Centre for Science and Environment

Report Part Title: Introduction

Report Title: STRENGTHENING ENVIRONMENTAL REPORTING UNDER BRSR

Report Subtitle: Business Responsibility and Sustainability Reporting (BRSR): A CSE
Guidance Brief
Report Author(s): Nivit Kumar Yadav and Shobhit Srivastava
Report Editor(s): Souparno Banerjee
Published by: Centre for Science and Environment (2024)
Stable URL: https://www.jstor.org/stable/resrep60348.3

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
https://about.jstor.org/terms

Centre for Science and Environment is collaborating with JSTOR to digitize, preserve and
extend access to this content.

This content downloaded from 181.37.21.203 on Wed, 14 Aug 2024 13:22:42 UTC
All use subject to https://about.jstor.org/terms
STRENGTHENING ENVIRONMENTAL REPORTING UNDER BRSR

1. Introduction

How can a business be judged and assessed as “behaving responsibly” towards

environment? Globally, in the last few decades, there has been a movement towards
greater transparency in sharing non-financial data. Businesses, organisations and
companies have been opening up about what actions they are taking to manage
their environmental, social and governance (ESG) risks. In response, stock
exchanges and financial regulatory bodies have mandated ESG-related reporting,
commonly known as ‘ESG disclosure’.

The scenario is unfolding in India as well. The need for responsible business in the
country has been the driver in strengthening sustainable business practices and
disclosures. In 2008, the S&P ESG India Index was launched by CRISIL. In 2009
came the National Voluntary Guidelines (NVGs), issued by the Union Ministry of
Corporate Affairs (MCA). The aim was to offer businesses an ‘Indian’ approach to
inculcate responsible business conduct.

In 2012, the Securities and Exchange Board of India (SEBI) mandated the top
100 listed entities by market capitalisation to file Business Responsibility Reports
(BRR) as part of their annual reports, as per the disclosure requirement emanating
from NVGs. The requirement for filing BRRs was progressively extended to the
top 500 listed entities in 2017. In 2019, the ministry (MCA) released the National
Guidelines on Responsible Business Conduct (NGRBC).

In 2021, the term ‘BRR’ was replaced and renamed by SEBI as Business
Responsibility and Sustainability Reporting (BRSR), and new guidelines for non-
financial disclosure were introduced. The circular notified that the top 1,000
companies will be required to disclose their non-financial data voluntarily from
fiscal year 2021-2022, while mandatorily disclosing from fiscal year 2022-2023
onwards as per the format. The listing of the companies is based on their worth on
the stock market. This was done to put in place a reporting structure for Indian
companies that would match international ESG disclosure frameworks and
standards.

THE BRSR FRAMEWORK

There are three separate sections in the BRSR framework: Section A is for general
disclosures, Section B for management and process disclosures, and Section C for
principle-wise performance disclosures.

6
This content downloaded from 181.37.21.203 on Wed, 14 Aug 2024 13:22:42 UTC
All use subject to https://about.jstor.org/terms
 BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING (BRSR): A CSE GUIDANCE BRIEF

Section A seeks information on the fundamental facts and specifics about the
listed firm, while Section B mandates businesses to publish disclosures pertaining
to their structure, policies and processes in place to adopt the National Guidelines
on Responsible Business Conduct (NGRBC). Section C collects information under
the nine basic principles of the NGRBC (see Figure 1). These nine principles range
from encouraging businesses to be ethical and accountable, to enabling facilitation
of equitable development and consumer welfare (see next section for more on the
BRSR principles).

The BRSR framework collects information from businesses on each of these

principles. The principles govern how a business should conduct itself and work
with respect to environmental and social matters.

To keep up with emerging trends in ESG reporting, the collected information is

divided into two sections:
• Essential indicators (mandatory)
• Leadership indicators (voluntary)

Companies must report on specific topics under the ‘essential indicators’. The
‘leadership indicators’, on the other hand, are additional disclosures and are
voluntary in nature – although for increased accountability and transparency, it is
important that the company reports on leadership indicators as well.

