INTRODUCTION:
ESG Reporting is the single most crucial aspect of business reporting currently. The BRSR framework was developed in India by the Security and Exchange Board of India (SEBI). Since businesses are gaining increasing importance in terms of the interest that stakeholders like clients, investors, regulatory authorities, and other interested parties are showing in them, it is essential for businesses to report about more than just their financial state; they should also report about their environmental, social, and governance performance.
ESG REPORTING:
The word ESG stands for Environmental Social Governance. Which also explains that,
- Environmental section which has details related to Greenhouse gas emission, Energy consumption, Water discharge, Recycling, Renewable energy usage, Waste Management.
- Social refers to the Employee Welfare and their training Gender diversity, Human Rights, Health and Safety, etc.,
- Governance were related to how the company managed and governed like Board composition, Anti-corruption measures, Risk management, Whistle-blower complaints
BRSR REPORT:
The Business Responsibility and Sustainability Reporting (BRSR) is the sustainability reporting norm prescribed by the Securities and Exchange Board of India (SEBI). BRSR has replaced the previous norm of Business Responsibility Report (BRR), and it aims at standardizing the disclosure of sustainability reports by companies. This framework is based on National Guidelines on Responsible Business Conduct (NGRBC).
BRSR Filing is mandatory for Top 1000 listed companies by market capitalization. Other companies like LLPs, unlisted, private and other listed companies who were not at the top 1000 and start-ups may voluntarily adopt the ESG reporting according to their investors and customer requirements.
BRSR CORE:
BRSR Core is a part of BRSR that concentrates on those ESG metrics which are most important for investors and stakeholders. Whereas the information provided in the BRSR is extensive, BRSR Core includes only those metrics that require external evaluation or assurance. The number of companies has been changing every financial year,
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FY 2022-2023
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FY 2023-2024
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Top 150 listed entities
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FY 2024-2025
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Top 250 listed entities
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FY 2025-2026
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Top 500 listed entities
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FY 2026-2027
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All top 1000 listed entities
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An ESG Indicator is a parameter which used to assess the company’s sustainability performance like, Energy used during the year, water usage, Carbon emissions, Whistle-blower complaints. This indicator shows whether BRSR core report is needed or normal BRSR report will be sufficient.
STEPS TO FILE BRSR REPORT:
BRSR filing is not done separately as a document on the MCA portal.
Typically, it includes:
- Gathering ESG data from respective departments.
- Preparing BRSR disclosures in the required format.
- Providing independent assurance for BRSR Core indicators wherever applicable.
- Inserting the BRSR report in the Annual Report.
- Filing the Annual Report with the stock exchanges.
- Publishing the Annual Report on the company website.
Therefore, it can be observed that the BRSR is an essential component of the Annual Report.
BENEFITS OF FILING BRSR REPORT:
BRSR AND ESG reporting filing has several advantages like it enhance investor’s confidence on the entity, it improves the company’s corporate reputation, better access to capital, increase in transparency, stronger risk management. Basically companies with ESG reporting has been constantly preferred by investors, lenders, business partners and customers.
CONCLUSION:
Both BRSR and BRSR Core play a pivotal role in enhancing transparency and sustainability among Indian organizations. Whereas BRSR is a means for corporations to report on their ESG performance, BRSR Core enhances the veracity of such ESG disclosures by way of independent assurance. Given the increasing demands on sustainability from both the regulatory side and investors alike, it is imperative for businesses to embrace ESG reporting standards.