The concept of sustainability has garnered immense prominence in the working of corporations who are now fusing the environmental, social and governance (ESG) factors in their investment decisions. Organizations, investors and regulators are realizing the necessity of achieving the sustainable development goals (SDGs). The 2021 Conference of Parties[1] (Cop 26) held at Glasgow focussed upon the ways of managing climate change by increasing the energy requirements from renewable energy and reducing the carbon emissions by 2030. ESG has emerged as a major attribute to be considered while assessing the risk and performance of an enterprise.  It holds a paramount importance for different stakeholders:

  1. Businesses-ESG disclosures play a vital role in helping the companies analyze their capacity to sustain in the near future and to take quintessential steps to retain and increase their profit. Such disclosures would also lead to innovations by the companies. Sec. 166(2)[2] of the Companies Act, 2013 espouses the concept of ESG by imposing a duty on director of a company to act in good faith in order to espouse the objectives not only of the company and shareholders but also for the protection of the environment.
  2. Investors– Investors consider ESG disclosures in order to analyze the company’s approach towards sustainability which could impact its financial stability. They tend to avoid investing in companies whose business operations are in the orange or red zone where they could be perceived as harmful to the environment or where there are prohibitions, sanctions or general non-acceptance of the polity. 
  3. Consumers– Consumers are getting attracted towards the companies who have ESG as their mainstream component. In today’s time, consumers are becoming socially conscious and want to pay only for the brands who are championing for public concerns such as climate change, exploitation of natural resources, sustainable agriculture, climate change, illiteracy, violation of human rights, safety concerns of employees, shortcomings in corporate governance etc. 


The Ministry of Corporate Affairs, for the very first time, introduced the ‘Corporate Social Responsibility Voluntary Guidelines[3]’ in 2009 to guide the companies and foster the feeling of social responsibility in them so as to work in collaboration with government for the overall wellbeing and prosperity of the country. These guidelines were later incorporated into ‘National Voluntary Guidelines on Social, Environment and Economic Responsibilities of Business[4]’ (NVGs) in 2011 which not only included the key principles, but also provided for the strategy and indicators for reporting. In furtherance of this, Securities and Exchange Board of India (SEBI) imposed an obligation on the top 100 listed companies by capitalization to encompass Business Responsibility Report (BRR) in their disclosures, which further got extended to 500 companies.

Looking from the lens of investors, SEBI considered the disclosure of both financial and non-financial information as necessary and thus pioneered for the voluntary “integrated reporting” by these 500 top entities on their strategies, execution of master plans and potential for ‘value creation’ over a period of time. Finally, the BRR requirement was escalated to the top 1000 companies by market capitalization under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations[5], 2015 (“SEBI LODR”) in 2019. In the same year, MCA reviewed the NVG guidelines and came up with National Guidelines on Responsible Business Conduct[6] (NGRBC) which inculcated 9 principles by taking inspiration from the United Nations Guiding Principles on Business and Human Rights (UNGPs). A committee was formed by MCA to consolidate NGRBCs and BRR framework into a more robust format known as the “Business Responsibility and Sustainability Report (BRSR)[7].” It not only required report from top 1000 companies by market capitalization but also recommended to extend such obligation to unlisted companies having a turnover beyond specific limit. 

SEBI also introduced the ‘Disclosure Requirements for Issuance and Listing of Green Debt Securities’ in 2017 in order to entice the investors to invest in “green” projects such as conservation of biodiversity, sustainable usage of land, sustainable and renewable energy, public transportation, energy efficiency etc.


BRSR is bifurcated into 3 sections and follows a questionnaire based method of reporting. The sections are as follows:-

  1. General Disclosures– These disclosures will incorporate all the details of the listed entity; its products and services; performance of operations which includes the locations of service, national and international markets and contribution of exports to the total turnover of the entity; no. of employees; gender diversity; subsidiary, holding and associate companies including the joint ventures. It also requires the company to disclose the grievances received from shareholders, customers, workers or any other stakeholder associated with the entity and its status of pendency or resolution. 
  2. Management and Process Disclosures– Section B provides a broad structure of the management procedures of a company and asks for definite disclosures related to company’s compliance with NGRBC principles. There is also now a necessity to provide information on the performance of a company against each of the 9 principles and how frequently a company undertakes such review. 
  3. Principle Wise Performance Disclosure-Section C requires detailed information on all the principles of NGRBC. The information asked in this section is classified into 2 categories- “essential” indicators which are mandatory and “leadership” indicators which are not. A new structure of BRSR known as ‘BRSR Lite’ has also been developed so as to make the small companies become ESG conscious and voluntarily disclose the sustainability report. A large amount of data compilation takes place in this section so that one year progression can be reported.


