BRSR Reporting in India: Applicability, Format, Guidelines, Benefits

Karen Sam
January 6, 2025

BRSR reporting is a simplified reporting framework developed by SEBI. The BRSR framework includes measures and regulations that help businesses and companies tackle climate change issues and this BRSR reporting structure will eventually become a focal point to help grow the economy in a sustainable manner.

BRSR reporting has three main sections. This includes general disclosure, Principle-wise performance disclosure, and management and process disclosure. Each section of the BRSR reporting structure has a specific focus that helps companies cover all the bases in their reports.

What is BRSR Reporting?

BRSR is Business responsibility and sustainability reporting, which is a reporting framework by SEBI for listed companies in India. BRSR report is an integrated reporting framework and it aims to increase the level of reporting on environmental, social, and governance( ESG) performance. The BRSR report format guides enterprises to report the ESG performance indicators to ensure that they practice responsible business and achieve sustainable development.

The objectives of BRSR report implementation are as follows :

Encourages companies to adopt practices that are sustainable and consider ESG integration into their operations.
Encourages companies to report on the comparability and the quality of non-financial information.
Ensures that companies in India comply with the international frameworks of sustainability reporting.
Encourages that ESG disclosures are made and improves stakeholder engagement while establishing trust.

BRSR Reporting format

This reporting format is organised into 3 pivotal sections. The sections are as follows and each section also integrates the BRSR principles :

1. Management and Process Disclosure

Primarily focuses on the details of the company’s operations. It outlines the policy’s procedures and the measures to implement in conducting an ethical business with the promotion of environmental responsibility.

2. Principle-wise Performance Disclosure

Requires the businesses to report on how compliant they are with the 9 principles outlined under the National Guidelines on Responsible Business Conduct (NGRBC).

3. General Disclosure:

Provides a brief description of the company, its services, the people who are behind it, its operations, and its compliance with the law.

BRSR Principles

There are various pillars of the BRSR reporting in India :

Principle 1

Describes how businesses are conducted in an ethical and transparent manner. The focus of principle 1 of the BRSR reporting in India is on a businesses transparency in communication and being accountable for their actions.

Principle 2

Establishes that businesses should provide services and goods in a manner that is safe and sustainable.

Principle 3:

Promotes respect and the well-being of all employees, including those in the value chain in businesses.

Principle 4

Promotes the interest of stakeholders as well all being responsive to the stakeholders.

Principles 5

Establishes that businesses should promote human rights and respect.

Principle 6

Encourages businesses to make efforts to restore the environment and protect it.

Principle 7

Establishes that businesses should engage with and provide value to their consumers in a responsible manner.

Principle 8

Establishes that businesses should promote inclusive growth and equitable development.

Principle 9

Promotes engagement within businesses and value addition to their customers in a responsible manner.

BRSR Reporting Applicability

1000 large companies listed by SEBI that must mandatorily file BSRS reports as part of their annual reports from the financial years 2022-2023 onwards. The companies are required to make their disclosure as per the updated BRSR format . This includes assurance requirements for BRSR Core and ESG disclosure for the value chain.

How to Prepare BRSR Report ?

In order to prepare the report, there are multiple steps to be followed.They are as follows:

Understanding BRSR

Companies are required to gain a deep understanding of the framework, its principles and the specific industry requirements. Companies must also determine the key ESG issues which should be material to the stakeholders and have a significant impact on the business

Data gathering and Analysis

Data gathering and analysis requires the meticulous collection of the company’s environmental, social and governance data. Data on greenhouse gas emissions, human rights practices, waste generation, energy consumption must also be included.

The company must ensure the accuracy, reliability, completeness of the collected data, and robust data management practices must be enforced to maintain data integrity.

Assessing and Reporting

Assessing and reporting includes the evaluation of the company’s ESG performance against the BRSR principles. Companies are to identify strength and areas for improvement. Along with this, a comprehensive BRSR report with qualitative and quantitative information should be provided.

