On May 10, 2021, the Securities and Exchange Board of India (SEBI) issued a circular implementing new sustainability-related reporting requirements for the top 1,000 listed companies by market capitalization. New disclosure will be made in the format of the Business Responsibility and Sustainability Report (BRSR), which is a notable departure from SEBI’s existing Business Responsibility Report and a significant step toward bringing sustainability reporting up to existing financial reporting standards.

Continue reading 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’s “National Guidelines on Responsible Business Conduct” (the “RBC Guidelines“), which are intended to define responsible business conduct for Indian companies. The RBC Guidelines are driven by leading international standards and practices including the UN Guiding Principles on Business and Human Rights, UN Sustainable Development Goals, the Paris Agreement and the ILO Core Conventions. The principles address a range of sustainability matters including business ethics and transparency, human rights, environmental safety and fair labor practices.

Reporting under each principle is divided into essential indicators, which are mandatory obligations, and leadership indicators, which operate on a voluntary basis. Some of the key disclosure requirements (under either essential or leadership indicators) are tabulated below:

The new reporting requirements promote transparent, standardized disclosures on ESG parameters and sustainability-related risks and opportunities among listed companies in India. This approach will help companies better demonstrate their sustainability objectives, position and performance to the market, resulting in long-term value creation and increasing the ability of investors to make informed ESG-related decisions.

BRSR reporting will be voluntary for FY 2021-22 and mandatory from FY 2022-23 for the top 1,000 listed companies by market capitalization. This is to provide companies subject to these requirements with sufficient time to adapt to the new requirements. Companies are encouraged, however, to adopted the BRSR early in order to be at the forefront of sustainability reporting.The new reporting requirements promote transparent, standardized disclosures on ESG parameters and sustainability-related risks and opportunities among listed companies in India. This approach will help companies better demonstrate their sustainability objectives, position and performance to the market, resulting in long-term value creation and increasing the ability of investors to make informed ESG-related decisions.

For more details, please refer to the format of the BRSR reporting format and the related Guidance Note published by SEBI.