MASTERING AND STREAMLINING YOUR BRSR PROCESS

Have you ever looked at the BRSR report requirements and felt overburdened and stressed? Are you trying to find a way through which you could streamline your reporting process and meet its requirements hassle-free?

It looks like your cursor brought you to the right place! In this blog, we will break down each and every step from what is the BRSR report, what are the benefits of implementing a strategy, what challenges you may come across and many more. By the end of this blog, you will be completely well-versed and able to create an efficient report. 

UNDERSTANDING THE BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

With the ESG standard constantly evolving in the business sector and the demand for businesses to be transparent in their work, brings about the need for the Business Responsibility and Sustainability Report (BRSR). The compliance is presided over by the Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs. This is a revised version of the BRR report which was introduced by SEBI for Environmental Social and Governance requirements, marking a significant transition from the existing business responsibility report to a more comprehensive BRSR to clarify the terminology and expectations around sustainability and business responsibility.

It is based on the format of the nine principles of the National Guidelines for Responsible Business Conduct (NGRBC)

In 2012, the BRR report was brought about, mandating the top 100 listed companies by market capitalisation. This evolved into the BRSR in 2021, now the eligible companies are the top 1000 companies by market capitalisation. The introduction of the existing Business Responsibility Report in 2012 was a pivotal moment, setting the stage for the evolution into the BRSR, which requires companies to provide quantitative metrics on sustainability-related factors, reflecting a broader scope of business responsibility.

Through this report, SEBI has defined ESG disclosures for all the companies.

It is a standardised format. It aligns all financial and non-financial disclosures of the company, to prompt transparency to the stakeholders of the company.

It includes three types of disclosures:

1. General disclosures: this includes the basic information of the company such as the size, composition of employees, location, CSR activities, etc.
2. Management disclosure: this includes information about the policies and principles concerning leadership, governance, stakeholder engagement, etc.
3. Principle-wise disclosure: this includes the disclosure of the performance according to the nine principles of NGRBC.

There are two types of indicators:

Essential indicators: These indicators are mandatory as they disclose data regarding environmental components such as emission, consumption, waste, and well as the social impact of the company.

Leadership indicators: These indicators are voluntary for companies who voluntarily want to be more ethically responsible. These include employee benefit schemes, ethical awareness and training, etc. It also includes advanced reporting on energy consumption and scope 3 greenhouse gas emissions.

It is an annual report, to be published at the end of each financial year. The companies need to make this report according to the given BRSR format.

BENEFITS OF THE BRSR REPORT

Compliance with SEBI guidelines for the best report can reap fruits for your business, especially when it comes to responsibility and sustainability reporting. The Business Responsibility and Sustainability Reporting (BRSR) framework is a significant step towards enhancing business value through sustainable practices. Not only can it help internally to develop economic functioning but also externally in many different ways.

Enhanced business value:

Every business in today’s market is trying to develop ways to manufacture sustainable products or become sustainable in their practices. The report allows companies to disclose their work and change their market positions, which can enhance their brand value. Investors actively look for companies that offer sustainable products, hold accountability for actions and are transparent about their workings. Completion and timely publishment of ESG reports provide the companies an opportunity to alter their market position.

Increased capital investment:

Companies that strongly display their ESG metrics are bound to attract more investors. Investors all around the world search for companies that adhere to not only ESG regulations but also have inclusivity and diversity and are transparent. These companies are bound to attract potential investors.

Lowered risks:

With robust ESG reporting, companies are equipped to identify potential future risks. This provides the management with ample time to formulate risk management plans.

Attract new talent:

New employees are motivated by the idea of sustainability and strive to join organisations that share similar sentiments. This gives the companies opportunities to hire creative and talented individuals and improve efficiency.

Enhanced shareholder engagement:

To compile the whole BRSR report accurately, all shareholders need to have an active role in providing all the necessary information required. By involving the shareholders in the process, it harbours trust and loyalty towards the organisation ensuring long-term business success and increasing the credibility of the company.

SETTING GOALS AND OBJECTIVES FOR THE REPORT

Setting clear goals and objectives from the get-go helps streamline and ease the process of making the whole report with clarity. It allows businesses to address specific areas and develop specific plans. 