Implementation and continuous improvement

Companies have to establish specific measurable, achievable, relevant, and time bound (SMART) targets to address identified material issues. The companies must also develop and implement ESG strategies to improve the company’s ESG performance. It is important to continuously monitor the progress of the company towards the goals and the effectiveness.

Benefits of BRSR Reporting

There are numerous benefits to BRSR reporting. They are as follows :

1. Enhanced accountability

The progress of a company and its reporting always assists the stakeholders in making good decisions about the company.

2. Increased stakeholder trust:

Building confidence and strengthening relations with stakeholders and the society plays a vital role in the success of the business.

3. Improved risk management:

Negative impacts are minimised and organisational resilience increases with the management through the identification of risks.

4. Alignment with global standards :

The reporting structure ensures that Indian companies conform to globally recognised sustainability reporting frameworks.

5. Competitive advantage:

The best talent is attracted to companies that practice sustainable practices and responsible business. This enhances a company’s image and helps companies with a competitive advantage.

6. Driving sustainable development:

The reporting structure supports sustainable business practices which can help companies achieve the UN SDG and further India’s commitment to sustainable development.

Core Elements of BRSR Reporting

The core elements of this reporting are as follows:

Materiality Assessment:

Companies have to identify ESG issues that are most relevant to the business operations.

Data collection and Analysis :

Gathering accurate and reliable data on ESG performance.

Stakeholder Engagement:

Consulting with the investors and employees is important to understand the concerns regarding the company’s ESG performance.

Boundary Setting:

The scope of the report has to be defined with time periods, geographical areas and value chain segments covered.

Assurance:

Independent assurance on the BRSR report is required to enhance the credibility and reliability.

BRSR Report Guidelines by SEBI

The detailed guidelines are as follows :

Applicability : Applies to all the listed entities in India
Reporting Frequency: An annual report is to be filed.
Format and Content : The report should be clear, concise and consistent with all the information on the company’s ESG performance.
Disclosure Requirements: Companies are required to disclose all data on greenhouse gases emissions, water usage, waste management, human rights and community engagement .
Verification and Assurance: Companies are encouraged to obtain assurance on their BRSR report to ensure reliability and credibility.

Conclusion

BRSR reporting is the need of the hour as companies are no longer being assessed only on the basis of financial metrics but also on how they are creating an impact across the society.

This type of reporting is a step towards achieving the following milestones :

Enabling the capture of required date for reporting ESG matters
Selection of sustainability framework and related metrics that can be adopted by companies to facilitate reporting
A level of assurance provided by the companies through the BRSR reporting framework.

FAQ's

Is filing of BRSR mandatory ?

The filing of BRSR is mandatory for the top 1000 listed companies in India based on their market capitalisation.

What are the different types of BRSR ?

There are no different types of BRSR. The framework has 3 sections in the format :

Management and Process Disclosure
Principle-wise Performance Disclosure
General Disclosure

Who prepares the BRSR report ?

The BRSR report is typically prepared by a cross-functional team within the company, often involving the following departments:

Sustainability Department
Finance Department
Human Resources Department
Legal Department
Operations Department
Communications Department

What is the principle of BRSR disclosure ?

There are 9 principles of the BRSR disclosure. They are as follows :

Ethical Business Conduct
Product Responsibility
Employee Welfare
Stakeholder Engagement
Human Rights
Environmental Responsibility
Community Development
Consumer Protection
Fair Competition

What is the penalty for BRSR ?

Currently there are no penalties for BRSR reporting in India. However, it’s important to note that this could change in the future as the regulatory landscape evolves.

Potential Consequences of Non-Compliance:

While there are no direct penalties, non-compliance with BRSR can have several significant consequences:

Reputational Damage
Investor Pressure
Increased Regulatory Scrutiny
Difficulty in Attracting Talent

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