MAKING SUSTAINABILITY ACCOUNTABLE

In a decisive move that signals India’s commitment to environmental, social, and governance (ESG) values, the Securities and Exchange Board of India (SEBI) mandated the Business Responsibility and Sustainability Reporting (BRSR) framework for the top 1,000 listed companies starting FY23.

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This structured regulatory shift has placed India at the forefront of ESG disclosure among emerging markets and is redefining how companies operate, how investors allocate capital, and how risks and opportunities are assessed in India’s capital markets.

By replacing the older Business Responsibility Report (BRR) with the more comprehensive and globally aligned BRSR, SEBI has ushered in a new era of transparency, accountability, and sustainability.

The BRSR comprises 140 parameters - 98 mandatory and 42 voluntary - covering wide-ranging topics from carbon emissions and energy usage to labour rights, executive pay, and supply chain ethics. This article explores the transformative impact of BRSR across corporate governance, investor behaviour, capital flows, and sectoral dynamics.

A STRUCTURED ESG MANDATE ANCHORED IN GLOBAL BEST PRACTICES

India’s BRSR initiative is one of the most robust ESG reporting mandates in the developing world.

It establishes a unified, standardized format for non-financial disclosures that aligns with globally respected frameworks such as the Global Reporting Initiative (GRI), the Task Force on Climate-related Financial Disclosures (TCFD), and the United Nations Sustainable Development Goals (UN SDGs).

Unlike the earlier BRR, which was narrower in scope, BRSR provides a comprehensive dashboard on a company’s ESG performance.

The framework encompasses disclosures on energy efficiency, greenhouse gas emissions, biodiversity impact, board composition, gender diversity, workplace conditions, and human rights policies.

By enforcing a high degree of comparability and consistency in ESG reporting, the BRSR framework gives investors a reliable basis to evaluate corporate sustainability.