The goal of BRSR is to provide investors, regulators, and other stakeholders with dependable, comparable non-financial data by acting as a thorough, standardized channel for businesses to disclose their environmental, social, and governance (ESG) performance.
Importance of the BRSR
- ESG As a Fundamental Element of Business Practices
BRSR encourages organisations to incorporate ESG into their operations and strategic direction. Companies disclose information on a wide variety of areas — including energy use/waste management, employee welfare, governance, and social responsibility — that go beyond just corporate shareholder interests.
- Transparency, Accountability, And Trust
Through compliance with BRSR, an organisation is committing itself to a standardised, quantifiable and qualitative form of reporting that allows stakeholders to easily see what their ESG practices are and make meaningful comparisons with that of other organisations and other industries.
- BRSR Is Compatible With Global Standards
BRSR was developed specifically for India. However, BRSR builds off of a number of globally accepted ESG reporting frameworks including the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD).
The compatibility of Indian companies with global standards gives investors and stakeholders the ability to compare Indian companies with companies from other parts of the world — thereby increasing the potential to attract global investors and ESG-conscious stakeholders.
Format and Structure of BRSR Reporting
The structure of reporting under BRSR is divided into three major categories.
General Disclosure - General company information, such as location of operations, product/service information, number of employees, and any other compliance information.
Management and Process Disclosure - Company Policy, Process and Governance Structure, and how a company implements responsible business practices aligned with ESG-related principles.
Performance Disclosure - Performance of Company against the nine principles set forth in the National Guidelines on Responsible Business Conduct (NGRBC) across Environmental, Social and Governance dimensions.
Essential (Mandatory) and Leadership (Voluntary Recommended) Indicators of Performance are identified in these disclosures – which provides flexibility to companies based on the maturity and available resources to implement practices aligned with BRSR expectations.
BRSR is not simply a checklist for compliance. In addition to quantitative data points (energy consumption, volume of waste produced, number of employees), BRSR requires qualitative disclosures (governance practices, community involvement, and ESG policies), making disclosures meaningful and providing companies the opportunity to be compared through standard definitions/indicators using NGRBC defined terminology.
How to Use Sustrack as A Consultancy
Sustrack provides BRSR-reporting services to assist companies (typically startups) with navigating the new ESG reporting requirements by helping them comply with SEBI's BRSR guidelines.
Sustrack consists of dedicated professionals (many of whom hold IIT certifications) who have years of experience in ESG reporting. They assist companies with understanding and complying with SEBI's BRSR requirements, while ensuring that all reports prepared by companies are consistent with global ESG standards.
Sustrack's methodology includes collecting data from Environmental, Social and Governance (ESG) areas; performing gap analyses and drafting responses to guide the preparation of the BRSR template in its entirety (Sections A, B and C) and both Essential Indicators and Leadership Indicators.
If a company wants to do its ESG Reporting using a phased approach or at a lower level; Sustrack offers "BRSR Lite," a more flexible and less complex version of the BRSR that would be beneficial to a small to mid-sized business plus/less an example for companies that have recently started to report on ESG.
For companies that want to implement best practices to address transparency, stakeholder trust and readiness of investors for full ESG reporting, Sustrack's "BRSR Comprehensive" solution provides full disclosure, reporting and alignment with global sustainability frameworks.
To summarize, Sustrack offers companies a resource in navigating through the complexities of complying with ESG regulations and allows businesses to concentrate on their goal of growing sustainably.
What's New: Recent Developments & Emerging Expectations
The ESG landscape in India has been changing quickly. Some of these changes were made known to companies last month when the BRSR framework was updated.
Under 'BRSR Core', starting December 2024, reporting on ESG has changed significantly, and beginning in FY 25-26, there will be gradual implementations of certain disclosures, such as the requirement to report ESG value-chain disclosures (upstream and downstream partners).
The requirements for "assurance" have also been relaxed. In place of having some disclosures be solely subject to "assurance," they may now be included in the category of "assessment or assurance". This will provide less of a burden for companies and will improve the level of transparency for these companies.
Principle 6 of the BRSR includes the addition of a new leadership indicator that provides information on Green Credits that companies generate or procure and companies' major value-chain partners. This shows how the BRSR has become increasingly sophisticated in providing measures of the impact of ESG.
Based on this growth of the BRSR, we expect that it will continue to adapt as the ESG market develops and as global standards and more sophisticated measurement of sustainability evolve. Early adopters of the BRSR (and potentially those who exceed the minimum standards of disclosure) will be seen as ESG leaders and will be well positioned for future regulations and scrutiny from investors.
Final Thoughts: Reporting Responsibly Is About More Than Following the Rules—It's About Creating Value Through More Sustainable Business Practices
BRSR represents a way companies in India can demonstrate their commitment to corporate social responsibility through their environmental, social, and governance (ESG) reporting. It has been developed to provide a consistent and transparent approach to reporting on companies' ESG impacts to increase stakeholder confidence in their capabilities.
Individuals who are working with a mid-sized enterprise looking to begin its own ESG efforts or are investors interested in gaining insight into how these organisations are operating will benefit from using BRSR as an effective means of communicating such information. Additionally, consulting firms such as Sustrack and others are producing reports tailored to support the delivery of high-quality ESG reports.
Ultimately, BRSR is a major opportunity beyond fulfilling the requirements imposed by law; it also represents an opportunity to transform, create trust, and grow businesses sustainably.
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