Insights on BRSR Compliance: Unlocking Sustainable Practices and Overcoming Challenges

As we navigate the process of filing Business Responsibility and Sustainability Report (BRSR) for our clients, we have made several significant observations:

1. Partial Compliance with NGRBC Principles:

Our observations reveal that many companies have achieved partial compliance with various NGRBC principles. However, many companies lacked policies related to Principle 2 (Sustainable Sourcing), Principle 5 (Human Rights), Principle 6 (Environment/ESG Policy), and Principle 7 (Public Advocacy).?

2. Overcoming Terminology & Data Challenges:

Companies often find the BRSR compliance process daunting due to unfamiliar terminologies and the need for comprehensive documentation. For instance, while many companies actively provide non-occupational benefits to their employees, including mental health support, dental checkups, awareness on sedentary lifestyles like Zumba and yoga, they struggle to capture and record these initiatives effectively. To address this challenge, it is advisable for companies to maintain attendance records or a calendar to track and document such activities, ensuring they are accounted for in the BRSR report.?

Furthermore, in terms of reporting Principle 6 or environment-related data, several companies failed to monitor their waste generation. However, in one instance we successfully traced the non-hazardous waste production by utilizing documentation for waste sold as scrap, such as paper, cardboard, discarded steel rods etc. It is essential for companies to start formulating inventory for basic environmental data collection like waste production, disposal, water consumption, electricity consumption, fuel consumption, scope 1 (company owned vehicle trips) etc. The difficulty becomes even greater when dealing with leased assets, as the electricity bill and water consumption are shared among different companies.?

3. Product-based vs. Service-based Companies:

A noteworthy observation relates to the differing focus areas of product-based and service-based companies within the BRSR compliance framework. Product-based companies often prioritize environmental compliance due to their direct impact on natural resources. Conversely, service-based companies tend to place more emphasis on social responsibility initiatives. We have noticed that the BRSR format appears more suitable for manufacturing industries. However, as GRI is gradually introducing sector-specific disclosure for approximately 40 sectors, BRSR might do the same in the future for different sectors.?

4. Extending Responsible Practices & Policies to Value Chain:

We have observed that many companies overlook the integration of responsible practices within their value chain. By engaging with suppliers, contractors, and other stakeholders, companies can ensure ethical and sustainable practices are followed throughout the entire supply chain. This extension of responsibility showcases a company's comprehensive commitment to responsible business conduct and contributes to the overall sustainability of their industry.

5. Finding Material ESG Topics and Stakeholder Engagement:

Many companies lack specific commitments related to Environmental, Social, and Governance (ESG) aspects. BRSR's Principle 4 (Stakeholder Engagement) can serve as a valuable tool for companies to identify their material ESG topics and incorporate them into their business strategies. By actively engaging stakeholders, companies gain insights into the expectations and concerns of their various stakeholders, enabling them to prioritize and address relevant sustainability issues effectively. Moreover, by conducting Stakeholder Engagement and Materiality Assessment, companies can address Section-B (material topics) and Principle 4 questions together.?

6. Embracing Collective Action:

Some companies perceive BRSR as a mandatory compliance requirement and may even deflect responsibility onto other polluting industries. However, it is crucial for companies to see themselves as central players in the larger sustainability puzzle, where collective action is essential. By adopting a proactive approach and taking responsibility for their impact, companies can become drivers of positive change and contribute to a sustainable future.

It is important to note that these observations are not exhaustive and also do not include leadership indicators. Thereby making it essential for companies to also keep in mind the various leadership indicators while formulating policies and procedures regarding all 9 NGRBC principles.