Evaluate current business operation:

Begin by evaluating your whole business operations and identify areas that need improvement. Assess social, economic and environmental aspects of your business operations. 

Conduct a deep dive:

After evaluating your business operation, proceed forward to conduct a deep and comprehensive dive into domains such as energy consumption, waste management, employee well-being, etc. This process will help to accurately pinpoint the areas of problems.

Engage your stakeholders:

Make stakeholders part of your goal-setting process. These include investors, suppliers and customers. It can include conducting surveys, inviting them to board meetings, etc. Their inputs provide valuable insights for formulating future goals and letting them be part of the decision-making process fosters loyalty for the company. 

Setting smart goals:

Establish Specific, Measurable, Attainable, Relevant and Time-bound (SMART) goals for each of your objectives. For instance, if you want to switch to renewable resources for energy, the SMART goal will be to increase the use of renewable energy by 25% in the next five years.

Develop an action plan:

After setting up goals, make a plan on how you would achieve the said goal. Take on ideas and suggestions. Formulate teams, delegate responsibilities and complete them in a time-bound manner.

Monitor and evaluate:

Regularly monitor and evaluate the work and ensure it is aligned with the requirements of the report and that completion is on track with the deadline you have set. Constant monitoring provides insights and enables you to make necessary changes if necessary. 

HOW TO ENSURE YOUR DATA IS ACCURATE?

Even if you collect all the necessary data, you need to ensure that it’s accurate before disclosing it to the stakeholders and the public at large. The accuracy of the report leads to increased credibility among the shareholders.  

1. Verify data: During the data collection process, keep on verifying your data by comparing it with past records such as financial records and keep on updating the data. 
2. Internal review: Conduct a robust internal review by involving all the major stakeholders and representatives from all the departments to maintain the accuracy of the reports.
3. External review: Following the internal review, conduct an external review through independent parties such as auditors and consultants. These third parties provide you with insights and act as a credible source demonstrating your commitment to transparency. 
4. Adherence to standards: To ensure consistency of your data, comply with the internationally accepted reporting frameworks such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) or International Integrated Reporting Council (IIRC). 
5. Documentation: Ensure you keep records and thorough documentation of all reports, sources and calculations and these act as evidence of the reports’ accuracy and are provided anytime to the shareholders warranting transparency. Collate periodic and annual reports.
6. Continuous process: The process of making a BRSR report is a continuous one. Constantly keep on taking feedback from stakeholders to improve the accuracy of the report. 
7. Training: Provide necessary training to employees for the processes involved in making the report so they are equipped with the necessary skills to ensure they understand the importance of its accuracy.

CHOOSING THE RIGHT ESG SOFTWARE

To streamline your BRSR reporting process, you must choose a software that can assist your organisation’s needs. The right kind of software can ease your data collection, ensure accuracy and maximise your effectiveness in the report. 

1. Identify your needs: start by identifying your organisation’s specific needs. It can be data collection, verifying the data or any unique compliance criteria that are applicable to your industry. 
2. Evaluate the features: While looking for software and companies to assist you with your BRSR report, identify the one that provides you with a comprehensive service for your reporting needs. Compare different companies based on their data analysis tools, compliance tracking and report generation. Software such as GovEVA supports you with your BRSR compliance and framework. 
3. Scalability: The size and volume of your data will grow as your business grows. Ensure that you choose a software that grows with your business and can adapt to the changes
4. Straightforward interface: make sure the interface of the software is easy to use and navigate, and which would require minimal training to the staff assigned to the BRSR report making. A visually appealing dashboard can improve efficiency and streamline the process. 
5. Data security and Privacy: Ensuring privacy is of the utmost importance. Ensure the software you choose has appropriate privacy standards. Keep a watch for functions like encryption. Back-ups, two-factor authorizations, etc.

IMPLEMENTING EFFECTIVE BRSR WORKFLOW

Business Responsibility and Sustainability Report has become crucial for an organisation, but collecting the required data is humongous. Without proper guidelines and a process to streamline, it can become difficult to provide an accurate report. By implementing best practices and adopting a clear objective, you can ensure a comprehensive and efficient reporting process. 

