After having introduced the concept of Core Business Responsibility and Sustainability Reporting (BRSR), market regulator SEBI has now taken the next step of mandating assurance of this novel ESG reporting framework.

This mandatory assurance will have to be done on ‘BRSR Core’ (critical elements of BRSR) in respect of the top 150 listed companies of the country by market capitalisation. 

SEBI has now brought changes to its listing obligations and disclosure requirements (LODR) regulations to empower itself to specify the date this mandatory assurance norm will come into effect and the manner in which such assurance need to be obtained from time to time.

Indications are that this stipulation on assurance of ‘BRSR Core’ will apply from the current fiscal itself. 

Also listed companies will now have to make disclosures and obtain assurance as per ‘BRSR core’ for their value chain, with effect from and in the manner to be specified by SEBI from time to time, according to latest LODR changes.

Quantitative disclosures

The latest SEBI move to stipulate assurance of ‘BRSR Core’ is expected to provide comfort to investors, regulators and various ESG rating agencies.

Put simply, BRSR Core brings out the critical elements of BRSR and mandates 49 parameters for ESG reporting.  BRSR is intended towards having quantitative and standardised disclosures on environment, social and governance (ESG) parameters to enable comparability across companies, sectors and time. Such disclosures will be helpful for investors to make better investment decisions.

Commenting on latest SEBI move, Sanjeev Singhal, Chair, UNCTAD ISAR 39th session and Vice Chair Sustainability Reporting Standards Board, ICAI, pointed out that SEBI had mandated assurance of BRSR for top 150 listed companies by market capitalisation for FY23-24. 

“ICAI has already issued aasurance standard SSAE 3,000 as an enabling standard to issue assurance report on BRSR. Further, ICAI is conducting certificate course on BRSR for its members to build capacity. So far 18 batches have been conducted and more than 1,600 members have been trained in BRSR”, he added.

Inderjeet Singh, Partner, Deloitte India, said “assured ‘BRSR Core’ is a celebrated move by SEBI to ensure that non-financial performance of companies offers both confidence and inclusivity across stakeholders”.

Common ground

The 49 core indicators identified from BRSR will not just provide common ground for ranking and rating platforms to harmonise their procedures, the inclusion of value chain partners (both upstream and downstream) will also result in deeper penetration of NGRBC principles outside of the top 1000 companies, he added.

India’s top 1,000 listed companies by market capitalisation have in respect of FY22-23 begun disclosing/attaching a separate BRSR report in their annual reports for that year.

A recent survey by Deloitte India on ESG preparedness showed that Indian businesses see value in sustainability and building ESG capabilities.

Boardroom discussion

 Eighty-eight percent organisations believed sustainability regulations will directly impact their businesses. More than 75 percent organisations agreed that ESG is a boardroom discussion, the Deloitte India report on this Survey showed.

Also nearly 90 percent organisations believed ESG reporting will benefit them by improving brand reputation.

Nearly 75 percent organisations stated that their investors rate their ESG performance, findings of Deloitte India survey showed.