The Delhi-based think tank Centre for Science and Environment (CSE) has welcomed the Business Responsibility and Sustainability Reporting (BRSR) initiative by the Securities and Exchange Board of India (SEBI). However, it has identified significant gaps in the current reporting practices and recommended improvements.
SEBI’s BRSR Initiative:
- SEBI introduced the BRSR framework in May 2021.
- Mandates the top 1,000 listed companies in India to disclose non-financial data.
- Includes efforts towards environmental stewardship.
- Covers financial years 2021-22 and 2022-23.
CSE’s Analysis:
- CSE’s analysis scrutinized 28 reports from 14 top companies over two consecutive years.
- Led by Nivit Yadav, programme director of the industrial pollution research unit at CSE.
- Identified shortcomings in the BRSR framework.
Identified Issues:
- Reliance on Consolidated Data:
- Obscures the performance of individual units within a company.
- Sustainability metrics should be unit-specific.
- Inconsistencies in Reporting:
- Companies modify the BRSR questionnaire leading to inconsistencies.
- Classification of essential indicators as voluntary undermines comparability.
- Need for Sector-Specific Reporting Guidelines:
- To provide relevant and comparable data.
- Align with international best practices.
Recommendations by CSE:
- Sector-Specific Reporting Guidelines:
- Provide more relevant and comparable data.
- Align with international best practices.
- Updates to Guidance Document:
- Periodic updates to clarify reporting requirements.
- Detailed instructions for reporting air emissions and waste management practices.
- Standardizing Reporting Format:
- Provide a protected spreadsheet template to prevent format alterations.
- Ensure uniform data presentation and enhance reliability.
- Detailed Reporting on Waste Management:
- Separate reporting for hazardous and non-hazardous waste.
- Detailed disposal methods for different types of waste.
- Mandatory Reporting Metrics:
- Specific energy consumption and specific water consumption.
- Presented in standard units to reflect efficiency and resource management.
Conclusion:
- Transparent environmental performance data is crucial for investor decision-making.
- Strengthening the BRSR framework is essential for better quality reporting.
- SEBI’s consideration of recommendations is vital for the broader goal of environmental sustainability.
Multiple Choice Questions (MCQs):
- What is the objective of SEBI’s Business Responsibility and Sustainability Reporting (BRSR) initiative?
- a) To increase corporate profits.
- b) To disclose only financial data.
- c) To provide non-financial data, including environmental efforts.
- d) To reduce transparency in corporate practices.
- Answer: c) To provide non-financial data, including environmental efforts.
- What is one of the primary issues identified by CSE in the current BRSR framework?
- a) Over-reliance on financial data.
- b) Lack of guidelines for financial reporting.
- c) Reliance on unit-specific sustainability metrics.
- d) Inconsistencies due to modified questionnaires.
- Answer: d) Inconsistencies due to modified questionnaires.
- What is one recommendation by CSE to improve BRSR reporting?
- a) Make reporting voluntary for companies.
- b) Avoid standardizing the reporting format.
- c) Provide sector-specific reporting guidelines.
- d) Reduce reporting on waste management.
- Answer: c) Provide sector-specific reporting guidelines.