1. Assess the existing workflow: Start by assessing your current workflow and identify what changes need to be made. Pick out all the repetitive tasks and identify which ones can be automated to reduce manual labour. 
2. Design a workflow: After thoroughly assessing the existing workflow, now it’s time to design a new one. Define roles and responsibilities to different stakeholders such as human resources, value-chain, etc Allocated sufficient resources to each department for the process to run smoothly.  
3. Use automation tools: Include technology and use automation tools to reduce the burden of work for repetitive tasks. This not only ensures accuracy but can also minimise errors and save time. Make sure to not solely rely on automation tools but also utilize human resources to make the report comprehensive. 
4.  Ensure clearer communication: Ensure clear pathways of communication between all stakeholders. Make sure there are no obstructions throughout the scalar chain. Use the provision of gangplank wherever necessary. Establishing clear communication channels can improve coordination and make the information accessible to all stakeholders involved. 
5. Training and upskilling: Compliance requirements are ever-evolving. Provide timely training sessions to your employees. Make sure that they have a clear understanding of the requirements and responsibilities of their departments.
6. Review and improve: Keep on checking your progress from time to time to ensure that you are complying with the requirements. Consult with your higher-ups if there are any modifications necessary. Keep an eye out for new updated and ensure your report remains up-to-date. 

BRSR REPORTING TRAINING

Providing training to the employees is crucial as it helps ensure accuracy and can improve the efficiency of the report. Invest in a comprehensive training program for your team.

1. Assess training needs: Before investing in an intensive training program, conduct an internal assessment to know in what areas training is required. Conduct interviews, surveys and performance reviews to identify the gaps.
2. Develop a training program: After assessing the areas that require training, develop a robust training program that comprehensively covers all the requirements. It should include both theoretical and practical understanding.
3. Provide expert guidance: Bring in experts in the field to deliver the training sessions. These experts can offer valuable insights helping team members understand concepts and their importance of accuracy.
4. Focus on ESG principles: During the training ensure that the team members grasp a comprehensive understanding of ESG concepts such as sustainability, human rights, social impact, etc. These concepts are the core principles of the ESG report which makes it crucial for team members to understand its importance.
5. Include management and process disclosures: It’s essential to incorporate training on management and process disclosures, emphasizing the importance of understanding these disclosures for accurate reporting and governance.
6. Practical application: Practical application of the concepts along with theoretical knowledge, helps the team members to grasp onto concepts with ease. Make sure that the training program includes real-life examples and case studies and provides members with practical problems for them to solve themselves.
7. Continuous learning: Training is not a one-time affair. You need to brush up on your knowledge and skills periodically. Encourage your team members to attend similar webinars, and workshops, and keep up with the latest trends.

OVERCOMING CHALLENGES OF STREAMLINING BRSR REPORT

There can be numerous challenges you can encounter while making your BRSR report. Below we will discuss objectives that will assist you in overcoming these challenges and help you streamline your report.

Define clear objectives:

Understand the requirements of the report and pinpoint what you need to focus on.  Make SMART goals with achievable targets. Communicate these to your shareholders for clarity and their contribution.

Overcome Resistance to change:

You may come across certain shareholders, who may be reluctant to change while introducing changes to existing processes for the BRSR report. Inform them how it improves efficiency. 

Assign and delegate:

Create teams and assign certain aspects of the report collection to each one of them. This will reduce confusion, and duplication of reports and include stakeholders in the report-making process. Automate certain processes to reduce manual labour.  

Compliance requirements:

Keeping up with the ever-changing regulatory requirements can be rather daunting. Establish a designated team to keep a watch on the latest trends and to ensure compliance with the reporting standards. Additionally, adhering to the NGRBC’s nine principles necessitates principle-wise performance disclosures, showcasing a company’s commitment to responsible business conduct through reporting on essential and leadership indicators for each principle.

CONCLUSION

As we have come to the end of the blog, you are now thoroughly equipped with the knowledge of how to streamline the BRSR process and easily adapt to the BRSR requirements. Understand your company’s needs and develop an action plan.

You begin with evaluating your current process and identifying what needs to be improved. You then implement various tools and software for your reporting process. You constantly evaluate every step to ensure there are no errors and ensure you are up-to-date with all the required changes. This process can help you prioritize your key metrics and key performance indicators (KPIs).