Business Responsibility and Sustainability Report (BRSR)

[YAGAY andSUN]

A Business Responsibility and Sustainability Report (BRSR) is a comprehensive disclosure document that outlines a company's performance on environmental, social, and governance (ESG) parameters. It aims to promote responsible business conduct, sustainable practices, and greater transparency in corporate reporting.  The NSE Circular Ref No. NSE/CML/2024/11, dated May 10, 2024, pertains to the Business Responsibility and Sustainability Report (BRSR). This circular provides Frequently Asked Questions (FAQs) and general observations/guidelines to assist listed companies in filing their BRSR, which is a disclosure document focusing on Environmental, Social, and Governance (ESG) parameters

The BRSR is part of the Securities and Exchange Board of India (SEBI)'s initiative to enhance transparency and accountability among listed entities regarding their sustainability practices. The guidelines aim to standardize ESG disclosures, enabling investors and stakeholders to assess companies' sustainability performance effectively.

Context in India

In India, the Securities and Exchange Board of India (SEBI) mandated BRSR reporting for the top 1,000 listed companies (by market capitalization) starting from the financial year 2022–23. It replaced the earlier Business Responsibility Report (BRR) and aligns more closely with global ESG frameworks like GRI, SASB, and TCFD.

Key Objectives of BRSR

• Promote responsible business practices aligned with national and international sustainability goals.
• Ensure transparency and accountability regarding environmental and social impacts.
• Enable investors to make informed ESG-related decisions.

Structure of the BRSR

The BRSR is divided into three main sections:

Section A: General Disclosures

• Corporate details (name, industry, listing information)
• Products/services
• Operations (locations, scale)
• Employee strength and diversity

Section B: Management and Process Disclosures

• Governance structures for sustainability
• Policies relating to ESG factors
• Stakeholder engagement processes

Section C: Principle-wise Performance Disclosures

Covers 9 principles based on the National Guidelines on Responsible Business Conduct (NGRBC):

1. Ethics, Transparency, and Accountability
2. Product Life Cycle Sustainability
3. Employee Well-being
4. Stakeholder Engagement
5. Human Rights
6. Environmental Stewardship
7. Public and Regulatory Policy
8. Inclusive Growth and Equitable Development
9. Customer Value

Each principle requires reporting both qualitative and quantitative metrics (e.g., emissions data, employee turnover, community development contributions).

Benefits of BRSR Reporting

• Enhances corporate reputation
• Attracts ESG-focused investors
• Drives risk management and long-term value creation
• Improves regulatory compliance

Challenges

• Data collection and standardization
• Lack of ESG reporting expertise
• Integration into business strategy

Here’s a concise summary of the Business Responsibility and Sustainability Report (BRSR) and a comparison with global ESG frameworks:

✅ BRSR Report Summary (India – SEBI Mandate)

Objective:
To ensure listed companies disclose their Environmental, Social, and Governance (ESG) performance in a structured and standardized manner.

📌 Key Components:

1. Section A – General Disclosures
   • Corporate profile
   • Products/services
   • Workforce demographics
   • Locations of operations
2. Section B – Management and Process Disclosures
   • ESG governance and leadership roles
   • Policy frameworks
   • Stakeholder engagement mechanisms
3. Section C – Principle-wise Performance Based on 9 Principles of the National Guidelines on Responsible Business Conduct (NGRBC), including:
   • Business ethics
   • Product responsibility
   • Employee well-being
   • Environmental impact
   • Inclusive growth
   • Customer relationships

📈 Metrics Included:

• GHG emissions (Scope 1, 2)
• Water consumption
• Employee training hours
• Diversity metrics
• Community investment

📌 Applicability:

Mandatory for top 1,000 listed Indian companies (by market cap) from FY 2022–23 onwards. Others can adopt voluntarily.

🌍 Comparison: BRSR vs Global ESG Frameworks

Feature	BRSR (India)	GRI (Global Reporting Initiative)	SASB (Sustainability Accounting Standards Board)	TCFD (Task Force on Climate-Related Financial Disclosures)
Scope	Broad ESG (India-specific)	Broad ESG (Global)	Industry-specific ESG metrics	Focused on climate-related financial risks
Governance Focus	Strong, based on NGRBC	Moderate	Moderate	Strong
Environmental Metrics	Mandatory (limited granularity)	Detailed	Selective, industry-based	Strong focus on climate, carbon, and risk
Social Aspects	Strong (labor, inclusion, human rights)	Strong	Varies by sector	Limited
Materiality Approach	Stakeholder + regulatory	Stakeholder-centric	Financially material issues only	Financial materiality (climate-related)
Reporting Format	Structured template from SEBI	Flexible	Sector-specific standards	Narrative disclosures
Mandatory?	Yes (for top 1,000 in India)	No (voluntary)	No (voluntary)	No (voluntary, but increasingly expected)

📝 Summary

• BRSR is tailored for Indian regulations, aiming to unify ESG reporting and promote responsible business conduct.
• While GRI offers global, comprehensive coverage, SASB focuses on financial materiality specific to sectors.
• TCFD is highly climate-specific, helping firms disclose climate-related financial impacts.

BRSR is beginning to align with global frameworks, making it easier for Indian companies to transition to international ESG norms if required.

***