Categories: SEBI

All About Business Responsibility & Sustainability Reporting

Overview on Business Responsibility & Sustainability Reporting

BRSR framework is a required disclosure mechanism that allows them to show their dedication to responsible business practices by reporting on their performance on Environmental, social, & governance (ESG) elements for the top 1000 listed companies or businesses. The Business Responsibility and Sustainability (BRS) report offers several key advantages to organizations:

  • Enhanced Reputation: Publishing a BRS report showcases a company’s dedication to ethical practices, sustainability, and social responsibility, building trust and credibility among stakeholders such as customers, investors, employees, and the public. This leads to an enhanced reputation.
  • Stakeholder Engagement: The BRS report provides a transparent platform for communication with stakeholders, allowing organizations to share their sustainability initiatives, environmental impacts, social contributions, and future goals. This fosters meaningful relationships and encourages active stakeholder involvement.
  • Competitive Advantage: A comprehensive BRS report sets an organization apart from its competitors by highlighting its sustainability performance, innovation, and forward-thinking approach. It positions the company as a market leader, attracting customers and investors who prioritize ethical and sustainable practices.
  • Risk Management: By identifying and managing potential risks associated with environmental, social, and governance (ESG) factors, the BRS report helps organizations take proactive measures to mitigate these risks, minimizing potential legal, reputational, or operational issues.
  • Cost Savings and Efficiency: Sustainability initiatives often lead to cost savings and increased operational efficiency. The BRS report allows companies to highlight efforts in reducing waste, improving energy efficiency, optimizing supply chains, and adopting sustainable practices, resulting in reduced resource consumption and associated costs.
  • Regulatory Compliance: Creating a BRS report helps organizations comply with regulations and reporting requirements related to corporate sustainability and social responsibility, ensuring they operate within legal boundaries and stay updated on evolving standards.
  • Investor Attraction and Access to Capital: With investors increasingly considering ESG factors, a comprehensive BRS report showcases a company’s sustainable practices and long-term viability. This attracts socially responsible investors and opens doors to sustainable investment funds and capital providers.
  • Employee Engagement and Retention: The BRS report serves to engage employees by aligning them with the organization’s sustainability goals. Highlighting the company’s commitment to ethical and responsible practices fosters a sense of pride and purpose, leading to improved employee satisfaction, retention, and productivity.
  • Innovation and Future-Proofing: Emphasizing sustainability in the BRS report encourages organizations to seek innovative solutions and technologies that reduce environmental impact and improve social outcomes. This drives adaptation to changing market trends, customer demands, and regulatory requirements, ensuring long-term viability and resilience.
  • Positive Societal Impact: Ultimately, the BRS report contributes to positive societal impact by promoting sustainable practices, responsible business conduct, and engagement with local communities. It helps organizations address social and environmental challenges, aligning business objectives with broader sustainable development goals.

Overall, the BRS report offers numerous benefits, including improved reputation, stakeholder engagement, risk management, cost savings, and access to capital, helping organizations become more sustainable, resilient, and successful in the long run.

Applicability of BRS Reports in India

  • In India, the requirement to publish Business Responsibility and Sustainability (BRS) reports applies specifically to the top 1000 listed entities based on market capitalization. This mandate ensures that major players in the market adhere to and disclose their sustainability and social responsibility practices, thereby promoting transparency and accountability.
  • The objective of SEBI’s BRSR framework is to improve responsibility and transparency among listed businesses. With the firms Act of 2013, India led the way in requiring companies to engage in corporate social responsibility (CSR) by allocating at least 2% of their profits to such initiatives.
  • The requirements for the Business Responsibility and Sustainability Report (BRSR) submission for companies based on their market capitalization and listing status:
    1. Mandatory for FY2022-23:  Applicable to the top 1,000 listed companies by market capitalization.
    2. Voluntary for FY2021-22: Applicable to the top 1,000 listed companies by market capitalization.
    3. Voluntary for other companies from FY2021-22 onwards:
      • Applies to listed companies that are not among the top 1,000 by market capitalization.
      • Also applicable to companies that have listed their specified securities on the Small and Medium Enterprises (SME) exchange.

