BUSINESS SUSTAINABILITY &

RESPONSIBILITY REPORT

Presented by : CS Minal Bhosale

Contents

 Key Drivers of Sustainability Reporting

 BRSR Framework
 Materiality
 ESG Policies
 Principle-wise reporting expectations
 Recent changes to BRSR
 Important policies
 Approach
DRIVING FORCE BEHIND SUSTAINABILITY REPORTING
 Primary Investing objectives : Financial return & safety of capital

 ESG considerations have overtime become deeply rooted into investment thinking

 In 2005, UN Environment Programme Finance Initiative (UNEP FI) commissioned a

legal report which concluded that considering sustainability factors into an
investment analysis is legally permissible or required

 In 2006, UN Principles for Responsible Investment (PRI) was launched

 Investment managers are encouraging companies to improve their sustainability

disclosure and encourage high standards of ESG performance

 a number of governments are now mandating their financial sector participants to

disclose their ESG investing performance. Eg EU SFDR (2019)

 Consistent, reliable, and comparable sustainability data is a top priority for investors
and corporations.
DRIVING FORCE BEHIND SUSTAINABILITY REPORTING
In 2015, 196 countries adopted the Paris Agreement on climate
change, committing to limit global warming to well be 2 deg.
compared to pre-industrial levels. Emissions should be reduced as
soon as possible and reach net zero by 2050. To stay below 1.5 °C
of global warming, emissions need to be cut by roughly 43% by
2030.* Under this, countries and companies are establishing
carbon neutrality targets and reporting on progress

The Sustainable Development Goals (SDGs), also

known as the Global Goals, were adopted by all
United Nations Member States in 2015 as a
universal call to action to end poverty, protect
the planet and ensure that all people enjoy
peace and prosperity by 2030. Countries, NGOs,
companies and investors are pledging support to
help achieve the 17 SDGs and the 169 underlying
targets.

*UNEP; over 2019 baseline

MANDATORY SUSTAINABILITY REPORTING
 Once only a voluntary activity, there is a trend towards mandatory non-financial reporting.

 Eg EU (CSRD) , Australia, UK , US (California) South Africa, China have requirements in

place for large, publicly-listed or state-owned companies to disclose ESG practices

 Varying frameworks for addressing ESG have emerged in recent years as ESG is now
mainstream.

 UNGC, GRI, CDP, SASB, ISSB (TCFD) and are the most widely used today.

 Companies Boards need to be aware of the possible standards on ESG reportings so that
the most suited is adapted.

 Companies listed with overseas exchanges or who have raised funds from overseas
investors are particularly expected to report on well-known international standards, in
addition to any country specific standards.
INDIA’S JOURNEY OF SUSTAINABILITY REPORTING BRSR

 A Committee on Business Responsibility was constituted in 2018

 The Committee noted that SEBI-BRR framework had fostered a sense of mindfulness
towards business responsibility among companies.

 The reporting however needed standardised quantitative disclosures

 the National Guidelines on Responsible Business Conduct (NGRBC) were issued in 2019

 in March 2021, SEBI adopted and mandated the new BRSR reporting for top 1000 listed
companies.

 The same would be mandatory from FY 2022-23, but could be early adopted from FY 2021-
22.

 The revised reporting has significantly enhanced the disclosure norms from approx. 40
metrics to close to 100 metrics.
FRAMEWORK OF BRSR Guidance

 Inter-operability
 Reporting period : FY
 Comparative status
•Basic details •Policies 1.Ethics,  Definitions

PRINCIPLE-WISE DISCLOSURES
GENERAL DISCLOSUES

Stakeholderapproach
Materiality complaints and redressal mechanism Policies

MANAGEMENT APPROACH
•Reporting •Operating transparency &
Stakeholderapproach
Materiality complaints and redressal mechanism

