"Integrating ESG into Corporate India: The Evolution and Impact of

BRSR"

By
Prof Divya Singhal, Professor, General Management and Public Policy and Chairperson-
Centre For Social Sensitivity and Action, Goa Institute of Management

Environmental, Social, and Governance (ESG) standards are crucial for assessing an
organization's impact beyond its financials. These standards, encompassing 'Environmental,'
'Social,' and 'Governance' areas, provide a comprehensive view of a company's ecological
impact, social responsibilities, and governance practices. As the world increasingly
emphasizes sustainable and ethical business practices, India aligns with this global trend.

The Advent of Business Responsibility and Sustainability Reporting (BRSR) in India

In 2021, the Securities and Exchange Board of India (SEBI) introduced the Business
Responsibility and Sustainability Reporting (BRSR) framework, requiring the top 1,000 listed
entities by market cap to file BRSR reports from FY 2022-23. This move aligns Indian
corporate reporting with global ESG standards, broadening the scope of disclosure and
encouraging sustainable business practices. The BRSR framework, according to a 2023 EY
report titled “Business Responsibility and Sustainability Reporting: The evolution of
sustainability reporting in India,” is a significant step in this direction, and the BRSR format
acts as one standard for all in India for ESG-related disclosures.

The BRSR framework encourages companies to adopt sustainable business practices and
disclose information related to their environmental, social, and governance (ESG)
performance. The Business Responsibility and Sustainability Reporting (BRSR) framework is
structured into two distinct sections: Essential and Leadership indicators. This bifurcation is
designed to assist companies in comprehending their current sustainability positioning and
identifying potential improvement areas. By comparing themselves against these indicators,
businesses can gauge how they measure up to the industry's best practices in sustainability,
as demonstrated by leading organizations within their respective sectors. This approach
highlights gaps and provides a roadmap for companies aspiring to reach the forefront of
sustainable business practices.

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Nine Pillars of BRSR

The BRSR framework is grounded in nine principles, ranging from ethical conduct and
sustainability in goods and services to promoting human rights and environmental
protection. These principles are designed to guide companies in adopting responsible
business practices and transparently disclosing their ESG performance.

PRINCIPLE 1. Businesses should conduct and govern themselves with integrity, and in a
manner that is Ethical, Transparent and Accountable
PRINCIPLE 2. Businesses should provide goods and services in a manner that is sustainable
and safe
PRINCIPLE 3. Businesses should respect and promote the well-being of all employees,
including those in their value chains
PRINCIPLE 4. Businesses should respect the interests of and be responsive to all its
stakeholders
PRINCIPLE 5. Businesses should respect and promote human rights
PRINCIPLE 6. Businesses should respect and make efforts to protect and restore the
environment
PRINCIPLE 7. Businesses, when engaging in influencing public and regulatory policy,
should do so in a manner that is responsible and transparent
PRINCIPLE 8. Businesses should promote inclusive growth and equitable development
PRINCIPLE 9. Businesses should engage with and provide value to their consumers in a
responsible manner

The BRSR Core: A Subset for Assurance

In July 2023, following recommendations from the ESG Advisory Committee and public
consultations, SEBI implemented the BRSR Core. This subset consists of specific KPIs/metrics
under nine ESG attributes, including greenhouse gas footprint, water and energy usage,
waste management, employee wellbeing, gender diversity, inclusive development, fairness in
customer and supplier engagement, and business transparency. This detailed format enables
a standardized approach to reporting, providing investors and stakeholders with crucial
information on sustainability-related risks and opportunities.

These 9 ESG attributes include (i) Greenhouse gas (GHG) footprint, where corporates can
measure the Greenhouse gas emissions in accordance with the Greenhouse Gas Protocol: A
Corporate Accounting and Reporting Standard. (ii) Water footprint that talks about the total
water consumption, water consumption intensity, water discharge (iii) Energy footprint
includes total energy consumed, % of the energy consumed from renewable sources and

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energy intensity, (iv) Embracing circularity includes details related to waste management by
the entity- plastic waste, e-waste, bio-medical waste, construction and demolition waste,
battery waste, radio-active waste and other hazardous and non -hazardous waste, waste
intensity and recycled waste (v) Enhancing Employee Wellbeing and Safety requires
companies to report the spending on measures towards the wellbeing of employees and
workers – cost incurred as a % of the total revenue of the company, details of safety-related
incidents for employees and workers (including contract-workforce e.g. workers in the
company's construction sites), (vi) Enabling Gender Diversity in Business requires to report
gross wages paid to females as % of wages paid and number of complaints on POSH, (vii)
Enabling Inclusive Development parameters includes input material sourced from following
sources as % of total purchases – Directly sourced from MSMEs/ small producers and from
within India and Job creation in smaller towns – wages paid to persons employed in smaller
towns (permanent, temporary /on contract) as % of total wage cost, (viii) Fairness in
Engaging with Customers and Suppliers that includes instances involving loss / breach of
data of customers as a percentage of total data breaches or cyber security events and number
of days of accounts payable, (ix), Openness of business means concentration of purchases &
sales done with trading houses, dealers, and related parties Loans and advances & investments
with related parties. SEBI has a detailed format that clearly defines the data and assurance
approach companies have to take.

Firstly, from the above nine ESG attributes included in BRSR, it is clear that the framework is
guiding companies to standardize the reporting and thus it will provide investors and
stakeholders crucial information on sustainability related risks and opportunities. These nine
attributes also can align with all 17 Sustainable Development Goals (SDGs) as part of Agenda
2030.

Table1 : BRSR Core Attributes and SDGs alignment

Sr Attributes – BRSR Core Alignment with SDGs
No
1 Green-house gas (GHG) footprint

2 Water footprint

3 Energy footprint

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 4 Embracing circularity

5 Enhancing Employee Wellbeing and

Safety

6 Enabling Gender Diversity in

Business

7 Enabling Inclusive Development

8 Fairness in Engaging with

Customers and Suppliers

9 Openness of business

Comparative Perspective and Global Alignment

The challenge of choosing the appropriate sustainability reporting framework for ESG has
been a significant hurdle for companies in India. The introduction of the Business
Responsibility and Sustainability Reporting (BRSR) framework addresses this issue by offering
a standardized, clear, and transparent reporting format, mandatory for all applicable
companies. This alignment underscores the importance of transparency and accountability
in the operations of a company, ensuring that businesses not only pursue profitability but
also adhere to sustainable and responsible practices.

Challenges and Opportunities Ahead

The implementation of BRSR and BRSR core poses specific challenges, such as resource
allocation and lack of competency and knowledge about the attributes and measurement due
to the detailed demand for KPIs. However, the reporting will open the door for greater
transparency and accountability.

Conclusion

The BRSR framework marks a significant stride in India's commitment to sustainable and
responsible business practices. By aligning with global ESG standards and adapting them to
local needs, Indian businesses are poised to impact both the global stage and within their
communities substantially.