Breaking Down BRSR: The Essentials of Business Responsibility and Sustainability Reporting

Do you want to build a company that is sustainable and practices responsible methods which would help combat the changing climate? Do you want to cultivate sustainable practices in your firm or company?

Then you have come to the right place. Welcome to the guide to BRSR where we will break down step by step guide that will help you understand how to work what BRSR means and how to make your firm work according to its guidelines.

As a consumer, which company would you invest in? Company A discloses the workings non-financial performance of the organisation, its social responsibility, ethics which it abides by and the initiatives which it takes towards the environment. Company B pollutes the water bodies, workers reported bad work ethics, not being paid minimum wages, and ignoring its responsibilities towards society.

By this guide’s end, you will learn what BRSR means and how you can implement it in your business.  

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report (BRSR), it is a new corporate reporting format produced by the Securities and Exchange Board of India, traces its origins to the Voluntary Guidelines for Corporate Social Responsibility (CSR) issued by the Ministry of Corporate Affairs (MCA) in 2009. It serves as a disclosure mechanism for businesses to communicate their corporate social responsibility to customers, focusing on non-financial disclosures aligned with the National Guidelines on Responsible Business Conduct.

The top 1000 companies by market capitalization are required by listing regulations to produce this annual report, applicable to both listed and unlisted companies, signaling a new business responsibility. Management and process disclosures showcase adherence to structures, policies, and processes outlined in the National Guidelines on Responsible Business Conduct (NGRBC).

These include essential indicators such as:

1. Environmental responsibility: information on how the company impacts the environment, such as energy consumption, greenhouse emission, water usage, waste generation, waste management and what steps are taken to mitigate these problems.
2. Social responsibility: This includes the details about the ethical labour practices, inclusivity practices, diversity, employee health and safety, value chain partners and other social responsibility practices taken by the business. 
3. Economic responsibility and impact: Analysis of the financial performance of the company, creating healthy competition among competitors, promoting small business and local developments.
4. Governance responsibility: Adherence to the rules and regulations, transparency, accountability, 

Now you may think, what is the need for this report?

Disclosing ESG responsibilities builds stakeholder trust and enables informed decision-making.

It holds companies accountable and aids in risk management, allowing proactive mitigation and ensuring long-term success. ESG reporting are an opportunity to find new business opportunities or to change market positioning.

Annual reports need to be published for BRSR Core compliance.

 Let us expand more and understand the nine principles which have to be disclosed under BRSR:

1. Businesses should conduct and govern themselves with integrity and in a manner that is ethical, transparent and accountable: This includes having anti-corruption and anti-bribery policies. 
2. Businesses should provide goods and services safely and sustainably: Including investments to improve environmental and social impact, reuse and recycling procedures, producer responsibility practices, etc.
3. Businesses should promote and uphold the well-being of all employees and those included in the value chain: Including employee benefit schemes such as health insurance, provident fund, and retirement benefits, making the work premises accessible to differently-abled employees
4. Businesses should respect the interests and be responsive to all their stakeholders: Including being answerable and accountable to the stakeholders, having clear channels of communication and frequent engagement.
5. Businesses should respect and promote human rights: Including giving training to employers and employees on human rights issues, setting minimum wages for workers, etc.
6. Businesses should respect and make efforts to promote and restore the environment:  Including comparisons of electricity and fuel consumption, year over year, as well as details on water usage from various sources like surface water, groundwater, and seawater.
7. Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent: Including affiliation with trade associations, issues relating to anticompetitive conduct and public policy.
8. Businesses should promote inclusive growth and sustainable development: Including details of rehabilitation and resettlement projects and policies for the vulnerable and marginalized groups.
9. Businesses should engage with and provide value to their customers in a responsible manner: Including consumer complaint and feedback mechanisms, cyber-crime and privacy policies, etc.

NOW LETS TALK ABOUT CORPORATE SUSTAINABILITY

As we discussed earlier, sustainability is one of the major pillars of an organisation and consumers are more attracted to an organisation that meets the sustainable needs identically to the customer. 

But how do we implement it?

1. Renewable energy: While requiring substantial initial investment, renewable energy proves highly beneficial for the planet over time. Sources like solar, wind, water, and geothermal significantly reduce carbon footprints and long-term electricity bills.
2. Waste Reduction: Opt for durable items over single-use products to reduce landfill waste. Avoid fast fashion; invest in quality pieces or try thrifting for unique finds.
3. Sustainable products: Choose eco-friendly products to promote sustainability. Carry a cloth bag when shopping and opt for paper over plastic. Recycle or donate unwanted clothes.
4. Ethical sourcing: Ethical sourcing demonstrates commitment to values and ethics, enhancing consumer perception. Though challenging and potentially costly, this step sets businesses apart from competitors.
5. Water Conservation: Water is something without which life cannot exist, and we are at a stage where water has become scarce. Sources of clean water are disappearing. Promoting practices to conserve water can make a huge impact on the environment. 

TYPES OF FRAMEWORK AND GUIDELINES

There are many different internationally accepted reporting frameworks available to businesses to frame their BRSR reports.

Global Reporting Initiative (GRI): GRI is an international independent standard which helps organisations, governments, and businesses communicate and compile their BRSR reports. It currently has been adopted by multinational organisations, governments, small and medium-sized industries, NGOs, etc. GRI currently provides the most widely used sustainability reporting standards.

Sustainability Accounting Standards Board (SASB): SASB standards focus on industry-specific sustainability issues that are financially material to companies and investors. They provide guidelines for disclosing material environmental, social, and governance (ESG) factors that are relevant to financial performance. SASB standards help companies communicate their ESG risks and opportunities in a manner that is useful for investors and other stakeholders.

