Unlisted companies in India too should be brought under a regime wherein they would report to stakeholders on how they achieve their environmental, social and good governance objectives, a government-appointed panel has suggested.

This should be mandated for unlisted companies above a specified threshold of turnover and/or paid-up capital, said a Corporate Affairs Ministry (MCA)-appointed panel in its report. This panel was tasked to come up with non-financial sustainability reporting formats that could be used by corporate firms.

Further, the committee, headed by Joint Secretary Gyaneshwar Kumar Singh, has in its report recommended that smaller unlisted companies below the prescribed threshold may, to begin with, adopt a lite version of the reporting format on a voluntary basis.

Sustainability reporting has gathered pace in India in the recent years ever since SEBI made it mandatory for the top-listed companies. Even this MCA panel has recommended that its newly-framed Business Responsibility Reporting formats be implemented across top 1,000 listed companies by market capitalisation or as prescribed by the markets regulator, SEBI.

SEBI had in December 2019 extended the Business Responsibility Reporting (BRR) requirement to the top 1,000 listed companies by market capitalisation, from the financial year 2019-20.

It may be recalled that MCA had constituted this panel for finalising the Business Responsibility Reporting formats in the Indian context.

This panel has recommended that the Business Responsibility Report (BRR) be called the Business Responsibility and Sustainability Report (BRSR). The committee has proposed two formats for disclosures — a comprehensive format and a Lite version. It is also of the view that the implementation of the reporting requirements should be done in a gradual and phased manner.

It has recommended that BRSR be integrated with the MCA-21 portal. This would ensure that all information already filed on MCA-21 portal by companies would be automatically filled while filing the BRSR. The endeavour of the committee is to ensure that the BRSR reporting format would serve as a single source for all non-financial disclosures.

The committee comprised representatives of MCA, SEBI, three professional institutes and two eminent professionals who had worked on developing the National Guidelines on Responsible Business Conduct (NGRBCs).

As a long-term measure, the committee envisions that the information captured through BRSR filings be used to develop a Business Responsibility-Sustainability Index.

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