Page 36 - Banking Finance July 2023

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responsible and sustainable manner. ESG factors can have The National Guidelines on Responsible Business Conduct
a direct impact on a bank's financial performance, (NGRBC) came in 2019.
reputation, and long-term viability.
Business Responsibility and Sustainability Report (BRSR) was
introduced in 2021 on a voluntary basis and made
Need for an ESG Reporting Framework:
mandatory from FY2022-23.
(i) Businesses have the power and resources to take good
climate action, create a more sustainable, resilient
The salient features of SEBI's BRSR
future, and spend their money for this cause. ESG
Guidelines:
Reporting norms will create visibility to investors about
such sustainable actions/practices by companies. The BRSR is a standardised reporting format that will provide a
clarity will help the investors to channel their basis to compare environmental, social and governance
investments in sustainability-conscious companies. goals across companies and sectors.
(ii) Globally, the landscape of sustainability reporting is
The BRSR guidelines are more elaborate and stringent than
evolving swiftly as a result of the push for the
the existing BRR norms. BRSR incorporates metrics of
Sustainable Development Goals and the growing
international frameworks on par with global ESG reporting
momentum of the climate action movement. ESG is
trends. It is a significant step towards bringing sustainability
becoming more important in this situation.
reporting at par with financial reporting.
(iii) Consumers are now demanding high standards of
sustainability and quality of employment from Some of the key disclosures sought in the BRSR
businesses. Regulators and policy makers are more
are:
interested in ESG because they need the corporate
(a) Sustainability related goals &targets and performance
sector to help them solve social problems such as
against the same
environmental pollution and workplace diversity. The
(b) Environmental disclosures related to resource usage
investor community has also become much more
(energy and water), air pollutant emissions, greenhouse
interested in it.
(GHG) emissions, transitioning to a circular economy,
waste management practices, extended producer
Evolution of ESG Reporting Norms in
responsibility, biodiversity etc.;
India
(c) Social disclosures covering the workforce, value chain,
ESG reporting in India started in 2009 with the Ministry of
communities and consumers that include:
Corporate Affairs, Government of India, issuing the National
(i) Employees/workers: Gender and social diversity
Voluntary Guidelines on Corporate Social Responsibility
including measures for differently-abled employees
(NVGs).
and workers, turnover rates, median wages,
welfare benefits, occupational health and safety,
In 2012, SEBI mandated that the top 100 listed companies
training etc.;
by market capitalisation file the Business Responsibility
(ii) Communities: Disclosures on Social Impact
Report (BRR) based on NVGs along with annual reports. BRR
Assessments (SIA), Rehabilitation and
was extended to the top 500 listed companies by market
Resettlement, Corporate Social Responsibility etc.
capitalisation in 2015 and to the top 1,000 listed companies
in 2019. (iii) Consumers: Disclosures on product labelling,
product recall, consumer complaints in respect of
CSR activities have been made mandatory under The
data privacy, cyber security etc.
Companies Act, 2013 for companies falling under the
prescribed category.
The 9 principles of National Guidelines of
Responsible Business Conduct (NGRBC) are
Integrated Reporting (IR) was introduced by SEBI in 2017
voluntarily for the top 500 companies required to prepare aligned in the BRSR report:
BRR. 1. Business should conduct themselves with integrity and
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