The new enterprise duty and sustainability report (BRSR), which is an optional disclosure requirement for listed corporations this year and is developed to be mandatory from FY23 onwards, would assist investors to recognize firms’ enterprise sustainability dangers, analysts stated.
The ministry of corporate affairs’ (MCA) aim is to make BRSR reporting format a single supply for all non-monetary disclosures. Besides, it seeks to balance the objective of self-regulation via disclosures, even though making certain that no undue compliance burden is imposed on corporations.
In May, the Securities and Exchange Board of India (Sebi) introduced the new sustainability reporting needs below the BRSR. Key disclosures newly sought are atmosphere, social and governance (ESG)-associated dangers and possibilities.
The other version that has prevailed for numerous years – enterprise duty report (BRR) – is seen to be insufficient to gauge ESG dangers. Since FY20, major 1,000-listed corporations by marketplace capitalisation had to file BRRs with Sebi. In May 2020, a committee set up by the MCA came out with a report on enhancing and revising the format of enterprise duty reporting. Based on the panel’s report, SEBI released the new format of BRSR, which is mandatory for listed corporations from FY23 and optional for FY22.
Welcoming the development, AMRG & Associates CEO, Gaurav Mohan stated this delivers equal value to sustainability reporting at par with monetary reporting. “The sustainability of a business has gained much more relevance in the post pandemic world, this is seen from the shift of investors towards sustainable investing,” he added.
EY India national leader (climate adjust and sustainability services), Chaitanya Kalia pointed out that numerous organisations have been disclosing non-monetary information and facts to stakeholders applying unique frameworks. Now with BRSR, all major 1,000-listed firms will disclose their KPIs applying the very same framework.
“It will help stakeholders and investors to analyse and most importantly, compare the non-financial performance which is a reflection of how organisations are creating long term sustainability in a responsible manner. I believe the market will slowly, but surely start recognising the importance of non-financial performance along with financial performance to create long-term value,” he noted.
Nangia & Co LLP associate director (audit & assurance), Ankit Agarwal explained that the disclosures are framed maintaining in thoughts internationally accepted reporting frameworks like Task Force on Climate Related Financial Disclosures (TCFD), Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), and so on.
“These disclosures on climate and social (employees, consumers and communities) related issues of the entity have been significantly enhanced and made more granular. This will enable investors to identify and access sustainability related risks and rewards of the company to make an informed and calculated investment decision,” he stated.