The Securities and Exchange Board of India has recently introduced crucial updates to its BRSR reporting framework aiming to enhance transparency, comparability, and the overall quality of environmental, social, and governance disclosures by Indian companies. But, what is BRSR?
Business Responsibility and Sustainability Report (BRSR) is a framework created by SEBI to promote the integration of sustainable and responsible practices within companies. Its primary focus is on measuring and reporting companies’ performance in ESG aspects, effectively demonstrating their positive contributions to society. The latest December 2024 updates of BRSR reflect SEBI’s growing focus on ESG reporting and sustainability, with an emphasis on making the reporting process more standardized, streamlined, and impactful for businesses across industries.
Key updates include:
- Industry Standards for Reporting: A key development is the introduction of industry standards for BRSR Core reporting. These standards have been developed by an Industry Standards Forum (ISF) in collaboration with prominent industry bodies like ASSOCHAM, CII, and FICCI. The new standards seek to ensure consistency in ESG reporting across different sectors, making it easier for investors and stakeholders to compare the performance of companies. They also aim to simplify reporting by providing clear guidelines and templates for companies, ultimately enhancing the reliability and accuracy of disclosed ESG data.
- Leadership Indicator for Green Credits: Companies must disclose green credits (these are rewards for actions like reducing emissions) generated or procured, along with their top 10 value chain partners, highlighting India’s commitment to fostering climate-positive actions.
- Deferral of Value Chain Disclosures: Companies need to report how sustainable their value chain is (their suppliers and customers). But SEBI has given more time to prepare:
- New Deadline: They can start reporting by the financial year 2025-26.
- Smaller Scope: Instead of reporting for every supplier or customer, they only need to focus on those who make up at least 2% of their total purchases or sales.
- Flexible Reporting: For the first year of value chain reporting, companies can choose to report the previous year data voluntarily.
The revised circular also brings changes to the assurance requirements for BRSR Core disclosures. Previously, a third-party reasonable assurance was mandated, but the new circular introduces the option for either “assurance” or “assessment” based on standards developed by the ISF. This change provides companies with more flexibility while maintaining the integrity of ESG reporting. Third-party assessors will play a crucial role in verifying ESG data, ensuring that companies are meeting the updated guidelines.
Why Do These Changes Matter?
These updates encourage Indian companies to take sustainability seriously while making the reporting process easier and more practical. It also gives investors and stakeholders more confidence in the information shared by companies.
The updates to the BRSR reporting in India signal a significant step toward enhanced sustainability practices. Companies should familiarize themselves with the new industry standards and engage proactively with their value chain partners to ensure timely and accurate ESG reporting. By embracing these changes, companies can not only comply with SEBI’s requirements but also build trust with stakeholders, promote sustainable growth, and contribute to a more transparent and responsible corporate ecosystem. These updates provide a unique opportunity for businesses to align their ESG strategies with regulatory expectations while advancing their sustainability goals.
How Can Companies Make This Easier?
Using software designed that can simplify this process by:
- Automating data collection.
- Making sure the reports meet SEBI’s standards.
- Keeping up with changing regulations.
As ESG reporting becomes more crucial, early adoption of BRSR reporting software gives your business the edge. Benchmark Gensuite’s software simplifies ESG reporting, aligning with SEBI’s requirements through automated data integration, ensuring compliance, and adapting to evolving regulatory needs.
Invest in a robust BRSR reporting solution today and future-proof your sustainability efforts! Request a demo with our experts to get started!