted below: a. An overview of the entity’s material ESG risks and opportunities, approach to mitigate or adapt to the risks along-with financial implications of the same
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Role of Chartered Accountants in BRSR

“The focus on sustainable investing among equity market participants is expected to rise with more companies and countries implementing policies to meet ESG targets, particularly with respect to carbon emissions…….Stocks in Asia with high ESG scores on the MSCI are trading at a 40% premium to stocks with low ESG scores
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