📊 What is BRSR? A Comprehensive Guide to SEBI’s BRSR Reporting 🌱

Introduction to BRSR: Understanding the Shift Towards Sustainability 🌍

Business Responsibility and Sustainability Reporting (BRSR) is a regulatory framework introduced by the Securities and Exchange Board of India (SEBI) to make business operations more transparent, responsible, and sustainable. While this may seem like just another compliance requirement, BRSR marks a fundamental shift in how businesses approach their environmental, social, and governance (ESG) responsibilities. It mandates companies to go beyond financial disclosures and incorporate sustainability practices into every aspect of their business operations.

For any sustainability lead in India, BRSR represents an opportunity to position their company as a leader in corporate responsibility and sustainability.

Why BRSR Matters for Businesses 📈

BRSR is a game-changer in the business world. Here's why it matters:

• Stakeholder Trust: BRSR helps businesses foster trust among investors, consumers, and regulators by offering detailed, standardized disclosures on their ESG performance.

• Investor Confidence: With growing interest in ESG investments, companies that follow BRSR guidelines make themselves more attractive to global and domestic investors focused on sustainable practices.

• Competitive Advantage: Companies that embrace sustainability as a core part of their business strategy are better positioned for long-term success, benefiting from improved reputations, stronger relationships with customers, and higher employee morale.

From BRR to BRSR: The Evolution 🌐

The BRSR framework is an upgrade from the earlier Business Responsibility Report (BRR), reflecting India's commitment to sustainability on a global scale. While BRR focused on ethical business practices and stakeholder engagement, BRSR provides a more comprehensive approach to ESG reporting. It moves away from narrative reporting and emphasizes quantitative data, aligning with global reporting frameworks like the UN Sustainable Development Goals (SDGs), Global Reporting Initiative (GRI), and Sustainability Accounting Standards Board (SASB).

Key Differences Between BRR and BRSR 📊

• Data-Driven Disclosures: BRSR emphasizes quantitative data such as GHG emissions, water usage, and gender diversity, while BRR was more narrative-based.

• Global Alignment: BRSR brings Indian companies closer to international ESG standards, making it easier for global investors to assess their sustainability efforts.

Scope and Applicability: Who Needs to Comply? 🏢

As of the financial year 2022-23, BRSR is mandatory for India’s top 1,000 listed companies by market capitalization. This means that these companies must disclose detailed ESG data, ranging from environmental impact to governance structures. Smaller companies are encouraged to adopt BRSR voluntarily, which allows them to demonstrate leadership in sustainability and align themselves with future regulatory requirements.

Which Industries Benefit the Most from BRSR? 💡

• Manufacturing & Mining: These industries are resource-intensive and often have significant environmental impacts. BRSR compliance helps them showcase efforts to reduce emissions, manage waste, and adopt sustainable practices.

• Energy Sector: Companies in the energy sector can highlight renewable energy adoption, carbon reduction, and energy efficiency advancements.

• Heavy Industries: These sectors benefit from transparency in their environmental and social practices, helping them mitigate risks and showcase responsible practices.

Structure of a BRSR Report: What to Include 📝

The BRSR report is divided into three main sections:

1. General Disclosures:

2. Management and Process Disclosures:

3. Principle-Wise Performance:

The 9 Principles of BRSR 🌱

BRSR is guided by nine core principles, each of which addresses a key aspect of corporate responsibility:

1. Integrity and Ethics: Ensures ethical governance and transparency in business operations.

2. Sustainable Products: Encourages the adoption of sustainable practices across the product lifecycle.

3. Employee Well-being: Focuses on ensuring employee health, safety, and equal opportunities.

4. Stakeholder Interest: Engages with stakeholders, ensuring transparency in decision-making.

5. Human Rights: Promotes respect for human rights within and outside the organization.

6. Environment: Encourages businesses to manage energy, reduce emissions, and minimize waste.

7. Regulatory Policy: Ensures compliance with industry regulations and fair competition.

8. Inclusive Growth: Promotes business practices that benefit marginalized and underserved communities.

9. Consumers and IT: Focuses on consumer protection, including cybersecurity and data privacy.

BRSR vs. Global ESG Reporting Standards 🌍

BRSR is closely aligned with global ESG reporting frameworks but is tailored for the Indian regulatory landscape. Here's how BRSR compares with international standards:

• International Alignment: BRSR shares similarities with frameworks like GRI, SASB, and the Task Force on Climate-related Financial Disclosures (TCFD).

• Global Investor Confidence: By adopting BRSR, Indian companies are positioned to align with global ESG standards, making them more attractive to international investors.

How to Prepare for BRSR Reporting: A Step-by-Step Guide 🛠️

1. Assess Your Current ESG Practices:

2. Align with the 9 Principles of BRSR:

3. Set Up Data Collection Systems:

4. Engage Stakeholders:

5. Prepare the BRSR Report:

Timeline and Deadlines for BRSR Reporting 🗓️

• FY 2025-26: The first BRSR reporting cycle for the top 1,000 companies.

• Subsequent Years: BRSR reporting will remain an annual requirement.

• Voluntary Compliance: Smaller companies and unlisted entities are encouraged to voluntarily adopt BRSR for future sustainability preparedness.

The Benefits of BRSR for Companies and Investors 💼💰

• For Companies:

• For Investors:

Challenges and the Future of BRSR in India 🌟

• Challenges:

• The Future:

Conclusion: BRSR as a Tool for Long-Term Success 🌍🔍

BRSR reporting is not just about compliance—it's about building a sustainable, transparent, and responsible business. By adopting BRSR, companies not only adhere to SEBI’s guidelines but also gain a competitive edge in today’s ESG-driven market. As India moves toward a more sustainable future, BRSR will play a pivotal role in shaping the corporate landscape.

By aligning with the 9 principles and committing to sustainability, companies can build long-term value for both shareholders and society at large, positioning themselves as leaders in corporate responsibility. 🌱

𝐄𝐦𝐚𝐢𝐥: sachin.sharma@sgs.com or

𝐌𝐞𝐬𝐬𝐚𝐠𝐞: Sachin Sharma

𝐁𝐨𝐨𝐤 𝐚 F̳R̳E̳E̳ 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐢𝐨𝐧 𝐜𝐚𝐥𝐥: https://lnkd.in/g23UV