Boundary procedures accountability  Format

Stakeholder complaints and redressal mechanism

•Employee details •Adherence to 2.Safe goods and

Stakeholder complaints and redressal mechanism

•HC/Subs/JV/ standards services  Essential vs

Associate •Goals with 3.Wellbeing of all Leadership
•Stakeholder timelines employees
complaints and •Performance data 4.Stakeholder indicators
redressal •Governance for responsibility
mechanism ESG 5.Promote human
•Materiality •Independent rights
approach evaluation 6.Protect & restore
environment
7.Responsible policy
engagement
8.Support inclusive
growth
9.Customer value
MATERIALITY
 Materiality assessment is the foundation of sustainability related
disclosures based on which companies’ can formulate their ESG
strategies.
 Materiality helps organization to identify the ‘sustainability’ factors that
impact them the most and it enables the company to develop
realistic goals for the future
 Materiality is assessed from :
• primary issues collected through internal programs such as
strategy & planning, regular customer/vendor surveys, risk
management, grievances, media/investor reports etc
• research based inputs such as relevant industry topics identified
under SASB, GRI and other standards, peer analysis and internal
stakeholder discussion
 The list of issues is then ranked from the perspective of materiality
through dedicated ‘Materiality Assessment surveys’ by a cross section
stakeholders including employees, customers, vendors, contract staff,
investors etc
 The current trend is to view a sustainability on a 2x2 matrix:
 if it presents a significant impact for stakeholders and
 Impacts the Company’s value creation dimensions such as vision,
growth, cash flows, profitability, regulatory liabilities, and access to
capital
ESG POLICIES
 ESG Reporting frameworks, including BRSR, require companies to outline policies in respect of
sustainable development
 GRI 2 provides insights on the expected coverage of such policy statements:
 These policies should cover expectations, values, principles, and norms of behavior set out for
protecting the environment, employee health and safety, combating bribery, and other forms
of corruption; adhering to good tax practices; and conducting due diligence to identify,
prevent, mitigate, and account for how the organization addresses its negative impacts on
the economy, environment, and people, including impacts on human rights
 Provide reference to authoritative intergovernmental instruments, where intended;
 stipulate conducting due diligence;
 stipulate the precautionary principle;
 stipulate respecting human rights
 One or more policies could be stipulated
1 : ETHICS, TRANSPARENCY, ACCOUNTABILITY
Businesses should conduct and govern themselves with integrity, and in a manner that is
Ethical, Transparent and Accountable.

 Policy framework  Metrics  Challenges

• Code of Conduct • Training on the BRR of BOD, KMP, employees, value • Training data of
• Whistle Blower Policy chain partners employees
• Penalties/settlements/compounding w.r.t. • Training for Board
BRR principles (materiality) members
• Bribery/corruption related actions against Directors, • Designing a training for
KMPs, employees (no materiality) supply chain
• Complaints on conflict of interest against Directors,KMPs
and corrective action
• Processes to manage conflict by Board

 A Code of Conduct outlines the behaviours that employees must adhere to and display w.r.t
 conflict free conduct; no gifts/courtesies
 non engagement of child labour/forced labour, fair labour practices
 combating bribery, and other forms of corruption
 occupational safety, emergency preparedness, managing injury & industrial hygiene
 non discrimination in matters of employment,
 equal opportunity to all including vendors,
 respect for confidentiality of IP, privacy data,
 safeguarding assets of company
 diligence in accounting
 2 : SAFE GOODS AND SERVICES
Businesses should provide goods and services in a manner that is sustainable and safe

 Policy framework  Metrics  Challenges

• Strategic framework for Input related : • Close working with
environment friendly • R&D/ capex to improve environmental/social impact of business and
products products and outcomes procurement teams to
• Supplier Code of • Procedure and % of sustainable sourcing collect data
Conduct • % of re-cycled or re-sued material to total material in • Physical measurement
• Supplier Diversity Policy value terms devices for waste
Output related : disposal data collection
• Process for collection for reuse, recycling and disposal of
entity’s products (plastics, e-waste, hazardous, others)
• Metric tons of waste recycled, re-used or safely disposed
(plastics, electronic, hazardous,others)
• % of reclaimed products and packaging to total
products sold
Life Cycle assessment:
• Life cycle assessments of products/services and results
communicated, risks identified and action taken

