Business Responsibility and Sustainability Reporting

Understanding of Business Responsibility and Sustainability Reporting

1. Background There was no India specific corporate framework, either voluntary or mandatory, relating to sustainable development till 2011, when the Ministry of Corporate Affairs (MCA) released the National Voluntary Guidelines (NVG). There were many mechanisms and guidelines that were released by the international and national bodies that urged the Indian authorities to revise and align the NVGs

2. • July 2011- MCA releases National Voluntary Guidelines (NVGs) • August 2012- SEBI circular for the top 100 listed companies to disclose BRR in line with NVG • 2015- United Nations Sustainable Development Goals 2030 is released • 2015-16- The applicability of BRR extended to the top 500 listed companies • March 2019- MCA revised the NVGs to National Guidelines on Responsible Business Conduct (NGRBC) • December 2019- The applicability of BRR extended to the top 1,000 listed companies • August 2020- MCA report on BRR with the proposed BRSR • May 10, 2021- SEBI Circular on BRSR by Listed Entities Chronology

3. Enablers to SEBI NOTIFIED BRSR UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS (UNSDG) 2030 There are total 17 Sustainable Development Goals (SDGs) and 169 targets with a targeted timeline of 2030 that cover diverse topics from ending poverty to making partnerships, The five Ps of SDGs are 1. People 2. Planet 3. Prosperity 4. Peace 5. Partnership adoption of the Paris Agreement on Climate Change and UN Sustainable Development Goals The COVID pandemic has further accelerated the relevance of Environment, Social and Governance (ESG) Reporting of entities performance and disclosure requirements for non-financial information needs to keep pace with this change and the mandate of BRSR is a significant step towards this direction All the above led to the the amendment to Regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD - NRO/GN/2021/22 dated May 05, 2021, SEBI has introduced new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR )

4. BRSR As per the new reporting requirements, with effect from financial year 2022-2023, filing of Business Responsibility and Sustainability Reporting (BRSR) mandatory for the top 1000 listed companies (by market capitalization) BRSR Reporting for FY 2021-22 on voluntary basis

5. FIDUCIARY DUTIES OF DIRECTORS TOWARDS COMPANY’S STAKEHOLDERS, COMMUNITY AND ENVIRONMENTAL PROTECTION - SECTION 166 OF COMPANIES ACT, 2013 Directors are responsible for disclosures to the stakeholders. All interested parties in a business spanning from customers, employees, regulators, people living in the surrounding areas, the people who get affected by the actions of the organisation have the right to know the issues that relate to them, especially those that are “Material” or significant enough to be disclosed. These duties are in line with the nine principles of NGRBC.

6. The format of Business Responsibility & Sustainability Report as per Annexure - I of the SEBI Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 consists of three sections A, B, C Section A- explaining the General Disclosures Section B - Provides a table full of questions on Management and Process disclosures related to the businesses aimed at demonstrating the structures, policies and processes as well as as Governance, Leadership and Oversight Section C provides the disclosure of principle wise performance of the businesses across the nine principles of NGRBC. The desired information is categorized into “Essential” and “Leadership” indicators.

7. SECTION C: 9 PRINCIPLES PRINCIPLE 1 Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and Accountable. PRINCIPLE 2 Businesses should provide goods and services in a manner that is sustainable and safe PRINCIPLE 3 Businesses should respect and promote the well-being of all employees, including those in their value chains PRINCIPLE 4: Businesses should respect the interests of and be responsive to all its stakeholders PRINCIPLE 5 Businesses should respect and promote human rights PRINCIPLE 6: Businesses should respect and make efforts to protect and restore the environment PRINCIPLE 7 Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent PRINCIPLE 8 Businesses should promote inclusive growth and equitable development PRINCIPLE 9 Businesses should engage with and provide value to their consumers in a responsible manner