Principles of Business Responsibility and Sustainability Report

The Business Responsibility and Sustainability Report (BRSR) framework, designed by the Securities and Exchange Board of India (SEBI), aims to encourage companies to adopt sustainable and responsible business practices. It is grounded in nine fundamental principles derived from the National Guidelines on Responsible Business Conduct (NGRBC). These principles outline the expectations for companies to operate ethically, transparently, and sustainably, while promoting the well-being of stakeholders and the environment.

  1. Ethical Business Practices

Ensure that companies operate with integrity and ethical standards. Upholding fair business practices, maintaining honesty in all dealings, and fostering a culture of ethical conduct throughout the organization.

  1. Transparency and Accountability

Promote openness and responsible behavior within organizations. Regular disclosure of business activities, decision-making processes, and performance outcomes to stakeholders. Holding entities accountable for their actions and ensuring mechanisms for redressal of grievances.

  1. Sustainable Goods and Services

Provide products and services that contribute to sustainability. Designing and delivering goods and services that minimize negative environmental and social impacts throughout their lifecycle. Encouraging innovation for sustainable solutions.

  1. Employee Well-being

Ensure the health, safety, and well-being of employees. Providing fair wages, safe working conditions, opportunities for professional development, and respecting workers’ rights. Extending these practices to employees within the value chain. Environmental Protection and Sustainable Production Minimize environmental impact and promote sustainable practices. Adopting practices that reduce pollution, conserve resources, and enhance environmental sustainability. Implementing energy-efficient processes, waste management, and sustainable sourcing.

  1. Stakeholder Responsiveness

Engage effectively with all stakeholders. Identifying and understanding the needs and concerns of stakeholders, including customers, employees, suppliers, and communities. Fostering inclusive dialogue and responding to stakeholder feedback.

  1. Human Rights Promotion

Uphold and promote human rights. Ensuring that business operations do not infringe on human rights. Promoting practices that support human dignity, equality, and freedom. Addressing any adverse impacts on human rights linked to business activities.

  1. Regulatory Compliance

Ensure compliance with laws and regulations. Adhering to all relevant legal requirements and regulatory standards. Staying informed about changes in legislation and implementing necessary adjustments to maintain compliance.

  1. Inclusive Growth and Consumer Welfare

Facilitate equitable development and ensure consumer welfare. Contributing to the socio-economic development of communities. Ensuring that products and services are safe, accessible, and beneficial to consumers. Supporting initiatives that promote inclusive growth and reduce inequalities.

The BRSR framework, grounded in these nine principles, guides companies towards integrating sustainability and responsibility into their core operations. By adhering to these principles, businesses can contribute to the well-being of society, protect the environment, and ensure long-term success and resilience.

SEBI’s Regulatory Framework for ESG

On March 30, 2023, the Securities and Exchange Board of India (SEBI) approved a balanced framework for ESG disclosures, ratings, and investing. This regulatory framework aims to standardize and enhance the quality of ESG disclosures, ensuring that investors and other stakeholders have access to reliable and comparable information.

Key Components of SEBI’s Framework:

  • ESG Disclosures:
    • Enhanced Reporting Requirements: The framework mandates detailed and standardized ESG disclosures for listed entities. This includes information on environmental impact, social contributions, and governance practices.
    • Alignment with Global Standards: The framework aligns with international best practices, facilitating comparability with global peers.
  • ESG Ratings:
    • Transparent Methodologies: SEBI’s framework requires ESG rating providers to disclose their methodologies, ensuring transparency and reliability in ESG ratings.
    • Regulation of Rating Providers: SEBI regulates ESG rating agencies to ensure consistency and credibility in their assessments.
  • ESG Investing:
    • Integration into Investment Processes: The framework encourages the integration of ESG factors into investment decision-making processes, promoting responsible investing.
    • Amendments to Regulations: SEBI has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and SEBI (Mutual Funds) Regulations, 1996, to facilitate ESG-focused investments and disclosures.

Implications for Listed Entities and Investors:

  • For Listed Entities:
    • Compliance: The top 1000 listed companies must comply with the enhanced ESG disclosure requirements, which necessitates a thorough understanding and integration of ESG factors into their business operations.
    • Transparency and Accountability: Companies are expected to adopt transparent practices and disclose their ESG initiatives and performance comprehensively.
    • Stakeholder Trust: Enhanced disclosures build trust among stakeholders, including investors, customers, and regulators, leading to potential reputational and financial benefits.
  • For Investors:
    • Informed Decision-Making: Access to standardized and reliable ESG information enables investors to make informed decisions, aligning their investments with their values and risk preferences.
    • Responsible Investing: The framework supports the growing trend of responsible investing, where investors consider ESG factors as part of their investment strategies.
  • The mandate for BRS reports and SEBI’s regulatory framework for ESG disclosures, ratings, and investing mark significant steps towards sustainable and responsible business practices in India. These measures not only enhance transparency and accountability but also align Indian companies with global sustainability standards, fostering a more resilient and ethical market environment.