*Reproduced:Circularity Assessment: Macro to Nano: Accountability Towards Sustainability | SpringerLink

3 : EMPLOYEE WELL-BEING
Businesses should respect and promote the well-being of all employees, including those
in their value chains
 Policy framework  Metrics
Labour practices
 Challenges
• Health & Safety • Diversity of workforce:women,contract,PWD • Benefits disclosures to
Policy • Grievance handling mechanism for employees cover contract staff as
• Human Rights • No. of employees, workmen & contract staff covered by benefits well
Policy (insurance, maternity, paternity, day care) • Overseas jurisdictions
• Equal Opportunity • % of employees, workmen for whom retirals paid
may not have same
Policy • Steps for accessibility of premises for differently abled
• Union membership of employees / workers benefits
• Policy on • Challenges on training
• Grievance handling mechanism for employees
Workplace Human Capital development data
harassment • % of employees/workers trained on H&S, skill upgradation • Method for recording
• Policy on Sexual • % of employees/workers career development reviews and tracking complaints
harassment Talent Attraction data
• Other HR policies • Hiring and turnover rate for last 3 years
• Documentation of
• Return to work and retention rate from parental leave
• Transition assistance for career endings assessments done for
OHSAS H&S, including value
• Health and safety management system chain partners
• Safety related incidents (LTIFR)
• Rehabilitation of accident suffered employee/relative
• No of complaints on working conditions and H&S
• Assessments on H&S, working conditions & corrective action
4 : STAKEHOLDER ENGAGEMENT
Businesses should respect the interests of and be responsive to all its stakeholders

 Policy framework  Metrics  Challenges

• Stakeholder Engagement • Process for Identification of stakeholders • Need to conduct
Policy • List stakeholders, frequency & means of engagement comprehensive
• Supplier Diversity Policy • Key topics / concerns raised engagement surveys
• Discussion on Environment/Social topics with across stakeholder base
stakeholders • Start interventions for
• Whether the consultation informs identification and vulnerable groups eg
management of ESG topics vendor diversity
• Instances of engagement and actions taken for progams, CSR program
vulnerable stakeholders
5 : HUMAN RIGHTS
Businesses should respect and promote human rights

 Policy framework  Metrics

 Challenges
• Human rights Policy • No. of employees, workers who have been provided
human rights training • No of employees who
Compensation Parity have been trained may
• No of employees, workers to whom minimum wages or not match the count as
higher have been paid on year end
• Median male/female remuneration across categories • Median figures will be
Grievance Management impacted by service for
• Individual/committee for addressing human rights part of the year
issues • Investor may ask for steps
• Complaint redressal mechanism for human rights to bridge the pay gaps
• No. of complaints on human rights issues • Assessment of premises
• Mechanism to protect complainants from abuse may be a self –
Human Rights assessment assessment / external
• Contracts carrying human rights covenants expert
• % of plants assessed for human rights issues and
correction action taken
• Processes modified on account of human rights
complaints
• % of value chain partners (by value) assessed for
human rights issues and any corrective actions taken
6 : ENVIRONMENT
Businesses should respect and make efforts to protect and respect the environment
 Metrics
1. Disclosure of GHG emissions : Scope 1, 2, 3, intensity  Challenges
2. Disclosure of other air emissions • Boundary clarifications to
3. Details of projects related to GHG emissions, improving resource efficiency, be provided where
waste reduction operational control is
4. Energy and fuel consumption in giga joules and intensity per rupee of absent
turnover / other metric (eg HC/unit of product) • Inventorisation of all fuel
5. % of renewable energy sources sources
6. Whether PAT Scheme is applicable and targets achieved • Technical expertise
required to compute
7. Water usage, discharge (with/without treatment) - different sources, emissions data
intensity; operations in areas of water stress • The standards, methods
8. Mechanism implemented for Zero Liquid Discharge and coverage may be used for emission
explained computations should be
9. Waste generated by category, re-cycling/re-use & disposal disclosed
10. Waste management practices and efforts to reduce usage of hazardous • Procedures for
chemicals in products/processes measurement of waste,
water required
11. Environmental clearances obtained for operating near ecologically sensitive
zones, impact and remediation
12. Environmental Impact Assessments performed Independent assessment of
13. Compliance with environmental laws, penalties/actions environment data is
14. Business continuity plan recommended !
15. % of value chain partners assessed for environment impact
CORPORATE GHG PROTOCOL : EMISSIONS METHODOLOGY
Scope 1 : Emissions from
combustion in owned or
controlled boilers, furnaces,
vehicles, etc
Scope 2 accounts for
emissions from the
generation of purchased
electricity, heat,steam
consumed by the
company.
Scope 3 is an optional
reporting category that
allows for accounting
consequence of the
activities from sources not
owned or controlled by the
company, including
upstream and downstream

