From BRR To BRSR: Way Forward For Sustainability Reporting By Businesses

From BRR To BRSR Way Forward For Sustainability Reporting By Businesses

Any entity which is incorporated with an objective to earn profit has certain responsibilities towards itssuppliers, customers, investors, lenders, employees, and other stakeholders. According to their requirements, they are interested to track the developments in the entity which can be best informed to them by means of formal disclosures. These disclosures are broadly of two kinds: financial and non-financial. Financial disclosures include profit and loss account, balance sheet, cash flow statement, etc., whereas non-financial disclosures can be corporate social responsibility reporting, Board’s Reports, and applicable Corporate Sustainability Reporting.

Over the last few years, sustainability reporting has become a vital part of Integrated Reporting, which unites financial and non-financial parameters or disclosures incorporating an outline of a company’s ecological, commercial, and social impacts, owing to routine business operations & endeavors. (Read More: Does Registering Your Company Enhances Your Business?)

Business Responsibility Reporting

The Business Responsibility Report (“BRR”) emphasizes the Company’s efforts towards the creation of value, in an accountable manner, for all its stakeholders.

BRR to BRSR

The committee constituted by MCA introduced Business Responsibility & Sustainability Report (BRSR) by replacing the Business Responsibility Reporting (BRR). This change has been made to:

  • enhance the scope of the Report,
  • to transmit the thrust and sustainability and business responsibility more accurately.
  • By doing so, the Regulatory Authority has unfurled their support to all corporate to go global by sharing non-financial data along with financial data. Now, it is Value v/s Values to place corporate in the global arena.

Construction of the BRSR structure

Description of the BRSR is more vigorous as compared to BRR and hence provides parameters on a minute basis which is expected by stakeholders.

The BRSR structure intensifies on the basic and the fetching elements of sustainability and responsibility reporting. The BRSR formats have been constructed to assist as a single source of sustainability information reporting for companies beyond the country.

Some key observation that makes the concept of current BRSR attracted are as follow:

  • Initially, “Essential” & “Leadership” are the categories that prepare for the requirements. It is other statutory requirements that are examined as an obligation and always disturb corporate. Market leaders got an opportunity with this for sharing their ESG performance & appear why they should be preferred as “Market Leaders”.
  • Top Management, Finance, HR, EHS, CSR, Purchase to Marketing are the processes of an organization from which it encompasses data. Consequently, the organization which is placing BRSR activity as their core business will ensure sustainability in the future to come.
  • The “lite-er” version of the BRSR was also issued by the authority. It helps and allows the unlisted companies to match with the global requirements. Frequently these institutes are in the Value Chain of the Companies, with BRSR as mandatory requirements, as well as having clients outside India. So, in conserving the growth of the business, fulfilling the requirements of the “Lite-er” version can help.
  • “A company cannot grow in a silo” which comes into force with the inclusion of “Value Chain” referred to as one’s responsibility to execute ESG Parameters. The suppliers must develop apace with these market leaders.
  • It grants privilege to the leaders to classify their achievements in the right proportion because it is in Qualitative as well as Quantitative mode.
  • This non-financial reporting will infiltrate more and may be given for all listed companies as well as unlisted companies sooner or later. We can say so because it is in execution for the last few years and has come from 100 listed companies to 1000 listed companies.
  • BRSR is drafted to utilize as a platform for corporate to provide a more definite manner in India’s Journey to meet SDG by 2030. It is not meant to be merged with mere legal obligations, or CSR obligations, or ISO.
  • The format of BRSR will be acquired by every company baring no one. Although the clauses shall not befit equally to all industries like Health Care, Tourism, Entertainment, Transportation, IT Sector, Hotels, etc. still we should accept the format of BRSR on its initial stage. So, to resolve this limitation “Sector-Specific Format” will be published for more industry-specific data in far-future.

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