Overview of the BRSR Reporting
The Business Responsibility and Sustainability Report (BRSR)is an initiative meant for listed entities to display their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct’ (NGBRCs). The report is meant for stakeholders as well as the public. A company’s reporting under the nine principles is divided into ‘essential’ and ‘leadership’ indicators. The essential indicators must be reported mandatorily, while the reporting on leadership indicators is voluntary. The BRSR is meant to ensure that investors have access to standardised disclosures of a company’s performance on ESG or Environment, Social and Governance parameters. Access to relevant and comparable information will enable investors and other stakeholders to identify and assess sustainability-related risks and opportunities of companies and make better investment decisions. At the same time, businesses will be able better to demonstrate their sustainability objectives, position, and performance resulting in long-term value creation in the form of the three aspects, people, planet and profit.As per SEBI, BRSR applied to the top 1000 listed entities for reporting voluntarily for FY 2021 – 22 and now, on a mandatory basis from FY 2022-23. BRSR Reporting is an ESG framework to comply with other global standards like GRI, TCFD, SASB, Integrated Reporting, etc. This reporting is expected to apply to all listed and unlisted companies in the coming years.
Advantages of BRSR Reporting
Through this reporting, businesses will be able to
- Conduct and govern themselves with transparency, ethics and accountability
- Engage and provide value to the customers in a responsible way.
- Promote the well-being of all employees and human rights.
- Provide goods or services that are safe and sustainable throughout their lifecycle.
- Respect the interests of all stakeholders and be responsive to their needs.
- Protect, respect and make efforts to restore the environment
- Support inclusive growth and equitable development for all its stakeholders.
Points to consider while preparing BRSR Report
The following are the general guidance notes released by SEBI for BRSR Reporting.
- Inter-operability of the reporting framework- Listed entities that prepare anddisclose their sustainability reports as part of the annual report based on international frameworks such as GRI, SASB, TCFD, or Integrated Reporting, cancross-reference the disclosures made in the report to disclosures asked in the BRSR format. If the data sought in the BRSR form is already disclosed in the company’s annual report, they can provide a cross-reference for that disclosure. The entity can mention the page number of the report where the data is given on an internationally accepted reporting framework.
- Consistency in reporting boundary- The BRSR Reporting seeks disclosure of whether the reporting is done on a stand-alone or consolidated basis. Also, listed entities must ensure consistency in reporting boundaries across the report.
- Applicability: in cases where some disclosure does not apply to some entities, they can declare that the disclosure is not applicable to them, along with the reasons for it.
- “Reporting Period" is the financial year for which the report is being prepared.
- The entity must provide clear, complete and concise answers.
- A column of ‘Remarks’ accompanies the information sought on complaints in the format". Entities can explain reasons for any pending complaints or give a brief on the nature of the complaints.
- In the column for disclosures of gender, if the entity has employed someone who has not disclosed gender/ other gender, a column for "Other" may be added for such disclosures.
The term “Principle’ refers to principles 1 to 9 given in the National Guidelines for Responsible Business Conduct. The Nine NGRBC Principles must be incorporated to the conduct of the entity. These are
- Principle 1: Business entities should conduct themselves with integrity and in a transparent, ethical and accountable manner.
- Principle 2: Business entities should provide services or goods in a manner that is safe and sustainable.
- Principle 3: Business entities should appreciate and promote the well-being of its employees, including those working in their value chains.
- Principle 4: Business entities must respect and be responsive to the interests of their stakeholders.
- Principle 5: Business entities should appreciate and promote human rights
- Principle 6: Business entities should appreciate and make efforts to protect and restore the environment
- Principle 7: Business entities, when influencing public or regulatory policy in any way, should do so in a responsible and transparent manner.
- Principle 8: Business entities should promote equitable development
and inclusive growth
- Principle 9: Business entities should provide value to their consumers in a responsible manner.
Business Responsibility and Sustainability Report Format
BRSR framework is divided into three sections, i.e. General disclosures, Management and Process disclosure, and Principle-wise performance disclosures.
Section A: General Disclosures
The details of business activities must be in line with those given in Form MGT-7 prescribed by MCA that includes
- Details of the listed entity, such as Name of the Listed Entity, Year of incorporation, registered office address, Corporate address etc.
- Products/services details such as information on business activities and Products/Services sold by the entity (services provided or products manufactured by the listed entity that accounts for 90% of the turnover).
- Operation Details include the number of locations where the entity's plants, operations and offices are situated and the markets served by them.
- Employees' Details, such as the total number of employees and workers, along with the associated break-up by gender and into permanent or non-permanent.
- CSR details such as its applicability, turnover and net worth.
- Transparency and Disclosures Complianceslike complaints and grievances on any of the principles under the NGRBC
Section B: Management and Process Disclosures
This section of BRSR reporting is aimed at helping the business demonstrate the structures and policies put in place for implementing the NGRBC Principles and Core Elements. This section will deal with policy and management processes, Governance, leadership and oversight.
Section C: Principle-wise performance disclosure
This section of BRSR reporting is for aiding entities to show their efforts for integrating the principles and core elements with key processes and decisions. The information sought is categorised as "Essential" and "Leadership". While essential indicators must be disclosed by every entity mandated to file this report, the leadership indicators are a voluntary disclosure by entities that aspire to progress in their quest to be environmentally, socially and ethically responsible.
Documents Needed for preparing BRSR Reporting
- Documents regarding potential risks to the environment and measures to handle them.
- ESG-related documents showing the initiatives being taken by the company.
- Documents on the company's governance indicating oversight mechanism on ESG strategy, policies and information
- Report on management issues like schemes, targets and initiatives to generate and preserve value for the company and stakeholders.
- Performance documents that support sustainability outcomes from the business activities of the entity.
What is BRSR Lite
Since organisations outside the listed companies seldom have experience with non-financial reporting, the SEBI also introduced the provision of BRSR lite, expecting them to come out with a report covering the elements listed in the comprehensive BRSR format. As BRSR will not be pragmatic and hence the committee proposed the idea of a second format. The lite format version also has the differential category of Essential and Leadership and seeks information which smaller companies should be able to provide. Therefore the lite format has fewer disclosures than the comprehensive version. This version was made with the intention of having the MSME organisations also be a part of the BRSR reporting.
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