In an endeavor to make listed entities more responsible to issues relating to the environment, elements of public interest and their economic responsibilities, the SEBI has issued the prescribed format for a Business Responsibility Report (“BRR”) by a circular on November, 4, 2015 (“BRR Circular”). As per the provisions of the Listing Regulations, the annual report of a listed entity will have to contain the BRR, which will contain disclosures/details, describing the initiatives taken by the listed entity from an environmental, social and governance perspective. The BRR Circular contains comprehensive principles to be adopted by listed companies as part of their business practices and a structured business responsibility reporting format and accordingly the listed entity will be assessed regarding the compliances. Key features of the BRR Circular are summarised below:
- Listed entities that have been submitting sustainability reports to overseas regulatory agencies or stakeholders based on internationally accepted reporting frameworks, will not be required to prepare a separate BRR, provided they submit the same to their stakeholders with a mapping of their report in comparison to guidelines prescribed under the BRR Circular;
- The format for the BRR includes disclosures relating to information regarding the listed entity’s financials, directors, employee related policies, consumer grievance mechanisms, company policies and the regularity of director’s assessment of the listed entity’s business responsibility;
- Listed entities are to conduct themselves as per the governance norms and principles provided for in the BRR Circular, in relation to inter alia ethics, transparency, accountability, sustainability of goods and services, wellbeing of employees, promotion of human rights and wellbeing of customers;
- The circular will come into effect within 90 (ninety) days of the notification of the Listing Regulations, i.e., September 30, 2015.
The BRR Circular emphasizes that considering the fact that listed entities have access to funds from the public, they have an element of public interest involved and are therefore obligated to make exhaustive continuous disclosures on a regular basis to the public. The BRR Circular ensures that listed entities are made responsible not only to their investors and customers but to their employees and the environment, by incorporating policies for the well-being of the same.