The new report — Business Responsibility and Sustainability Report (BRSR)– will exchange the present Business Responsibility Report (BRR).
The transfer is predicted to herald larger transparency and allow market individuals to determine and assess sustainability-related dangers and alternatives, Sebi mentioned in a press release.
Under BRSR, listed entities have to disclose about an summary of the entity’s materials ESG (environmental, social and governance) dangers and alternatives, method to mitigate or adapt to the dangers together with monetary implications of the identical.
In addition, sustainability associated targets and targets and efficiency towards the identical have to talked about within the report, it added.
Environment associated disclosures cowl elements reminiscent of useful resource utilization (vitality and water), air pollutant emissions, green-house (GHG) emissions, transitioning to round financial system, waste generated and waste administration practices, bio-diversity.
Social associated disclosures would cowl the workforce, worth chain, communities and customers.
In the social associated disclosure, Sebi mentioned entities have to disclose about gender and social variety together with measures for otherwise abled staff and employees, turnover charges, median wages, welfare advantages to everlasting and contractual staff / employees, occupational well being and security, trainings.
At communities stage, listed entities must make disclosures on Social Impact Assessments (SIA), Rehabilitation and Resettlement, Corporate Social Responsibility, amongst others.
In the case of customers, the regulator mentioned listed entities have to disclose on product labelling, product recall, shopper complaints in respect of information privateness, cyber safety amongst others.
The BRSR can be relevant on the highest 1,000 listed entities by market capitalization.
In order to provide time to firms to adapt to the brand new necessities, Sebi mentioned the reporting can be on voluntary foundation for monetary yr 2021-22 and on a compulsory foundation from 2022-23.
However, firms are inspired to be early adopters of BRSR, thus being on the forefront of sustainability reporting, the regulator mentioned.
Sebi mentioned it was one of many early adopters of sustainability reporting for listed entities amongst its world friends. The submitting of the BRR containing ESG disclosures was first launched for listed entities in 2012 and since then, a variety of developments have taken place.
With the adoption of the Paris Agreement on local weather change and UN sustainable growth targets, adapting to and mitigating local weather change influence and transitioning to sustainable economies have emerged as main points globally, the regulator identified.
The pandemic has additionally accelerated the relevance of ESG issues to traders leading to elevated consciousness of traders and a shift in the direction of sustainable investing. The similar is mirrored within the spurt in new launches of ESG themed mutual funds and progress in belongings of such schemes, together with in India, it added.
As ESG investing turns into extra mainstream, disclosure necessities have to hold tempo with this transformation and the BRSR is important step in the direction of this course, Sebi famous.
BRSR is an initiative in the direction of making certain that traders have entry to standardized disclosures on ESG parameters.
“Access to relevant and comparable information, will enable investors to identify and assess sustainability-related risks and opportunities of companies and make better investment decisions,” Sebi mentioned.
At the identical time, firms will be capable to higher reveal their sustainability goals, place and efficiency ensuing into long run worth creation, it added.
Overall, increased requirements of ESG disclosures and transparency, will assist in attracting extra capital and funding.
Listed entities already making ready and disclosing sustainability reviews based mostly on internationally accepted reporting frameworks could cross-refer the disclosures made underneath such framework to the disclosures sought underneath BRSR.
The reporting necessities come after the board of Sebi authorized a proposal on this regard in March.
These necessities have been finalized based mostly on suggestions obtained from public session and intensive deliberations with stakeholders together with corporates, institutional traders, Sebi mentioned.
Further, a benchmarking train with internationally accepted disclosure frameworks was additionally undertaken.