The Security and Exchange Board of India (SEBI) on Monday notified the new disclosure norms pertaining to Business responsibility and sustainability reporting by listed entities.
“In recent times, adapting to and mitigating climate change impact, inclusive growth and transitioning to a sustainable economy have emerged as major issues globally. There is an increased focus of investors and other stakeholders seeking businesses to be responsible and sustainable towards the environment and society. Thus, reporting of company’s performance on sustainability-related factors has become as vital as reporting on financial and operational performance,” the SEBI notified.
The new report namely Business Responsibility and Sustainability Report (BRSR) will replace the existing Business Responsibility Report (BRR).
SEBI has decided to introduce new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). The BRSR is accompanied by a guidance note to enable the companies to interpret the scope of disclosures.
The BRSR seeks disclosures from listed entities on their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct’ (NGBRCs) and reporting under each principle is divided into essential and leading indicators. The essential indicators are required to be reported on a mandatory basis while the reporting of leading indicators is on a voluntary basis. Listed entities should endeavor to report the leading indicators also.
The BRSR is intended towards having quantitative and standardized disclosures on ESG parameters to enable comparability across companies, sectors, and time. Such disclosures will be helpful for investors to make better investment decisions. The BRSR shall also enable companies to engage more meaningfully with their stakeholders, by encouraging them to look beyond financials and towards social and environmental impacts.
The listed entities already preparing and disclosing sustainability reports based on internationally accepted reporting frameworks (such as GRI, SASB, TCFD, or Integrated Reporting) may cross-reference the disclosures made under such framework to the disclosures sought under the BRSR.
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