Business Responsibility and Sustainability Report

Business Responsibility and Sustainability Report

Topic: Economy

Context: Regulator SEBI on Monday came out with disclosure requirements under business responsibility and sustainability reporting, covering environmental, social and governance perspectives, which will be applicable on the top 1,000 listed entities by market capitalisation.

Concept:

• The new report — Business Responsibility and Sustainability Report (BRSR)– will replace the existing Business Responsibility Report (BRR).
• The move is expected to bring in greater transparency and enable market participants to identify and assess sustainability-related risks and opportunities.
• Under BRSR, listed entities need to disclose about an overview of the entity’s material ESG (environmental, social and governance) risks and opportunities, approach to mitigate or adapt to the risks along with financial implications of the same.
• In addition, sustainability related goals and targets and performance against the same need to mentioned in the report.
• Environment related disclosures cover aspects such as resource usage (energy and water), air pollutant emissions, green-house (GHG) emissions, transitioning to circular economy, waste generated and waste management practices, bio-diversity.
• Social related disclosures would cover the workforce, value chain, communities and consumers.
• In the social related disclosure, SEBI said entities need to disclose about gender and social diversity including measures for differently abled employees and workers, turnover rates, median wages, welfare benefits to permanent and contractual employees / workers, occupational health and safety, trainings.
• At communities’ level, listed entities will have to make disclosures on Social Impact Assessments (SIA), Rehabilitation and Resettlement, Corporate Social Responsibility, among others.
• In the case of consumers, the regulator said listed entities need to disclose on product labelling, product recall, consumer complaints in respect of data privacy, cyber security among others.
• The BRSR will be applicable on the top 1,000 listed entities by market capitalization.
• In order to give time to companies to adapt to the new requirements, SEBI said the reporting would be on voluntary basis for financial year 2021-22 and on a mandatory basis from 2022-23.
• The filing of the BRR containing ESG disclosures was first introduced for listed entities in 2012 and since then, a number of developments have taken place.
• Overall, higher standards of ESG disclosures and transparency, will help in attracting more capital and investment.