Why in the News?

• In 2023, the Securities and Exchange Board of India (SEBI) introduced an updated framework for corporate sustainability reporting.
• The revised Business Responsibility and Sustainability Report (BRSR) framework mandates that companies assess and disclose the environmental impact of their entire value chain.

Key Features of the BRSR Framework

• Expanded Reporting Requirements: The BRSR Core builds upon the initial Business Responsibility and Sustainability Report (BRSR) introduced in 2021, which mandated the top 1,000 listed companies in India to disclose their ESG performance.
• Mandatory Assurance: Starting from FY 2023-24, the BRSR Core mandates that the top 150 companies obtain reasonable assurance on their ESG disclosures. This requirement aims to improve the credibility of the reported data and combat greenwashing, ensuring that companies provide reliable information about their sustainability practices.
• Nine ESG Attributes: The framework is structured around nine critical ESG attributes, which include greenhouse gas emissions, water usage, energy consumption, and employee well-being.
• Comply or Explain Principle: SEBI has adopted a “comply or explain” approach, allowing companies to either adhere to the specified reporting requirements or provide valid reasons for non-compliance.
• Alignment with International Standards: The BRSR Core is aligned with several internationally recognized frameworks, such as the EU Taxonomy and the Global Reporting Initiative (GRI) standards.  
• Focus on Value Chain: A significant aspect of the BRSR Core is its emphasis on assessing the ESG impacts of a company’s supply chain.

For India, every economic sector must contribute to greener means of production 

For India to achieve its sustainability goals and contribute effectively to greener means of production, every economic sector must play a vital role.

Importance of Sectoral Contribution to Sustainability

• Diverse Economic Sectors: The key sectors such as agriculture, construction, power, manufacturing, transport, and tourism are crucial for transitioning to a green economy. For example, electric transport and eco-tourism.
• Government Initiatives: The Indian government is actively promoting green growth through investments in priority sectors, which include manufacturing, renewable energy, and electric mobility.  For example, An allocation of ₹19,700 crore for the production of green hydrogen.
• Green Manufacturing: The manufacturing sector is a significant focus for greening efforts, with studies indicating that sustainable manufacturing practices can lead to substantial reductions in greenhouse gas emissions. For example, the (Zero Defect Zero Effect) ZED initiative aims to create a competitive, qualitative, and clean manufacturing ecosystem.
• Renewable Energy Commitment: India has set ambitious targets for increasing its non-fossil energy capacity to 500 gigawatts by 2030.
• Collaboration and Policy Frameworks: Initiatives like the Partnership for Action on Green Economy (PAGE) and various policy dialogues aim to facilitate collaboration among sectors to promote inclusive and sustainable economic growth.

Way forward: 

• Enhanced Accountability: Ensure stricter enforcement of the BRSR and BRSR Core frameworks, expanding the scope to cover more companies and sectors beyond the top 1,000 listed companies.
• Capacity Building: Provide training and resources to companies, especially small and medium enterprises (SMEs), to improve their ESG reporting capabilities and integrate sustainability into their core operations.

Mains question for practice:

Q Discuss the significance of the Business Responsibility and Sustainability Report (BRSR) framework introduced by the Securities and Exchange Board of India (SEBI) in promoting sustainable business practices among Indian corporations. 15M

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