The BRSR framework is more exhaustive in comparison to BRR as it requires disclosure across several parameters which was lacking in BRR. In a study[8] conducted by the Indian Institute of Corporate Affairs (IICA) titled “Baseline Assessment of Business and Human Rights Situation in India” in 2019 on BRRs of top 500 companies, it came to light that while the companies were capable of furnishing the information sought; the authenticity and accuracy of information supplied was questionable. Disclosures pertaining to the contract labor and supply chain were flawed. The study also underlined the limited response by the companies on specific questions like the procedures carried out for sustainable sourcing. Several important questions on the safety of employees and skill upgradation were there on which majority of the companies responded; however tried to avoid it at the same time by giving a very narrow answer so as to avoid falling into a thick soup. The greatest failure of the BRR was that the reporting mechanism was not standardized and hence, anything disclosed by a company could not be substantiated or cross-checked.

The loopholes in BRR are filled to a large extent by BRSR because it enhanced the reporting requirements by making it uniform by laying focus on both the global as well domestically framed indicators. SEBI has strived to bring out transparency by introducing the requirement of quantitative data as well. Hence, the companies would be bound to furnish the information on number of employees, differently abled workmen, locations, turnover, net worth etc. Gender diversity and ethics are placed as hallmarks of BRSR.  Inter-operability[9] has also been permitted by SEBI as a result of which the companies preparing their sustainability reports in accordance with internationally recognized frameworks such as SASB (Sustainability Accounting Standards Board) Reporting and GRI (Global Reporting Initiative) can cross-check the disclosures made under these frameworks with the ones asked under BRSR. This measure would starkly reduce the burden on Indian exporters and MNCs by ensuring uniformity. 


Indian companies are steadily advancing towards inculcating the ESG practices in terms of framing their policies which promote measures for safeguarding the environment; promoting human rights, and transparency and ethics in corporate governance. The current BRSR framework has been envisaged keeping in mind all the relevant factors from the viewpoint of stakeholders. However, there are certain grey areas which need immediate attention like the lack of sector specific information and straitjacket “yes/no” questions which could severely mislead a third party. 

BRSR has appeared as a dawn for investors in terms of providing a comprehensive disclosure resource to them. ESG norms would eventually become more and more inclusive and go beyond the top 1% of Global Inc. A move for India Inc. towards transparency is on the cards.

Aaditya Mootha, Intern (under the guidance of Partner, Nitin Jain)

[1] Ministry of Environment , Forest and Climate Change, ‘India’s Stand at COP-26’, available at (Last visited on Dec. 26, 2022)

[2] Sec. 166(2), The Companies Act, 2013, available at (Last visited on Dec. 26, 2022)

[3] Corporate Social Responsibility Voluntary Guidelines 2009, available at (Last visited on Dec. 27, 2022)

[4] National Voluntary Guidelines on Social, Environment and Economic Responsibilities of Business, available at (Last visited on Dec. 27, 2022)

[5] SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, available at (Last visited on Dec. 27, 2022)

[6] National Guidelines on Responsible Business Conduct, available at visited on Dec. 28, 2022)

[7] Business Responsibility and Sustainability Report, available at (Last visited on Dec. 28, 2022)

[8] G Dadhich & D Mishra, ‘Baseline Assessment of Business and Human Rights Situation in India’, Indian Institute of Corporate Affairs under the aegis of Ministry of Corporate Affairs (MCA) (2019), available at  (Last visited on Dec. 29, 2022)

[9] Guidance Note For Business Responsibility and Sustainability Reporting Format,  Para 1, available at (Last visited on Dec. 30, 2022)

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