Key Decisions by SEBI on ESG Disclosures, Ratings, and Investing

ESG Disclosures

Introduction of BRSR Core

BRSR Core Implementation:

    • Objective: Enhance the reliability of ESG disclosures.
    • Components: BRSR Core will include a limited set of Key Performance Indicators (KPIs) for which listed entities must obtain reasonable assurance.
    • Applicability Timeline:
      • FY 2023-24: Top 150 listed entities by market capitalization.
      • FY 2026-27: Gradual extension to the top 1000 listed entities.

ESG Disclosures for Value Chain:

Objective: Increase transparency in the ESG impacts of a company’s value chain.


    • ESG disclosures and reasonable assurance (BRSR Core only) for significant value chain ESG footprints.
    • Specific thresholds for these disclosures will be specified.

Applicability Timeline:

  • FY 2024-25 and FY 2025-26: Apply to the top 250 listed entities by market capitalization on a comply-or-explain basis.
  • ESG Ratings
    • i. Consideration of Emerging Market Parameters:
      • Objective: Reflect unique environmental and social challenges of Emerging Markets in ESG ratings.
      • Requirements: ESG Rating Providers (ERPs) must incorporate India/Emerging Market parameters in their ESG ratings, while still being able to issue additional ratings as needed by clients.
    • ii. Introduction of Core ESG Rating:
      • Objective: Ensure credibility of ESG ratings.
      • Components: Core ESG Rating will be based on parameters that have been assured under BRSR Core.

Consequences of Unsustainability or Non-Compliance with Sustainability Practices

Failing to adhere to sustainability practices can have significant and wide-ranging consequences for both the environment and society. Here are some potential impacts:

Environmental Consequences

  1. Environmental Degradation:

Deforestation and Habitat Destruction: Unsustainable practices often result in the clearing of forests and destruction of natural habitats, which threatens wildlife and reduces biodiversity.

Pollution: Ignoring sustainability can lead to the contamination of air, water, and soil. Industrial emissions, improper waste disposal, and chemical runoff from agriculture can significantly harm ecosystems and human health.

Resource Depletion: Overexploitation of natural resources like water, minerals, and fossil fuels can lead to their depletion, making them unavailable for future generations.

  1. Climate Change:

Global Warming: Failing to reduce greenhouse gas emissions contributes to global warming, causing higher average temperatures worldwide.

Extreme Weather Events: Climate change increases the frequency and severity of extreme weather events such as hurricanes, droughts, and floods. These events can cause widespread damage to infrastructure, agriculture, and settlements.

Sea-Level Rise: Melting polar ice and expanding seawater due to higher temperatures lead to sea-level rise, which can inundate coastal areas, leading to loss of habitat and displacement of human populations.

Ecosystem Disruption: Changes in temperature and precipitation patterns disrupt ecosystems, affecting species migration, breeding cycles, and food availability.

Social and Economic Consequences

  1. Health Impacts:

Air and Water Pollution: Exposure to pollutants can cause respiratory diseases, cardiovascular conditions, and other health problems. Contaminated water sources can lead to waterborne diseases.

Food Security: Climate change and environmental degradation can reduce agricultural productivity, leading to food shortages and higher prices, disproportionately affecting vulnerable populations.

  1. Economic Losses:

Damage to Infrastructure: Extreme weather events can cause significant damage to infrastructure such as roads, bridges, and buildings, leading to costly repairs and economic losses.

Loss of Livelihoods: Environmental degradation can disrupt industries that rely on natural resources, such as agriculture, fishing, and tourism, leading to job losses and economic instability.

  1. Social Displacement:

Migration and Displacement: Rising sea levels, extreme weather events, and resource scarcity can force people to migrate, leading to displacement and increased strain on urban areas and social services.

  1. Regulatory and Legal Consequences:

Non-Compliance Penalties: Companies that fail to comply with environmental regulations can face fines, legal action, and sanctions. This can damage their financial standing and reputation.

