BRSR: Business Responsibility and Sustainability Report

“Sustainability is not an option; it’s a responsibility.”— Unknown.

Introduction

“When helping the poor, keep the camera at home”. The key intent is that we should not try to get mileage out of charity. While it is quite logical and purposeful, there are many instances in life when we propagate what we are doing to help the needy, the message should reach larger audiences. Like when the government announces a scheme for the people below the poverty line, it should be shared with as many poor people as possible (although it should not be used for getting votes later!).

Content: BRSR: Business Responsibility and Sustainability Report

1. What is BRSR?
2. What are the 9 Principles?
3. Why is BRSR important?
4. What are the key challenges?

Read More: https://bit.ly/C2CC2G (Cradle to Cradle and Cradle to Grave)

Objective

BRSR is pushing companies to move from ‘doing no harm’ to ‘contributing proactively for a change’. This will result in increased expectations from stakeholders for enhanced ESG (Environment, Social, Governance) performance.

The key objective for evaluation by SEBI concerning the BRSR is to provide a platform for companies embarking on their sustainability journey to understand whether their sustainability ambitions are in line with their pace of growth. The BRSR is divided into 2 sections: the ‘Essential’ and ‘Leadership’ indicators to help companies understand their position and to help them identify their gaps concerning the best practices related to sustainability being followed by leaders in their respective sectors.

Once you go through the article, you will understand the meaning of BRSR, what the 9 principles are, why it is important, and what the key challenges are.

Read More: https://bit.ly/LinearCircularEconomy

Definition: ISO 59004: 2024

Circular Economy (Cl 3.1.1): Economic system that uses a systematic approach to maintain a circular flow of resources by recovering, retaining or adding to their value while contributing to sustainable development. 

Sustainable Development (Cl 3.1.11): Development that meets the environmental, social economic needs of the present without compromising the ability of future generations to meet their own needs.

Life Cycle (Cl 3.2.4): Consecutive and interlinked stages in the life of a solution.

Linear Economy (Cl 3.5.10): Economic system where resources typically follow the pattern of extraction, production, use and disposal. 

End of Life (Cl 3.5.30): <Product> point in time when a product is taken out of use and its resources are either recovered for processing or disposed of. 

Life Cycle Assessment (Cl 3.6.8): Compilation and evaluation of the inputs, outputs and potential environmental impacts of a product system throughout its life cycle. 

Read More: https://bit.ly/ReduceRecyleReuse

Detailed Information

Our world is facing several global challenges: climate change, transitioning from a linear economy to a circular one, increasing inequality, and balancing economic needs with societal needs. Investors, regulators, as well as consumers and employees, are now increasingly demanding that companies should not only be good stewards of capital but also of natural and social capital and have the necessary governance framework in place to support this. 

India has emerged as a conscious aspirant and shown promise and capability to take great initiative in paving the way in combating climate change and meeting the Sustainable Development Goals (SDGs) of the United Nations in many of its regulatory schemes internally such as introduction of the Business Responsibility and Sustainability Reporting (BRSR) by SEBI in 2021. The sustainability reporting format is based on the nine principles of National Guidelines for Responsible Business Conduct (NGRBC) introduced by SEBI. 

The Securities and Exchange Board in India (SEBI) developed the Business Responsibility and Sustainability Reporting (BRSR) to mandate Indian companies to provide quantifiable metrics on sustainability-related factors, such as respect for human rights or environmental protection.

Read more: https://bit.ly/WhatESG

The introduction of Business Responsibility Reporting (BRR) guidelines in 2009 laid the foundation for India’s ESG regulatory framework. The new BRSR, in effect since 2023, is more closely aligned with globally accepted reporting frameworks like the GRI and TCFD. It requires the top 1,000 listed companies in India to respond to 140 questions, divided into 98 essential indicators (mandatory) and 42 leadership indicators (voluntary).

Further, as per SEBI Circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12th July 2023, the top 1000 listed entities by market capitalisation are required to make disclosures as per the updated BRSR format (which includes the BRSR Core disclosure and assurance requirements, ESG disclosures for value chain, and assurance requirements), as follows:

Read More: https://bit.ly/ClimateChnages

The disclosure requirements are grouped into nine core categories, based on the principles of the National Guidelines for Responsible Business Conduct (NGRBC) introduced by SEBI.

The BRSR report should be published as an integral part of a company’s annual report, allowing for transparent disclosure of non-financial performance alongside the financial parameters.

Read More: https://bit.ly/LifeCycleAssesment

BRSR Principles with Essential and Leadership Indicators

 Read More: https://bit.ly/GreenWashiing

Read More: https://bit.ly/SDGCircularity

Importance of BRSR Implementation:

The implementation of BRSR (Business Responsibility and Sustainability Reporting) is highly significant for companies, stakeholders, and the broader society. The key reasons are:

• Enhances Transparency & Accountability
• Promote Sustainable Growth
• Strengthens Stakeholder Relationships
• Attracts Responsible Investments
• Aids Regulatory Compliance & Readiness
• Drives Strategic Decision-Making
• Contributes to National and Global Goals

Read More: https://bit.ly/CircularEconomyPrinciples

Key Challenges:

• Sudden change in reporting requirements: The sudden rise in the number of questions from 59 to 140, and detailed demand for Quantitative KPIs, may require updating processes and policies for implementing BRSR Requirements.
• Increase in cross-departmental inputs for BRSR: It covers a holistic view of companies’ financial and non-financial disclosures. This will require different departments, such as HR, EHS, IT, R&D, Purchasing, Operations, etc., to manage and consolidate data more effectively.
• Increase in performance expectations from stakeholders: BRSR is pushing companies to move from ‘doing no harm’ to ‘contributing proactively for a change’. This will result in increased expectations from stakeholders for enhanced ESG performance.

Read More: https://bit.ly/17SDGGoals

Conclusion:

The Business Responsibility and Sustainability Reporting (BRSR) framework marks a transformative shift in how businesses in India operate and disclose their impact. By integrating environmental, social, and governance (ESG) factors into core business strategy, BRSR fosters transparency, accountability, and long-term value creation. It not only enhances trust among stakeholders but also positions companies for sustainable growth in an increasingly responsible and conscious global economy.

Read More: https://bit.ly/3PillersSustainability

Read More: https://bit.ly/ISO59000Series

References:

SEBI guidelines for BRSR

Industry Experts

This is the 231^st article of this Quality Management series. Every weekend, you will find useful information that will make your Management System journey Productive. Please share it with your colleagues too.

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