GHG
Calculation
6 : ENVIRONMENT : GHG EMISSIONS
• GHG emissions are a major contributor to climate change. Hence emissions need to be disclosed
for trending improvement over a period through interventions

• GHG gases comprise 7 gases : carbon dioxide, methane, nitrous oxide, HFC, PFC, sulphur
hexaflourise, nitrogen trifluoride ..(Kyoto gases),

• Accounting is based on GHG Protocol Corporate Accounting and Reporting Standard issued by
World Resources Institute

• Defines computation of emissions eg. emission from Diesel generator set would be computed by :
• Total diesel consumed (in litres) → Kg → Net calorific value → x Emission factor of component
gases (CO2, CH4, and N2O) ^ x Global warming potential (GWP) of component gases ^ = GHG

• CHG emission generated through 3 types of sources need to be aggregated

• Scope 1 – Comprises of emissions from combustion/cooling / processing activities undertaken
in the Company eg burning of fuel, car fleet emissions, fugitive emissions of
refrigerants, processing of chemicals and materials, such as cement, steel, aluminum
• Scope 2 – Comprises of indirect emissions resulting from electricity purchased by the Company
• Scope 3 - indirect emissions resulting from upstream or downstream activities such as emissions
done by supply chain, business travel, further processing of good sold, downstream
transportation, work from home

^ sourced from IPCC (Intergovernmental panel of Climate Change) database

 Science-based goals : SBTi Net – zero vs carbon neutral
 Unless clearly mentioned, emission goals may or may  Net – zero vs carbon neutral
not be science-based and/or validated  Net-zero relates to reaching net-zero by 2050
 SBTi Targets are clearly-defined, science-based under Paris Climate Agreement
pathways for companies to GHG emissions, which  Put simply, net zero means we are not adding
have been reviewed and validated by the SBTi. new emissions to the atmosphere.
 Companies can set medium term goals for 5- 10  As per SBTi Net Zero standards, companies
years, for direct emissions. must cut all possible - usually more than 90%
 SBTi’s Corporate Net-Zero Standard is the world’s only emissions . The final 10% can be off-set
framework for corporate net-zero target setting in line  Carbon neutrality standard PAS 2060 allows
with climate science and Paris Goals. off-setting through purchased credits that
 Companies must set near-term science-based are verified
targets to roughly halve emission before 2030.  So, clearly understand the concept of “SBTi Net –
 Companies must set long-term science-based Zero” which is now the Gold standard for
targets. Companies must cut all possible - usually emissions internationally
more than 90% - of emissions before 2050.
 After a company has achieved its long-term target
and cut emissions by more than 90%, it must use
permanent carbon removal and storage to
counterbalance the final 10% or more of residual
emissions that cannot be eliminated.

