Business Responsibility and Sustainability Reporting by Listed Entities

October 4, 2022
Business responsibility and sustainability

By Rupin Chopra and Apalka Bareja

Background: In recent times companies have been asked to engage more meaningfully with their stakeholders through disclosures in relation to Environmental, Social, and Governance responsibilities.

SEBI in 2012, mandated the top 100 listed entities (by market capitalization) to file Business Responsibility Reports in the annual report according to National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business in a prescribed format.

In 2019, SEBI extended the requirement to include BRR in their annual report to the top 1000 listed entities (by market capitalization) from the financial year 2019-2020.

Environmental, Social, and Governance Goals

Environmental, social, and governance goals are a set of standards for a company’s operations that force companies to follow better governance, ethical practices, environment-friendly measures and social responsibility.

Environmental criteria consider how a company performs as a steward of nature.

Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.

Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

National Guidelines on Responsible Business Conduct

The National Guidelines on Responsible Business Conduct intends to not just make companies more responsible and accountable but also to create a whole ecosystem to ‘Protect1, ‘Respect1 & ‘Remedy’ as envisaged in the UNGPs.

Business Responsibility and Sustainability Reports

In 2021 SEBI by making amendments to regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 through circular no SEBI/HO/CFD/CMD-2/P/CIR/2021/562 SEBI has brought new reporting parameters on ESG called Business Responsibility and Sustainability Reports.

The BRSR disclosures should have performance reviews of the listed entities against the nine principles of National Guidelines on Responsible Business Conduct and report under essential indicators and leadership indicators. Leadership indicators are voluntary and essential indicators are mandatory.

The purpose of the BRSR is to bring about transparency between the company and its investors, stakeholders, regulators and public at large regarding the relevant non- financial sustainability information.

In the beginning the companies would be required to provide a statement regarding the challenges and risks that they would have to take in order to be more socially, environmentally aware and properly governed company.

The disclosures that would be required to be made under the BRSR would be as follows:

Section A: General Disclosures

This section would simply state the details of the listed entity which would include information such as Name of the Company, CIN of the company, Contact details, Reporting boundary whether the disclosures made under this report made on standalone basis or on a consolidated basis. Details of employees, operations, products or services, CSR details, complaints or grievances on any of the nine principles of National Guidelines on Responsible Business Conduct.

Section B: Management and Process Disclosures

This section would provide the approach of the management regarding the NGRBC principles.

Approach of the management should include preparation or identification of policies for each of the principles, setting of specific goals within specific timelines and performance of the entity on such goals and standards.

Section C: Principal Wise Performance Disclosure

This section of the report is aimed at helping entities demonstrate their performance in relation to the NGRBC principles and core elements with key processes and decisions.

The entity is supposed to be provide the information in this section through Essential indicators and Leadership indicators. It is important to note that Essential indicators and compulsory for the entity to report but leadership indicators are voluntary.

The National Guidelines on Responsible Business Conduct principles are as follows:

PRINCIPLE 1 : Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and Accountable.

PRINCIPLE 2 : Businesses should provide goods and services in a manner that is sustainable and safe.

PRINCIPLE 3 : Businesses should respect and promote the well-being of all employees, including those in their value chains.

PRINCIPLE 4: Businesses should respect the interests of and be responsive to all its stakeholders.

PRINCIPLE 5 : Businesses should respect and promote human rights.

PRINCIPLE 6 : Businesses should respect and make efforts to protect and restore the environment.

PRINCIPLE 7 : Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.

PRINCIPLE 8 : Businesses should promote inclusive growth and equitable development.

PRINCIPLE 9 : Businesses should engage with and provide value to their consumers in a responsible manner.

Benefits of Business Responsibility and Sustainability Reports BRSR

While it sounds like a big headache for the entities with regard to new compliances but it also helps the stakeholders in recognizing the entities commitment towards being ESG compliant and deriving benefits like attracting talented personnel, responsible investors, loyal consumers, value creation to shareholders, increased access to capital and many more.


The new BRSR is brought with the objective of creating awareness and encourage better investment decisions. And with SEBI enforcing these types of disclosures under this report it will bring about more transparency, accountability and provide standards for the entities.

This new mechanism of reporting the actions of entities regarding the environment, social and governance will encourage more and more entities that are not yet mandated to provide this report but would be inspired in doing so voluntarily in order to compete with other entities in making their organizations more sustainable and take steps towards being more responsible.

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