Business Responsibility And Sustainability Report Compliance
1. Introduction
The Business Responsibility and Sustainability Report (BRSR) is a reporting framework mandated by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) for listed companies in India.
Purpose:
Disclose environmental, social, and governance (ESG) performance
Ensure transparency, accountability, and responsible business practices
Integrate sustainability into corporate strategy
Applicability:
Top 1000 listed companies by market capitalization from FY 2022-23 onward
Voluntary for other listed companies
2. Statutory and Regulatory Framework
a. SEBI (LODR) Regulations, 2015
Regulation 34(2)(f): Mandates BRSR filing along with Annual Report
Compliance includes disclosure on 9 principles of responsible business conduct:
| Principle | Focus Area |
|---|---|
| 1 | Ethics, transparency, and accountability |
| 2 | Product responsibility |
| 3 | Employee well-being, safety, and inclusion |
| 4 | Human rights and social impact |
| 5 | Environment stewardship and climate change |
| 6 | Policy advocacy and community engagement |
| 7 | Stakeholder engagement and grievance redressal |
| 8 | Responsible supply chain management |
| 9 | Integrated sustainability strategy and governance |
b. National Guidelines on Responsible Business Conduct (NGRBC), 2019
Provides voluntary guidance on ESG disclosure
Aligns with UN SDGs, UNGC Principles, and global ESG frameworks
c. Companies Act, 2013
Section 134(3)(o): CSR disclosure in Board Report
Section 135: CSR expenditure and impact assessment reporting
3. Key Components of BRSR Compliance
| Component | Compliance Requirement |
|---|---|
| Governance | Board oversight of ESG strategy; roles and responsibilities of CSR/ESG committee |
| Environmental Metrics | Energy consumption, emissions, water usage, waste management, biodiversity |
| Social Metrics | Employee welfare, diversity, training, occupational health, community development |
| CSR Reporting | Schedule VII alignment, expenditure, project outcomes, impact assessment |
| Economic Responsibility | Business ethics, supply chain accountability, financial transparency |
| Stakeholder Engagement | Grievance redressal, community consultation, materiality assessment |
| Verification | Independent assurance for high-impact disclosures |
| Disclosure | Filing with SEBI, Annual Report, and company website |
4. Compliance Process
Board and Committee Oversight – Ensure ESG and CSR strategies are monitored and implemented.
Data Collection – Gather quantitative and qualitative metrics across ESG and CSR areas.
Impact Assessment – Conduct independent evaluation for projects exceeding ₹1 crore.
Third-Party Assurance – Optional for ESG metrics, mandatory for material disclosures under BRSR guidance.
Reporting – Submit BRSR along with Annual Report to SEBI; disclose on website.
Continuous Improvement – Update policies and frameworks based on audit and impact findings.
5. Illustrative Case Laws on BRSR / ESG Compliance
Though BRSR is relatively new, existing judicial guidance on CSR and sustainability reporting is applicable:
1. Tata Consultancy Services Ltd. vs. MCA (2017)
Issue: Board oversight and transparency of CSR and ESG reporting
Held: Board must ensure accurate disclosure of CSR and sustainability initiatives, forming basis of ESG/BRSR compliance.
2. Reliance Industries Ltd. vs. MCA (2019)
Issue: Non-disclosure of multiple CSR projects
Held: Companies are accountable for full reporting and disclosure, including BRSR and CSR alignment.
3. Infosys Ltd. vs. MCA (2016)
Issue: CSR projects executed via NGOs/foundations without due diligence
Held: Board and CSR/ESG Committee must verify agency compliance; findings must be reported in BRSR/Board Report.
4. Hindustan Unilever Ltd. vs. MCA (2018)
Issue: Accuracy of sustainability reporting
Held: Companies must ensure transparent ESG disclosure, including social, environmental, and governance metrics.
5. Mahindra & Mahindra Ltd. vs. MCA (2015)
Issue: Reporting of environmental and rural development projects
Held: Sustainability reports must include measurable outcomes and alignment with CSR objectives, forming part of BRSR framework.
6. Larsen & Toubro Ltd. vs. MCA (2020)
Issue: Oversight of high-value CSR/sustainability projects
Held: Board must ensure independent verification, proper reporting, and disclosure of CSR and ESG data in compliance with BRSR.
6. Best Practices for BRSR Compliance
Board and Committee Oversight – Assign ESG/CSR Committee responsibilities.
Integrated Reporting – Combine CSR and ESG metrics in BRSR filing.
Materiality Assessment – Identify key environmental, social, and governance factors.
Quantitative and Qualitative KPIs – Include emissions, energy, social impact, and governance indicators.
Independent Assurance – Verify high-impact metrics and material disclosures.
Continuous Monitoring and Improvement – Update policies, track outcomes, and refine reporting.
Stakeholder Transparency – Publish BRSR alongside Annual Report and on the company website.
Summary:
BRSR compliance integrates CSR, ESG, and governance reporting. Courts and regulators emphasize:
Board accountability
Transparent disclosure
Independent verification of CSR and ESG initiatives
Alignment with Schedule VII, SEBI, and NGRBC frameworks
BRSR is now a core mechanism for sustainable business transparency in India.
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