Globally approx. 6000 companies are SBTi committed and of them approx. 268 are Indian.  An example of Carbon Neutrality
7 : INFLUENCING PUBLIC POLICY
Businesses, when engaged in influencing public and regulatory policy, should do so in a
responsible and transparent manner

 Policy framework  Metrics  Challenges

• Public Engagement • No. of top 10 industry body affiliations/ memberships • Limited resources on
Policy • Corrective actions on anti-competitive conduct public policy
based on adverse orders engagement
• Public policy position advocated and method benchmarking
resorted therefor
8 : INCLUSIVE GROWTH
Businesses should promote inclusive growth and equitable development

 Policy framework  Metrics  Challenges

• CSR Policy Social impact of operations • Most questions apply to
• Details of Social Impact Assessments done based on companies involved in
applicable law and its results and mitigation actions infrastructure projects or
taken those undertaking
• Projects where ongoing rehabilitation work is being expansions etc
undertaken (data around project affected persons)
• Grievance redressal mechanism for local community
• Benefits shared through IP created from traditional
knowledge
• Corrective action for any adverse orders in respect of
IP related disputes involving traditional knowledge
CSR
• CSR amount spent of projects done in aspirational
districts
• % of beneficiaries of CSR projects from vulnerable
groups
Supply Chain
• % of inputs (in value) sourced from MSME
• % of procurement from vulnerable supplier groups
9 : CUSTOMER
Businesses should engage with and provide value to their customers in a responsible
manner

 Policy framework  Metrics  Challenges

• Customer Engagement • Grievance redressal mechanism • Customer complaint
Framework • % of products by turnover that carry information on data must be assiduously
• Data privacy policy safe usage, safe disposal, re-cycling, environmental maintained
and social parameters • Breaches vs complaints
• Steps taken towards consumer education on these
• Nos of customer complaints in respect of data privacy,
advertising, cyber-security, essential services, RTP,UTP
• Corrective actions in these areas
• Details of product recalls
• Policy on data privacy and cyber security
• Channels where information of products can be
obtained
• Mechanism to inform consumers of discontinuity of
essential services
• Details of product information over and above
regulatory requirements
• Details of customer surveys
• No of data breaches and % involving PII
CHANGES TO BRSR : 14 June 2023
 Updated BRSR format : From FY 2023 – 2024, the top 1000 listed entities (by market capitalization)
shall make disclosures as per the updated BRSR format, as part of their Annual Reports. Few new
KPIs have been identified: such as job creation in small towns, open-ness of business, gross wages
paid to women, water usage in water stressed districts, intensity by PPP.
 BRSR Core : BRSR Core is a sub-set of the BRSR, consisting of a set of Key Performance Indicators
(KPIs) / metrics under 9 ESG attributes .
 Detailed data calculation methods specified. Eg how to calculate emissions, water consumption
 Validation methods eg reliance of waste recycling certificates from vendors, outflow water meters

 Assurance : Listed entities shall mandatorily undertake reasonable assurance of the BRSR Core, as
per the glide path. For top 150 companies, applicable from FY 2023 – 2024 and reaching top 1000
by FY 2026-27.
 Supply-chain: Listed entities shall report the KPIs in the BRSR Core for their value chain to the extent it
is attributable to their business with that value chain partner. Such reporting may be segregated for
upstream and downstream partners or can be reported on an aggregate basis . ESG disclosures for
the value chain shall be applicable to the top 250 listed entities (by market capitalization), on a
comply-or-explain basis from FY 2024-25.
 The limited assurance of supply chain disclosures shall be applicable on a comply-or-explain basis
from FY 2025 - 26.
IMPORTANT POLICIES

