01 Mar 2022
We are at a key moment in the evolution of sustainability. Transparency is fast becoming the new paradigm for responsible reporting and social responsibility. At the recent global event Glasglow Climate Change Conference COP26, nations took several decisions as a part of the collective effort to limit global temperature rise to 1.5 degree Celsius. Active participation of businesses is a principal driver in achieving these goals. Companies with sustainability at their core are already outperforming others in their sector. Leading businesses are making sustainability an integral part of their organizations and don’t view it as a mere compliance requirement.
The pandemic has impacted lives and disrupted world economies and financial markets. But it has been observed that the companies focused on sustainability have emerged as profitable businesses, despite the pandemic outbreak. The future holds unparalleled opportunities for businesses that heal rather than damage the society. Responsible businesses have an easier time attracting investors and building a better brand equity with stakeholders. Integrating sustainability more deeply into a company’s overall strategy is a great way to grow in the current business environment. If done right, sustainable practices lead to financial savings for organizations in the long run. Companies which integrate sustainability into their core business strategies and processes attract and retain talent and gain customer loyalty.
What is Business Responsibility and Sustainability Reporting (BRSR)?
Today, investors and other stakeholders are inclined towards businesses which are socially and environmentally responsible, and are not just focussed on financial gains. Thus, reporting of company’s performance on sustainability related factors has become as vital as reporting on financial and operational performance.
The Securities and Exchange Board of India (SEBI), in March 2021, came out with the Environmental, Social and Governance (ESG) related disclosure requirements named BRSR. SEBI mandated top 1,000 listed entities by market capitalisation to report their ESG performance in the prescribed format of BRSR. The BRSR requirements are based on the National Guidelines for Responsible Business Conduct (NGRBC), which mandate businesses to report on the following nine thematic pillars of business responsibility:
Conduct and govern themselves with integrity, and in a manner that is ethical, transparent, and accountable.
Provide goods and services in a manner that is sustainable and safe.
Respect and promote the well-being of all employees, including those in their value chains.
Respect the interests of and be responsive to all its stakeholders.
Respect and promote human rights.
Respect and make efforts to protect and restore the environment.
When engaging in influencing public and regulatory policy, businesses should do so in a manner that is responsible and transparent.
Promote inclusive growth and equitable development.
Engage with and provide value to their consumers in a responsible manner.
BRSR is an ESG disclosure that encompasses corporate strategy, risk management, broad oversight, performance and communication of companies. It also helps to address reputational and regulatory risk. The underlying intent of the BRSR can be said to be seamless alignment of the various regulatory frameworks with the long-term objectives and sustainability goals of the company, which are key requisites for the decision-making process of various stakeholders. BRSR will replace the existing Business Responsibility Report (BRR).
To equip corporate practitioners across industries and assist companies to benchmark their ESG performance, CII recently launched Business Responsibility and Sustainability Reporting training programs for all professionals. As a part of the program, experienced trainers will impart trainings via virtual sessions on widely used ESG metrices, disclosures and frameworks with a view to enable participants to build ESG strategies and framework within their organizations. The program will help the participants map BRSR with other globally used ESG metrices and disclosures and guide their organizations to integrate components of sustainability into business operations.
While the Indian reporting scenario continues to evolve rapidly, BRSR would serve as a base document for investors and other stakeholders to bring about comparability among businesses. The move is expected to bring in greater transparency and enable market participants to identify and assess sustainability-related risks and opportunities.