January 22, 2024
BRSR - The New Age Sustainability Reporting for India

Globally, the ESG landscape has been evolving over the years. The regulations have mandated sustainability reporting rather than voluntary action. The stakeholders involved in business (like consumers, investors, employees, and regulators) have started to demand transparency of actions. Investors no longer seek returns alone, but the risk factor is also taken into consideration. The ESG framework is an outline that helps any business in any domain tackle those risk factors. 

ESG reporting in India began in 2009 with the introduction of the National Voluntary Guidelines on Corporate Social Responsibility that was issued by MCA. Over the years, the framework has undergone various changes in order to better and mandate the reporting process. But India still needs to enhance and strengthen its ESG disclosures. With this aim, the Securities and Exchange Board of India (SEBI) announced the new Business Responsibility and Sustainability Reporting (BRSR) framework in May 2021 to replace the existing Business Responsibility Reporting (BRR) framework. 

BRSR is a hybrid ESG framework which has integrated the best practices from the UN Sustainable Development Goals, Global Reporting Initiatives, United Nations Guiding Principles and NGRBC Guidelines. BRSR is planned to be utilized as a single source of information on sustainability in India. It would also act as a foundational document for many stakeholders, particularly investors, to facilitate company comparability.' BRSR incorporates the environmental, social, and governance aspects along with sustainability components.  

BRSR Reporting is divided into three main sections

General disclosure

Under general disclosure, primarily internal information such as company name, CIN, registered office and manufacturing unit details, revenue, turnover, gender ratio of employees and workers, proportion of women in senior management, and employee turnover ratio must be published. 

Management & Process Disclosure

Under this section, the company needs to disclose the management's approach to the NGRBC principles. 

The nine principles of NGRBC include

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

Principle wise Performance Disclosure:

This section is subdivided into two categories:

Essential indicators

This includes mandatory reporting KPIs for companies, which include the training programs conducted, social impact made by the company, and environmental data on energy, waste, water and emissions.

Leadership indicators

This is a voluntary disclosure which reflects a company�s better accountability and purpose. The KPIs under this section include life cycle assessments (LCA), biodiversity, energy consumption, scope 3 based emissions, supply chain disclosures and conflict management policy of the company.

Through BRSR, investors can get standardized disclosures about a company's ESG performance. Using this information, they can compare companies' performances with other firms and make better decisions about sustainability risks and opportunities. According to the MCA report, BRSR will serve as a single comprehensive source of non-financial sustainability information relevant to all business stakeholders, investors, shareholders, regulators, and the public at large.

Features of Best ESG Software

Some features of good sustainability reporting software include the following:

Hassle-free data collection: Sustainability Reporting Software must be an aid in ease of data collection by integrating itself with the company's existing ERP, HRMS, CRM or MIS software to extract the necessary data for BRSR reporting automatically. 

Collaboration: The data required for sustainability reporting comes from various departments like electricity and water consumption from production, sludge disposal from water treatment, staff diversity from human resources, etc. Thus, collaboration is needed so that authorized people can enter the key performance indicators (KPIs) keeping the data privacy.

Third party validation: The data that is entered needs to be verified and audited by third party auditors who can authenticate the data and source before sharing it with the stakeholders.

Flexible in terms of business offering: Your company may be a product or a service company. Depending on that, the material topics differ. For example, a manufacturing plant will consider greenhouse gas emissions due to various sources and material wastage while an IT company will consider electricity usage and data privacy. 

Converting the raw data into representative graphs: The user or the ERP software will provide raw data in terms of numbers or yes/no. This needs to be converted into graphs and summary reports which can not only be used for informing the stakeholders but also to compare the year on year progress towards sustainability in terms of environmental, social and governance targets.

Our software solution, Prism, automates sustainability data collection, management, and analysis to create reports as per the BRSR reporting standard. Begin your journey towards ESG reporting with Oren!

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