Business Responsibility and Sustainability Reporting

What is BRSR?

BRSR's full form is Business responsibility and sustainability reporting, introduced by SEBI (Security and Exchange Board of India). Business Responsibility and Sustainability Report (BRSR) is a report form meant for listed entities to display their performance against the nine principles of the “National Guidelines on Responsible Business Conduct, (NGRBC)”. Evolved from its predecessor – BRR (Business responsibility reporting) which was introduced by SEBI in 2012. BRR was introduced as a voluntary ESG reporting standard for listed Indian companies. After the release of NGRBC in 2019, BRSR was introduced in 2021, (replacing BRR) mandating the top 1000 listed companies by market cap to start reporting about the Environmental, Societal, and governance impacts from FY 2022-23.

The ESG Shift

Sustainability reporting of the ESG aspects has been gaining momentum in India. The shift towards BRSR has been due to many factors, like growing demand from investors, communities/societies, customers, and stakeholders for ESG reporting and the need to align with the global reporting standards.

BRSR is meant to ensure that investors have access to standardized disclosures of the company’s performance on the ESG or Environmental, Social, and Governance parameters. Access to relevant and comparable information will enable stakeholders to identify and access sustainability-related risks and opportunities of the company & make better decisions.

It will help set higher standards for businesses to demonstrate their sustainability objective, positions, and performance, resulting in long-term value creation in terms of the Three P’s i.e. People, Profit, and Planet. Higher standards of ESG disclosures and transparency will help in attracting more capital and investments.

Before BRSR Era

Before the introduction of BRSR, Sustainability reporting was voluntary and there was a lack of standardization in non-financial reporting in India. Many reporting standards were used making it difficult for the stakeholders to access the company's sustainability performance. Also, the existing frameworks did not comprehensively cover all the sustainability indicators making it difficult to access. The introduction of BRSR and mandating it, helped in addressing these challenges making it easier to access the sustainability efforts of the companies. BRSR is closely aligned with international standards like GRI and SASB and helped standardize the sustainability reporting landscape.

Are Unlisted Companies covered under BRSR?

As per the Ministry of Corporate Affairs Committee recommendation – the applicability may be extended to unlisted companies based on specific thresholds of turnover or paid-up capital. The BRSR has two formats for disclosures: BRSR comprehensive for listed companies and lite versions for unlisted companies. The committee recommends, that voluntarily smaller unlisted companies can report on BRSR lite.

Structure of BRSR

The BRSR is divided into 3 parts –

Section A – General disclosures (This disclosure sought general details about the organization such as - name, CIN, registered office address, contact details, paid-up capital, name and contact details of the person responsible for BRSR, details about the operations, products, turn over, and more. Section B – Management and process disclosures (This section deals with the approach of management towards the NGRBC principles upon which the BRSR reporting is based upon).

Section C – Principal-Wise performance disclosure (This section deals with disclosures aligned with the 9 principles of NGRBC).

It is sub-classified into 2 sections – Essential indicators and Leadership indicators

Essential indicators are Mandatory whereas leadership indicators are voluntary in nature.

Introduction of BRSR Core

On July 12, 2023, Based on the recommendations of the ESG Advisor Committee and under public consultation, the Board decided to introduce the BRSR Core. SEBI released the ‘BRSR Core’ framework and concurrently?the assurance and disclosure requirements for BRSR Core, along with ESG disclosures for the value chain and its corresponding assurance requirements.

Changes in the Comprehensive BRSR Framework

With the introduction of ‘BRSR Core’, in Section A, it is mandatory for the listed company to furnish details about the assurance provider’s name and explicitly state the type of assurance obtained.?

In Section C, the ‘Essential indicators’ have undergone updates to incorporate new KPIs from the BRSR Core framework?while certain KPIs have been transposed from Leadership to Essential Indicators.

From FY 2023–2024, the top 1000 listed entities (by market capitalization) shall make disclosures as per the updated BRSR format, as part of their Annual Reports.

1. Reasonable Assurance of BRSR Core:

Listed companies shall mandatorily undertake reasonable assurance of the BRSR Core, as per the glide path specified in the following table:

Financial Year

Applicability of BRSR Core to top listed entities (by market capitalization)

2023-24 - Top 150 listed companies

2024-25 - Top 250 listed companies

2025-26 - Top 500 listed companies

2026-27 - Top 1000 listed companies

2. ESG disclosures for value chain:

Disclosures for the value chain shall be made by the listed company as per BRSR Core, as part of its Annual Report. For this purpose, the value chain shall encompass the top upstream and downstream partners of a listed entity, cumulatively comprising 75% of its purchases/sales (by value) respectively. Listed entities shall report the KPIs in the BRSR Core for their value chain to the extent it is attributable to their business with that value chain partner.

ESG disclosures for the value chain shall apply to the top 250 listed entities (by market capitalization), on a comply – or - -explain basis from FY2024-25        

The limited assurance of the above shall be applicable on a comply-or-explain basis from FY2025-26