Loss of Market Access: Increasingly, markets and consumers favor sustainable practices. Non-compliant companies may lose access to markets or face boycotts from environmentally conscious consumers.

Long-Term Consequences

  1. Loss of Biodiversity:

Species Extinction: Unsustainable practices can lead to the extinction of species, reducing biodiversity and weakening ecosystems’ resilience to environmental changes.

Ecosystem Services: The loss of biodiversity affects the ecosystem services that humans rely on, such as pollination of crops, water purification, and climate regulation.

  1. Intergenerational Equity:

Future Generations: Unsustainable practices jeopardize the ability of future generations to meet their own needs. Resource depletion and environmental damage create long-term challenges for economic development and human well-being.

Summary of SEBI’s Framework

  • BRSR Core: A standardized set of KPIs for reliable ESG disclosures, gradually extending from the top 150 to the top 1000 listed entities by FY 2026-27.
  • Value Chain Disclosures: Enhanced transparency in ESG impacts of the value chain for the top 250 entities, with a phased comply-or-explain approach starting FY 2024-25.
  • ESG Ratings: Incorporation of Emerging Market parameters and introduction of a Core ESG Rating based on assured BRSR Core parameters to ensure rating credibility.


  • For Listed Entities:
    • Compliance and Assurance: Listed entities need to prepare for phased compliance with the BRSR Core and value chain disclosures, obtaining reasonable assurance for specified KPIs.
    • Enhanced Reporting: More rigorous and transparent reporting on ESG factors will be required, reflecting both direct operations and value chain impacts.

For ESG Rating Providers:

  • Adapting Methodologies: ERPs will need to adapt their rating methodologies to include Emerging Market-specific parameters.
  • New Rating Categories: Introduction of Core ESG Ratings based on assured KPIs will enhance the credibility and specificity of ESG ratings.

For Investors:

  • Improved Data Quality: Investors will benefit from more reliable and assured ESG data, improving the basis for investment decisions.
  • Greater Transparency: Enhanced disclosures on value chain impacts provide a more comprehensive view of a company’s ESG performance.
  • SEBI’s balanced framework for ESG disclosures, ratings, and investing marks a significant step towards integrating sustainability into the corporate and investment landscape in India, promoting greater transparency, accountability, and informed decision-making.

Improve Business Responsibility and Sustainability Report (BRSR) compliance

For senior managers looking to improve Business Responsibility and Sustainability Report (BRSR) compliance, here are some actionable tips:

  1. Start Early:

    • Begin the BRSR implementation process well in advance. Establishing a comprehensive BRSR policy and action plan requires time, as does gathering and disclosing information on Environmental, Social, and Governance (ESG) topics.
  2. Get Buy-In from Top Management:

    • Ensure that top management understands and supports BRSR. Highlight the importance and benefits of BRSR to the company, such as enhanced reputation, compliance with regulations, and potential financial advantages.
  3. Involve Stakeholders:

    • Engage with various stakeholders (employees, customers, investors, and community members) throughout the BRSR process. This ensures the ESG topics reported are relevant and that the company’s reporting is transparent and accountable.
  4. Use a BRSR Software Solution:

    • Consider utilizing specialized BRSR software to automate the reporting process. These tools can streamline data collection, enhance accuracy, and ensure comprehensive reporting, ultimately saving time and resources.
    • If needed, consult with qualified professionals or consultants who specialize in BRSR. They can provide valuable insights and guidance to ensure thorough and effective implementation and compliance.

By following these tips, companies can improve their BRSR compliance and reporting, ultimately enhancing their sustainability practices and stakeholder trust.


The consequences of unsustainability are profound and far-reaching, affecting the environment, human health, economies, and societies globally. By not adhering to sustainability practices, organizations and individuals contribute to environmental degradation, exacerbate climate change, and create significant social and economic challenges. Therefore, it is crucial to integrate sustainability into all aspects of business and personal practices to ensure a healthier, more equitable, and resilient future for all.

it is crucial that businesses begin working on performance management and measurement in accordance with BRSR as soon as possible rather than waiting to be burdened with compliance requirements through regulatory provisions.  Companies can use BRSR as a useful tool to control risks, lower expenses, strengthen their brand’s image, and draw in investors in addition to improving their ESG performance.

Tags: BRSR
Rajput Jain & Associates

Rajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders. Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields. We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.

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