Asia-Pacific

India Enhances Sustainability Reporting Rules for Listed Entities

Business Responsibility and Sustainability Reports will contain disclosures on ESG risks, sustainability performance, environmental metrics and social factors. 

The Securities and Exchange Board of India (SEBI) has published the format which the top 1,000 listed entities by market cap will be required to use for sustainability disclosures, along with guidance on the new reporting requirements.

The regulator had announced at a board meeting in March that it would be introducing new sustainability reporting requirements for listed entities, where a new report called the BRSR (Business Responsibility and Sustainability Report) would replace the existing BRR (Business Responsibility Report).

“The BRSR is a notable departure from the existing BRR and a significant step towards bringing sustainability reporting at par with financial reporting,” SEBI says.

The BSBR will contain disclosures relating to the listed entity’s:

  • material ESG risks and opportunities, approach to mitigate or adapt to the risks, along with the financial implications of the same;
  • sustainability-related goals, targets and performance;
  • environment-related disclosures, covering aspects such as resource usage (energy and water), air pollutant emissions, GHG emissions, efforts to transition to a circular economy, waste generated and waste management practices, bio-diversity;
  • social-related disclosures, covering its workforce (covering gender and social diversity, median wages, welfare benefits, etc.); communities (covering social impact assessments, corporate social responsibility, etc.); and consumers (covering product labelling, product recalls, and consumer complaints in respect of data privacy and cyber security).

Listed entities that are already preparing and disclosing sustainability reports based on existing international reporting frameworks (e.g. GRI, SASB, TCFD, Integrated Reporting) may cross-reference the disclosures made under such framework to the disclosures sought under the BRSR.

“The BRSR is an initiative towards ensuring that investors have access to standardised disclosures on ESG parameters,” SEBI says. “Access to relevant and comparable information will enable investors to identify and assess sustainability-related risks and opportunities of companies and make better investment decisions.”

SEBI says the higher ESG disclosure standards and transparency will enable companies to better demonstrate their sustainability objectives, position and performance, which will result in long term value creation, and help to attract more capital and investment.

BSBR reporting will be voluntary for FY 2021 –22 and mandatory from FY 2022 –23. “However, companies are encouraged to be early adopters of the BRSR, thus being at the forefront of sustainability reporting,” SEBI says.

The circular outlining the new requirements is available here.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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