 Supplier Code of Conduct Policy  Supplier Diversity Policy

Supplier codes of conduct are standards for members of • Policy contains a statement to incorporate diverse-owned
company supply chain which relate to: suppliers into a company’s supply chain
• Labour practices : non engagement of child labour/forced • Diverse-owned businesses are companies that are at least
labour, non-discrimination/non-harassment in their hiring 51% owned and operated by members of ethnic minority
and employment practices, freedom of association groups, women, veterans, members of the LGBTQ+
• Health and safety standards : guidelines on occupational community and people with disabilities.
safety, emergency preparedness, managing occupational • A statement that commitment to supplier diversity does
injury and illness not override application of criteria established as part of
• Environmental standards : call for suppliers to identify & the procurement process
minimize adverse effects on environment & public health
• Ethical conduct
IMPORTANT POLICIES

 Human Rights Policy  Equal Opportunity Policy

• An explicit commitment to respect all internationally • It provides equal employment opportunities without any
recognized human rights standards – at a minimum, the discrimination on the ground of age, colour, disability,
International Bill of Rights and the ILO’s Declaration on the marital status, nationality, geography, ethnicity, race,
Fundamental Principles and Rights at Work religion, sex
• Not engage in child labour/forced labour • Guidelines around workplace behaviour
• Stipulations concerning the company’s expectations of • Outlines disciplinary procedures
personnel, business partners and other relevant parties • Should adhere to The Rights of Persons with Disabilities
• Commitment to extend principles to supply chain Act, 2016:
• Information on how the company will implement its • a) that the work environment is free from any
commitment discrimination against PWDs;
• b) that facilities and amenities are provided to the PWDs
 Wokplace Harassment Policy to enable them to effectively discharge their duties
• c) that preference is given to PWDs at the time of
• The policy aims to address and prevent antagonistic situations transfer, posting, promotion subject to administrative
that violate the dignity of employees - insults, threats, bullying, constraints and job specifications
victimization, offensive discussions and gestures, gossip
• Reporting of harassment incidents
• Investigation procedure
• Disciplinary actions for participating in harassing behavior.
IMPORTANT POLICIES

 Stakeholder Engagement Policy  Responsible Public Engagement

• defines and identifies stakeholders. • Enables creating awareness of the issues facing the industry
• Statement of approach towards engagement : in a fair and equitable manner
transparent, inclusive and culturally sensitive • Contains averments that in dealing with regulators, the
• Outlining modes of communication Company’s Code of Conduct and applicable laws will be
• Endeavour to keep engagement participatory. followed
• Commitment to ensure that grievances shall be addressed • Endeavour to engage through collective platforms such as
in a fair & judicious manner. industry associations
• Commitment towards a monitoring process for • Participation in consultative opportunities
engagement scores • Due respect to confidentiality in interaction
• Manner of dealing with feedback gathered in the course
of the engagement
APPROACH

• Assess material ESG issues - As a starting point, the Board may request the Management to
undertake an assessment of the material ESG issues. A review of strategy, planning, risk registers,
audit reports could be a good starting point. An external assessment through an expert can also
be explored.
• Roadmap - A well-thought road-map for improvement over key metrics should be formulated. This
could form a part of the balanced score card of the organisation. How management is
addressing and periodically assessing key ESG priorities as a part of its strategy should be tracked.
• Assess the expectation or needs of stakeholders –Formal surveys or continuous dialogues with
stakeholders can enable the Company to assess stakeholder ESG priorities.
• Training & awareness – Install a robust and sustained program for training and education of
employees as well as its value chain partners on various principles.
• Proactive disclosures and goal setting - Management must communicate widely its ESG priorities
and performance with investors, bankers and other key stakeholders.
• Outline ESG roles and responsibilities - Many large manufacturing organizations have appointed
a chief sustainability officer, while others have given the CEO or other C-suite executives explicit
ESG responsibilities. From a board perspective, ESG is most often overseen at the full board level or
by the board’s strategy or risk committee.
Thank you!