What is BRSR?

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. Sustainability reporting will only be beneficial if it is of sufficient quality and the market understands and trusts the framework. It is essential that sustainability reporting framework delivers information that is fair, balanced, understandable, transparent, consistent, and comparable.

On 5th May 2021, Security Exchange Board of India brought out amendments to the existing provisions of business responsibility report as enshrined in Regulation 34(2)(f) of SEBI-LODR. The amended provisions now call for discontinuation of the current reporting of business responsibility report (BRR) after the financial year 2021-22. The new report as “Business Responsibility and Sustainability Report” (BRSR) based on the ESG parameters. SEBI has specified the format for BRS reporting, vide its notification dated 10th May 2021. The aforesaid format which is broader than existing format for BRR is also coupled with the guidance note to enable companies to interpret the scope of disclosures required to be made in such report, i.e., 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.
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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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