Integrated Reporting Framework: Integrated reporting provides the stakeholders a view of the company’s ability to create a sustainable environment and value. The report encourages the companies to give a holistic view of their strategy on governance, performance and prospects.

Task Force on Climate-Related Financial Disclosures (TFCD): The TCFD framework aids companies in disclosing climate-related risks and opportunities in financial reports, including those associated with transitioning to a low-carbon economy and physical impacts of climate change. TCFD disclosures empower stakeholders to understand and address climate-related risks and opportunities.

United Nations Sustainable Development Goals (SDG): Sustainable development goals are a list of 17 goals that need to be adhered to by every country to make our planet sustainable by 2050. Some countries like India have been given a leeway till 2070 as we are still developing. Reporting and sticking to the goals demonstrates their commitment to addressing and contributing to solving global challenges. 

These guidelines will assist your company in filing sustainability reports.

WHAT ARE THE CHALLENGES FACED BY BUSINESSES

When something is implemented, it is common for people to come across challenges. With BRSR implemented, companies face their fair share of challenges so it becomes important for us to understand and address these challenges.

Lack of awareness and understanding: Numerous businesses struggle to grasp the full scope and importance of BRSR. They often overlook essential components when preparing reports and may not fully grasp the principles of responsible business conduct and sustainability reporting. Therefore, it’s essential for organizations to invest in training programs to improve employees’ understanding of BRSR principles.

Integrating Reporting into Existing Processes:Introducing BRSR in established organizations is challenging, necessitating staff training and structural changes. Seamless implementation demands robust communication and collaboration across teams and departments.

Gathering Accurate and Comprehensive Data: Gathering comprehensive data for reporting turns into a mammoth task for the organisation. They are required to collect a wide range of information related to environmental, social and governance. Developing a data collection strategy becomes crucial as without it, it can pose a problem for the company’s operations.

Keeping up with Evolving Reporting Standards: Reporting standards constantly keep on changing and with this constant change companies also have to be up to date with the latest reporting requirements. Adhering to constantly changing requirements and ensuring compliance can be challenging. The already existing business responsibility report also changed to BRSR process disclosure.

Balancing Short-Term Goals with Long-Term Sustainability:Balancing immediate profits with long-term sustainability goals poses a challenge for companies. Implementing BRSR reporting requires operational restructuring, sustainable practices adoption, and priority adjustments. Achieving harmony between financial viability and environmental/social accountability demands strategic planning, leadership indicators and management commitment at all levels.

BENEFITS OF JOINT VENTURES IN BRSR REPORTING

Additional resources: Joint ventures provide access to partners’ strengths, enhancing capacity for sustainable initiatives. Collaborations offer vital support for comprehensive sustainability reporting by pooling resources and expertise. This enables more effective addressing of sustainability challenges and meaningful progress toward goals.

Shared responsibility: Joint ventures distribute the accountability for sustainability efforts across multiple entities, ensuring that all partners are equally committed to responsible business conduct. This fosters transparency business responsibility reporting and accountability, as each partner is accountable for reporting their contributions to the joint venture’s sustainability objectives.

By sharing the responsibility, companies can more effectively track progress, identify areas for improvement, and demonstrate their collective impact on sustainability outcomes.

Enhanced credibility: Collaborating with established partners enhances a company’s credibility in its BRSR initiatives. When reputable organizations come together to tackle sustainability challenges and report their progress, it strengthens their commitment to sustainability and enhances their reputation within the industry. By leveraging the credibility and reputation of their partners, companies can enhance the trust and confidence of stakeholders, including investors, customers, and regulators, in their sustainability efforts.

Expanding market reach: Joint ventures frequently open up new markets and customer segments for companies to explore. By aligning their sustainability objectives and pooling resources, companies can tap into previously untapped opportunities for growth while advancing sustainable practices. This alignment allows for the exploration of new markets in a manner that promotes both business expansion and environmental and social responsibility.

BENEFIT OF COLLABORATION IN BRSR REPORTING

As compared to joint ventures, collaboration involves various stakeholders, competitors, government entities, non-profit organisations, and consumers. 

Sharing best practices:

Collaborations allow each stakeholder an opportunity to learn from other stakeholders and gather extensive knowledge. By being able to learn from each other’s experiences, companies can improve their strategies. 

Industry-wide initiatives:

Occasionally, entire industries eligible companies may join forces to establish shared reporting frameworks and standards for BRSR. These collaborative endeavours ensure uniformity and consistency in sustainability reporting across the industry, allowing stakeholders to evaluate and compare the sustainability performance of different companies effectively.

Data sharing and transparency:

Collaboration enables the exchange of sustainability data among stakeholders, promoting transparency and empowering investors and consumers to make informed decisions. Detailed supply chain and value chains data can also be shared.

Research and development partnerships:

Collaborative efforts can stimulate research and development activities focused on addressing sustainability challenges. Through the pooling of resources and expertise, companies can innovate and create sustainable solutions that positively impact society and the environment.

CONCLUSION

Understanding the key principles of Business Responsibility and Sustainable Reporting is now crucial for any business in today’s day and age. It not only improves the brand’s value and credibility but also enhances its reputation amongst its competitors and customers.

Transparency and accountability should always be the top priority of the organisation. Disclosing information can help the stakeholders to build trust in the organisation and help in better decision-making. Trust can be built by regularly and willingly reporting the successes and challenges faced by the company.