India imposes new ESG reporting requirements on top 1,000 listed companies
On May 10, 2021, the Securities and Exchange Board of India (SEBI) issued a circular implement new reporting requirements related to sustainable development for the top 1,000 listed companies by market capitalization. A new disclosure will be made in the format of the corporate responsibility and sustainability report (BRSR), which is a significant departure from SEBI’s existing corporate responsibility report and an important step towards bringing sustainability reports into line with existing financial reporting standards.
Read on for more details on the disclosure requirements in the new BRSR format.
The new BRSR format is based on the nine principles of the Indian government “National guidelines on responsible business conduct” (the “RBC Guidelines“), which aim to define responsible business conduct for Indian businesses. RBC’s guidelines are based on leading international standards and practices, including United Nations Guiding Principles on Business and Human Rights, United Nations Sustainable Development Goals, the Paris Agreement and the Fundamental ILO Conventions. The principles address a range of sustainability issues, including business ethics and transparency, human rights, environmental safety and fair labor practices.
Reporting for each principle is broken down into core indicators, which are mandatory obligations, and leadership indicators, which operate on a voluntary basis. Some of the main disclosure requirements (under essential or leadership metrics) are presented below:
The new reporting requirements promote transparent and standardized information on ESG parameters and sustainability risks and opportunities among listed companies in India. This approach will help companies to better demonstrate their sustainability goals, position and performance in the market, which will drive long-term value creation and increase the ability of investors to make informed ESG decisions. cause.
BRSR reporting will be voluntary for the 2021-2022 fiscal year and mandatory from the 2022-23 fiscal year for the top 1,000 listed companies by market capitalization. It is about giving companies subject to these requirements sufficient time to adapt to the new requirements. However, companies are encouraged to quickly adopt the BRSR in order to be at the forefront of sustainability reporting. This approach will help companies to better demonstrate their sustainability goals, position and performance in the market, which will drive long-term value creation and increase the ability of investors to make informed ESG decisions. cause.