The need of the hour dictates a sustainable development and robust pathway to deal with climate change. After all, climate change is bound to impact basic necessities like food security, energy, and freshwater. Climate action matters because the adverse social, natural, and economic impact is knocking on the door.

And this is where BRSR, or Business Responsibility and Sustainability Report, comes into the fold. It represents an ideal solution for modern and highly competitive companies that want to grow and ensure transparency during the age of climate change.

Legally, SEBI or the Securities and Exchange Board of India requires the 1,000 leading entities to adhere to BRSR practices for the fiscal year 2022-23 onwards. Of course, it can be seen as a vital tool for every company to drive growth and achieve new heights of success.

A Progressive Stance

It is important for Indian companies to showcase that they are progressive enough to align their operational efforts with SDGs or Sustainable Development Goals. Besides, the long-term benefits of adopting BRSR will benefit company stakeholders and the local communities.

Purpose and Objective of BRSR

The foundational idea and purpose of enforcing BRSR are to propel businesses to engage with their stakeholders, investors, employees, customers, local communities, managers, government, media, suppliers, business partners, and future generations more thoughtfully.

In fact, BRSR encourages entities to think more than just about regulatory financial compliance and report on contemporary environmental impacts. The broad scope of BRSR pushes companies to address key climate change issues and paves the way to reduce their carbon footprint through strategic labour practices.

Remember, when it comes to business sustainability, BRSR covers different areas of ESG that are integral to maintaining compliance. In short, each industry will have to adopt specific guidelines and maintain best practices that align with the BRSR requirements. These alignments come down to the disclosure requirements that make it easier to adhere to regulations.

BRSR Regulations and Requirements

In terms of regulations, properly following BRSR requirements and making disclosures allow companies to keep an eye on the current business landscape and changing trends. Regulatory experts also profess that BRSR is a progressive reporting initiative that would favour Indian companies and local communities.

In fact, BRSR can help Indian-based entities navigate environmental and social impact. Once there is a clear realization and recognition of their environmental and social impacts, companies can build trust and maintain a high level of transparency across the board.

Key Parameters

From 2022-2023 onwards, Indian companies are mandated to submit a dedicated report on relevant ESG parameters. The hallmark parameter is BRSR, which mandates 1,000 listed Indian entities by market capitalization for disclosures. Listed Indian companies other than the leading 1,000 can submit their BRSR voluntarily for the fiscal year 2022.

Regarding the reporting form, SEBI has clarified that companies follow standard guidelines and broaden their overall scope. It means the extent of disclosures that require reporting should be more than just basic information. In terms of access parameters, SEBI wants companies to follow a strict BRSR format with proper guidance notes.

The initiatives outlined in motion revolve around ESG or Environmental, Social, and Governance model. In the end, 1,000 leading listed companies have to submit their BRR or Business Responsibility Report voluntarily to the Indian stock exchanges. This, in turn, would serve as part of their annual report.

How BRSR Would be Advantageous for Companies

Reduce Costs

Once you set and adhere to ESG goals, you will improve your financial performance over time. As long as your company has a dedicated ESG strategy, you can successfully achieve your short-term and long-term goals and automate efforts to reduce costs and reap the environmental benefits.

Companies can install a renewable power source rather than buy grid power or opt for fossil-fuel power to reduce overall power costs. Not to mention, putting in place a renewable energy project will boost annual profit margins for the company.

In fact, setting up and installing renewable energy projects will help companies save a lot of money. Besides, fossil fuel energy sources are vulnerable to more taxes, making it more sense to opt for renewable energy projects.

Integrate Comprehensive and Sustainable Frameworks 

It is vital to understand that the BRSR revolves around a globally accepted reporting structure. This reporting framework would allow companies to integrate other types of frameworks and render comprehensive disclosures.

On the surface, the reporting mechanism of BRSR may sound overwhelming, but it just requires periodic reporting and monitoring of specific metrics. BRSR also allows companies to directly cross-reference their disclosures across different frameworks and make the entire process more detailed and robust.

Spot Opportunities and Risks in Operational Processes

On top of reporting, companies should also be proactive in implementing new changes on sites. Companies leverage this heightened visibility, pave the way for more opportunities, and make sustainable and engaging brand efforts to move forward. By gaining trust and market competitiveness, companies will also be able to optimize their investment opportunities.

The more data companies collect – the more opportunities and risks they can identify within their business operations. This would make it easier to make an environmental regulatory response and calculate climate impact. But, again, the key is to focus on activities that can reduce the carbon footprint and minimize environmental impact.

Improve Brand Value

As the global business landscape gets more competitive, it has become more important for companies to maintain high visibility and garner the attention of customers. The good news is that companies can drive growth, generate more revenue, boost profit margins, and achieve environmental sustainability goals at the same time.

The trick is to align the expectations and needs of the customers, local communities, and employees. Companies need to ensure their BRSR reporting aligns with the sustainable development goals.

Final Thoughts

The fact of the matter is that building a robust BRSR is a practical solution for businesses to reduce operational costs and boost performance at the same time. In fact, companies can adopt a wide range of strategies to maximize their long-term value. In hindsight, BRSR is an ideal reporting mechanism that can transform Indian companies to grow, evolve, innovate, and, most importantly, be climate responsible in 2022-23.