Will the second year of BRSR be fitful or fruitful?

As we enter the second year of BRSR (Business Responsibility and Sustainability Report) reporting, 250 more listed companies are preparing to disclose their sustainability performance. This next phase could unfold in one of two ways: it may be a fitful journey marked by operational hurdles and inconsistent compliance, or it could become a fruitful turning point, cementing ESG integration into the core of Indian corporate strategy.

The first year of BRSR reporting was not easy. Many companies had a tough time gathering the right data, upgrading IT systems, and finding people with the right skills in sustainability. On top of that, they had to meet both Indian and global requirements, which made things even more complicated.

In December 2024, SEBI introduced changes to the BRSR framework to help companies report more clearly and consistently. To improve reporting consistency and help companies structure their data collection, SEBI launched the “Industry Standards” for BRSR Core, a structured guideline covering nine critical ESG parameters.

In addition, SEBI has provided companies with the flexibility to choose between Assurance and Assessment for BRSR Core disclosures. But how do you decide which one suits your business best? Let’s break it down: Assurance provides greater transparency, structured and rigorous approach based on process analysis for verification of disclosures. Assessment offers an initial evaluation of your company’s reporting maturity and helps identify gaps.

These changes bring some relief. After the tough first year, companies now have time to prepare. Still, many are unsure about how to move forward. Some may continue doing the bare minimum just to stay compliant, while others could take the lead and help drive India’s sustainability journey.  

In our recent webinar, “BRSR Industry standards on reporting of BRSR Core: What you need to know,” we asked companies what they found most difficult. About 35% said they didn’t fully understand the BRSR requirements. Another 59% said collecting and reporting accurate data was their biggest challenge. Getting the right data often needs special tools and people with technical skills, which many companies are still trying to build.

Another issue is that many large companies rely on small and medium enterprises (SMEs) as suppliers. These SMEs are vital to the Indian economy. But many of them don’t have the money or technology to track things like electricity or water usage. This could make it harder for the next 250 companies to meet BRSR rules.

India has set an ambitious goal of reaching net-zero emissions by 2070. While countries in the Global North are using rules like CBAM to reach their targets, India’s BRSR framework will play a key role in our own journey. BRSR is helping companies be more open about their actions and improve step by step. This will help them cut down their environmental impact and support the country’s larger goals, strengthen corporate accountability, attract long-term investors who prioritize ESG performance, drive social equity and employee well-being and improve supply chain resilience.

As global investors put more weight on ESG performance, companies that follow BRSR and show real progress will have a better chance of attracting long-term investment. Since 2024, more businesses in India have started using ESG data platforms that make BRSR reporting easier. These tools use AI and machine learning to help collect accurate data and meet SEBI’s rules. Companies that invest in these tools today can make their operations stronger and also support a better future for all.

So, will this second year of BRSR reporting be fitful or fruitful?

The answer depends on how effectively Indian businesses prepare. Businesses that embrace transparency and sustainability today will not only future-proof their operations but also contribute meaningfully to a thriving and resilient planet for generations to come.

The opportunity is immense. The choice is ours.

 

23/04/2025 5:55:00 am