India’s Business Responsibility and Sustainability Report (BRSR)—a framework for environmental, social and governance (ESG) reporting—comes into effect in 2023. These new reporting standards represent an evolution from the voluntary guidelines first issued in 2009 by India’s Ministry of Corporate Affairs, which were further refined in the Business Responsibility Report (BRR) of 2012.

The Securities Exchange Board of India (SEBI)—the regulatory body for securities markets in India—has now designed the new BRSR to be interoperable with other internationally accepted reporting frameworks such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD).

The BRSR is the first framework in India that requires Indian companies to provide quantitative metrics on sustainability-related factors, as of fiscal year 2023—for eligible companies, April 2022 to March 2023.

What are the three main disclosure areas under the BRSR?

SEBI’s guidance document provides details on three kinds of disclosures—general, management and process, and “principle wise” (principle-based).

• General disclosures encompass basic company information. This includes addresses of offices and plants, details of products and services (these should account for 90% of total business turnover), exchanges where the company is listed, and reporting boundary, i.e., whether disclosures refer to a standalone entity or part of a consolidated portfolio of companies. Employee counts and representation by gender, diversity and inclusion and differently abled status are also required, along with data on employee turnover and number of complaints and grievances filed against the company.
• Management and process disclosures provide evidence that companies are adhering to the structures, policies and processes specified in the National Guidelines on Responsible Business Conduct (NGRBC). Disclosures provided in this section are not about adherence to specific principles outlined in the NGRBC, but about higher-level policy and management processes, including statements by directors and boards regarding governance, leadership and oversight. Companies need to show that policies not only exist, but they have been approved and enacted in the context of time-bound company goals.
• Principle wise performance disclosures are focused on more quantitative data relating to 9 basic principles of the National Guidelines on Responsible Business Conduct (NGRBC). This set of disclosures within the BRSR is aimed at helping organizations demonstrate how their operations impact environmental and social metrics. Businesses need to demonstrate with clear data and examples on how they are integrating fundamental principles in their key processes and measuring these decisions through KPIs. To this end, companies need to disclose the percentage of R&D and capital expenditure investment as well.

Defining and quantifying adherence to principles

As mentioned above, the BRSR is based on nine principles defined in the BRR but clarifies and adds detail regarding which companies must report (the top 1,000 NSE listed companies by market capitalization) and what they must report (various kinds of disclosures).

Each principle wise disclosure has two components, essential indicators and leadership indicators. Essential indicators are mandatory and include data on environmental factors such as energy, emissions, water and waste; as well as social impact of the company’s operations, along with details of employee training around these principles.

Leadership indicators, on the other hand, are voluntary and aimed at companies “which aspire to progress to a higher level in their quest to be socially, environmentally and ethically responsible,” as stated in the reporting framework. These include ethics awareness programs for value chain partners, product and service life cycle assessments, employee protections such as insurance and transition programs. Leadership indicators also comprise advanced reporting on biodiversity, energy consumption, scope 3 greenhouse gas emissions and supply chain disclosures.

As of June 2023, the BRSR framework is comprised of 140 questions — 98 on essential indicators and 42 on leadership indicators.

The nine principles and their disclosures required in the BRSR are:

1. Businesses should conduct and govern themselves with integrity, and in a manner that is ethical, transparent and accountable. Performance indicators include having anti-corruption and anti-bribery policies in place, details of regulatory actions against the organization, and details of conflict-of-interest complaints.
2. Businesses should provide goods and services in a manner that is sustainable and safe. Performance indicators include investments to improve environmental and social impacts, details of reclamation, reuse, recycling and disposal procedures, and details of extended producer responsibility plans and life cycle assessments.
3. Businesses should respect and promote the well-being of all employees, including those in their value chains. Performance indicators include percentage of employees covered by health and accident insurance, paternity benefits, day care benefits and retirement benefits; amount of accessibility for differently abled workers and percentage of unionized workers.
4. Businesses should respect the interests of and be responsive to all their stakeholders. Performance indicators include having stakeholder groups that include vulnerable and marginalized people, number of communication channels used and frequency of engagement, and details of consultation processes.
5. Businesses should respect and promote human rights. Performance indicators include percentage of employees who have received training on human rights issues, percentage of workers paid minimum wage, and board and management remuneration in comparison to industry medians.
6. Businesses should respect and make efforts to protect and restore the environment. Performance indicators include year-over-year electricity and fuel consumption, water withdrawal by source (such as surface water, groundwater and seawater), air emissions (such as NOx, SOx and VOCs) and environmental impact assessments.
7. Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent. Performance indicators include number of affiliations with trade and industry associations, details of issues related to anticompetitive conduct and details of public policy positions advocated by the organization.
8. Businesses should promote inclusive growth and equitable development. Performance indicators include details of social impact assessments, information on projects involving rehabilitation and resettlement and details of procurement policies that favor marginalized or vulnerable groups.
9. Businesses should engage with and provide value to their consumers in a responsible manner. Performance indicators include consumer complaint and feedback mechanisms, details of safety-related product recalls and existence of cybersecurity and data privacy policies.

As India moves to mandatory ESG reporting, the BRSR is aimed at improving compliance, consistency and communication around non-financial disclosures.

IBM Envizi’s product suite can help organizations report to multiple ESG frameworks

With IBM Envizi, organizations can streamline the way they collect, manage and report their ESG data, allowing them to more efficiently comply with the requirements of different ESG reporting frameworks.

Envizi can help organizations to:

• Automate data (structured and unstructured) capture across environmental, social and governance domains into an auditable, single system of record. This data can be sliced and diced to align to the needs of multiple reporting frameworks as required. The above helps improve reporting efficiency.
• Help manage people, processes, external references and supporting documentation for reporting purposes with tools such as the Sustainability Reporting Manager within the ESG Reporting Frameworks module. Data from the platform can be pulled directly to create answers for specific frameworks, and responses are stored in a single repository.