Figure 1: The BRSR framework sections

SECTION A SECTION B SECTION C

General Management and Principle-wise
Disclosures Process Disclosures Performance Disclosures
• Details of the listed entity NGRBC principles and core Essential Indicators (mandatory):
• Details on products/services elements used in developing: • Environmental data on energy,
• Operations • structures emissions, waste, water etc.
• Employees • policies and processes • Data on awareness programmes
• Participation/inclusion/ conducted
representation of women
• Turnover rate for Leadership Indicators (voluntary):
permanent employees and • Data on life cycle assessments
workers (LCAs), conflict management
• Holding, subsidiary and policy, break-up of energy policy
associate companies etc
• CSR details
• Transparency and disclosure
compliances

7
This content downloaded from 181.37.21.203 on Wed, 14 Aug 2024 13:22:42 UTC
All use subject to https://about.jstor.org/terms
STRENGTHENING ENVIRONMENTAL REPORTING UNDER BRSR

These metrics give a more comprehensive picture of companies’ sustainability

efforts and cover details of things such as a company’s efforts to innovate and
adopt sustainable and responsible practices; the company’s engagement with
stakeholders, including customers, suppliers and communities; and the company’s
efforts to promote inclusive growth and equitable development.

GOVERNING PRINCIPLES OF BRSR

The governing principles of BRSR include the nine principles defined by the
NGRBC. The principles have been based on different themes (see Figure 2):
• Principle 1: Ethical Business Practices
• Principle 2: Product Stewardship (provisioning goods and services in a
sustainable manner)
• Principle 3: Employee Well-being and Engagement
• Principle 4: Stakeholder Engagement
• Principle 5: Human Rights
• Principle 6: Environmental Stewardship
• Principle 7: Public Policy Advocacy (complying with regulatory frameworks)
• Principle 8: Inclusive and Equitable Growth
• Principle 9: Customer Focus

Figure 2: BRSR’s governing principles

PRINCIPLE 1 PRINCIPLE 2 PRINCIPLE 3

Businesses should provide
Businesses should conduct Businesses should respect and
goods and services in a
and govern with integrity and promote the well-being of all
manner that is sustainable
in a manner that is ethical, employees, including those in
and safe.
transparent and accountable. their value chains.

PRINCIPLE 4 PRINCIPLE 5 PRINCIPLE 6

Businesses should respect the Businesses should respect
Businesses should respect
interests of and be responsive and make efforts to protect
and promote human rights.
to all their stakeholders. and restore the environment.

PRINCIPLE 7 PRINCIPLE 9
PRINCIPLE 8
Businesses, when engaging
Businesses should engage
in influencing public and Businesses should promote
with and provide value
regulatory policy, should do so inclusive growth and equitable
to their consumers in a
in a manner that is responsible development.
responsible manner.
and transparent.

8
This content downloaded from 181.37.21.203 on Wed, 14 Aug 2024 13:22:42 UTC
All use subject to https://about.jstor.org/terms
 BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING (BRSR): A CSE GUIDANCE BRIEF

OBJECTIVES OF THE BRSR FRAMEWORK

The primary objectives behind introducing BRSR into financial markets has been
to promote responsible and sustainable business practices, foster transparency
and accountability, engage stakeholders, drive performance improvement, and
contribute to a more sustainable and equitable future. It is also to understand if
companies are inculcating sustainability in their operations, and to equip financial
investors with the required knowledge to invest in ESG-responsible businesses.

The framework consists of disclosures related to sustainable sourcing, energy

efficiency of the plants, total water usage, air emissions, fuel consumption, use of
renewable energy sources, liquid discharge disclosures, greenhouse gas emissions,
waste generation and its management, and environmental impact assessment.

Several Key Performance Indicators (KPIs) from international frameworks

have been incorporated into India’s BRSR to bring it up to par with emerging
trends in global ESG reporting, including those pertaining to the UN Sustainable
Development Goals (SDGs).

By integrating SDGs into their BRSR, organisations can showcase their commitment
to sustainable development, demonstrate how they contribute to global priorities,
and provide transparency to stakeholders about their sustainability performance.

THE 2023 BRSR UPDATION: WHAT DOES IT ENTAIL

In July 2023, the BRSR format – including the BRSR Core Framework – was
further updated by SEBI for assurance and ESG disclosures for the value chain.
The main updates include:
• In the old format, the question on energy sourcing from renewables and non-
renewables was under leadership indicators. An important update was done
to include energy sourcing from both renewable and non-renewable sources
under essential indicators – this means all companies have to mandatorily
provide this information now in their BRSR reporting. This is a positive
update.
• In another positive update, the question on water discharge by destination and
level of treatment has also been moved to the essential indicators list.
• Reasonable assurance of BRSR Core will now have to be done by an assurance
provider. Accordingly, companies have been asked to give the name of the
assurance provider as a whole as well as for each indicator. Through this
updation, SEBI intends to get an independent assessment of a company’s
BRSR disclosure by a qualified third-party assurance provider. This will

9
This content downloaded from 181.37.21.203 on Wed, 14 Aug 2024 13:22:42 UTC
All use subject to https://about.jstor.org/terms
STRENGTHENING ENVIRONMENTAL REPORTING UNDER BRSR

provide stakeholders with confidence in the credibility and transparency of a

company’s BRSR performance.
• The listed entities shall mandatorily undertake reasonable assurance of the
BRSR Core as per the timelines given by SEBI.

It is mandated that from FY 2023–2024, the top 1,000 listed entities (by market
capitalisation) shall make disclosures as per the updated BRSR format, as part of
their annual reports.

RATIONALE BEHIND THIS REPORT AND GUIDANCE

DOCUMENT
The purpose of this document from Centre for Science and Environment (CSE)
is to review the information under BRSR provided by companies during the
years 2020-21, 2021-22 and 2022-23. It is also to analyse how the format can be
strengthened to get quality data in the public domain, which can then be used by
policymakers and investors for more informed decision-making.

The report is largely focused on data provided by companies pertaining to Principle

6 – Environmental Stewardship. The BRSR framework is the first attempt by any
regulatory authority or agency in India to mandate the sharing of such detailed
environmental performance and compliance data in the public domain – sharing
of such data in a transparent manner should be one of the key drivers in decision-
making by investors.

CSE experts have reviewed 28 reports from 14 different companies, and prepared
an overall assessment. The aim has been to come up with recommendations to
strengthen BRSR so that it can lead to rational reporting and investment decisions.

WHAT CSE HAS LOOKED FOR: ENVIRONMENTAL

STEWARDSHIP
As CSE has reviewed the data provided by companies only under Principle 6, a
thorough understanding – therefore – is required on the kind of information asked/
provided in BRSR reports in order to analyse the pros and cons of the reporting
format and to assess the data/information provided.

There are 21 questions under Environmental Stewardship, out of which 12 are

under essential and nine under leadership indicators.

10
This content downloaded from 181.37.21.203 on Wed, 14 Aug 2024 13:22:42 UTC
All use subject to https://about.jstor.org/terms
 BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING (BRSR): A CSE GUIDANCE BRIEF

Essential Indicators
• Question 1: Details of total energy consumption and energy intensity
• Question 2: Status of the industries/sites under the company, identified as
Designated Consumer (DC) under the Perform Achieve and Trade (PAT)
scheme of the Bureau of Energy Efficiency (BEE) and the details regarding
the targets set and achieved under the scheme
• Question 3: Water-related disclosures – water withdrawal from different
sources, total water consumption and water intensity
• Question 4: Zero liquid discharge implementation and its details, if
implemented
• Question 5: Details of air emissions (other than GHG) – information needed
for SOX, NOX, particulate matter, VOCs etc
• Question 6: Details of GHG emissions (Scope 1 and 2)
• Question 7: Any projects related to GHG emissions reduction. Details, if yes
• Question 8: Details related to waste management
• Question 9: Waste management practices adopted and strategies to reduce
the use of hazardous and toxic chemicals in products and processes
• Question 10: Details of any operations in and around ecologically sensitive
areas where environmental clearances are required
• Question 11: Details of Environmental Impact Assessment (EIA) of projects
undertaken by the company in the current financial year
• Question 12: Details of non-compliances if any with the applicable
environmental laws, regulations and guidelines in India

Leadership Indicators
• Question 1: Total energy consumed from renewable and non-renewable
sources. (shifted as Question 1 under essential indicators in new BRSR format)
• Question 2: Water discharged by destination and level of treatment
• Question 3: Water withdrawal, consumption and discharge in areas of water
stress (facility or plant-wise)
• Question 4: Details of scope 3 GHG emissions and its intensity
• Question 5: Impacts on biodiversity in ecologically sensitive areas (as asked in
Q 10 of essential indicator) and prevention and remediation activities
• Question 6: Initiatives, technologies or solutions to improve resource efficiency
or reduce impact due to emissions, effluent, or waste generated
• Question 7: Business continuity and disaster management plan of the company
• Question 8: Disclose any significant adverse impacts to the environment,
arising from the value chain of the entity
• Question 9: Percentage of value chain partners (by value of business done
with them) that were assessed for environmental impacts

11
This content downloaded from 181.37.21.203 on Wed, 14 Aug 2024 13:22:42 UTC
All use subject to https://about.jstor.org/terms