Understanding SEBI's BRSR: The 9 Pillars and Their Environmental Impact

Authors:
Anuradha Damle
For more details, reach out to info@altometa.online

The Securities and Exchange Board of India (SEBI) introduced the Business Responsibility and Sustainability Reporting (BRSR) framework as part of its commitment to ensuring responsible business practices in India. The BRSR framework, mandatory for the top 1000 listed companies by market capitalization, aligns with global sustainability standards and reflects India’s commitment to achieving the United Nations Sustainable Development Goals (UN SDGs). The BRSR is built on nine pillars, each addressing a critical aspect of business responsibility and sustainability. This blog post will break down these pillars, discuss their environmental relevance, and explore how they relate to the UN SDGs. 

1. Ethics, Transparency, and Accountability

  • Goal: Promote ethical business practices and transparency in operations. 
  • Metrics: Code of conduct adherence, anti-corruption practices, risk management, and disclosure of material information. 
  • Environmental Impact: This pillar indirectly influences environmental outcomes by encouraging companies to disclose risks and practices related to environmental management. 
  • Industries Most Impacted: All industries, particularly those with significant environmental risks, like manufacturing and mining. 
  • Managing Metrics: Companies can manage these metrics by implementing strong governance structures, regular audits, and transparent reporting. 
  • UN SDG Relation: Aligns with SDG 16 (Peace, Justice, and Strong Institutions) by fostering transparency and reducing corruption. 

2. Product Lifecycle Sustainability

  • Goal: Ensure products are sustainable throughout their lifecycle, from production to disposal. 
  • Metrics: Resource efficiency, waste management, recycling rates, and product impact assessments. 
  • Environmental Impact: Directly reduces environmental footprint by encouraging sustainable design, production, and disposal practices. 
  • Industries Most Impacted: Manufacturing, consumer goods, electronics, and automotive industries. 
  • Managing Metrics: Companies can focus on eco-design, resource-efficient processes, and extended producer responsibility (EPR) initiatives. 
  • UN SDG Relation: Supports SDG 12 (Responsible Consumption and Production) by promoting sustainable production processes. 

3. Employee Well-being

  • Goal: Ensure fair labor practices, health and safety, and employee development. 
  • Metrics: Health and safety incidents, training hours, employee turnover, and diversity metrics. 
  • Environmental Impact: While this pillar focuses on social aspects, it indirectly impacts environmental outcomes by fostering a responsible corporate culture. 
  • Industries Most Impacted: Labor-intensive industries like construction, manufacturing, and mining. 
  • Managing Metrics: Companies can manage these metrics by adopting strong occupational health and safety (OHS) systems, diversity initiatives, and continuous employee development programs. 
  • UN SDG Relation: Linked to SDG 8 (Decent Work and Economic Growth) by promoting safe and secure working environments. 

4. Stakeholder Engagement

  • Goal: Engage stakeholders in business decisions, particularly those affected by the company’s operations. 
  • Metrics: Number of stakeholder engagements, grievance redressal mechanisms, and impact assessments. 
  • Environmental Impact: Promotes environmental stewardship by involving communities and other stakeholders in environmental decision-making. 
  • Industries Most Impacted: Industries with significant community impact, like energy, mining, and real estate. 
  • Managing Metrics: Companies can manage these metrics by implementing stakeholder engagement frameworks, regular communication channels, and addressing stakeholder concerns. 
  • UN SDG Relation: Connects with SDG 17 (Partnerships for the Goals) by encouraging collaboration with stakeholders. 

5. Human Rights

  • Goal: Respect and protect human rights in all business operations. 
  • Metrics: Human rights policies, due diligence processes, and incident reporting. 
  • Environmental Impact: Indirectly impacts the environment by ensuring that operations do not infringe on the rights to clean air, water, and land. 
  • Industries Most Impacted: Industries with complex supply chains, like textiles, agriculture, and mining. 
  • Managing Metrics: Companies can manage these metrics by conducting human rights impact assessments, implementing supplier codes of conduct, and ensuring compliance across the supply chain. 
  • UN SDG Relation: Supports SDG 10 (Reduced Inequalities) by promoting fair and just treatment of all individuals. 

6. Environmental Management

  • Goal: Minimize the environmental impact of business operations. 
  • Metrics: Greenhouse gas (GHG) emissions, energy consumption, water usage, and waste generation. 
  • Environmental Impact: Directly addresses environmental sustainability by focusing on reducing the negative impacts of business activities. 
  • Industries Most Impacted: Energy, manufacturing, mining, and agriculture industries. 
  • Managing Metrics: Companies can manage these metrics by adopting renewable energy sources, improving energy efficiency, and implementing waste reduction strategies. 
  • UN SDG Relation: Aligns with SDG 13 (Climate Action) and SDG 7 (Affordable and Clean Energy) by encouraging companies to reduce their carbon footprint. 

7. Public Policy Advocacy

  • Goal: Ensure responsible advocacy that aligns with public good and sustainability goals. 
  • Metrics: Contributions to policy development, participation in industry associations, and public statements on policy issues. 
  • Environmental Impact: Influences environmental policy and regulation by advocating for sustainable practices and policies. 
  • Industries Most Impacted: All industries, especially those heavily regulated, like energy, chemicals, and automotive. 
  • Managing Metrics: Companies can engage in responsible lobbying, participate in multi-stakeholder initiatives, and advocate for policies that support sustainability. 
  • UN SDG Relation: Relates to SDG 16 (Peace, Justice, and Strong Institutions) by promoting inclusive and transparent policy-making processes. 

8. Inclusive Growth and Equitable Development

  • Goal: Contribute to the economic and social development of the communities in which companies operate. 
  • Metrics: Community investments, social impact projects, and local employment generation. 
  • Environmental Impact: Supports sustainable community development by addressing environmental challenges in local areas. 
  • Industries Most Impacted: Extractive industries, agriculture, and infrastructure projects. 
  • Managing Metrics: Companies can focus on community engagement, impact assessments, and sustainable development projects that address local needs. 
  • UN SDG Relation: Tied to SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities) by contributing to economic and social development. 

9. Consumer Protection

  • Goal: Ensure the safety, fairness, and sustainability of products and services. 
  • Metrics: Product safety incidents, customer satisfaction scores, and responsible marketing practices. 
  • Environmental Impact: Encourages companies to offer sustainable and safe products, reducing environmental harm. 
  • Industries Most Impacted: Consumer goods, food and beverage, and pharmaceuticals. 
  • Managing Metrics: Companies can manage these metrics by adopting stringent quality control measures, transparent labeling, and responsible advertising practices. 
  • UN SDG Relation: Supports SDG 12 (Responsible Consumption and Production) by promoting consumer awareness and sustainable consumption. 

In each of the 9 pillars, the BRSR framework is structured into three main sections: Section A, Section B, and Section C. Each section serves a distinct purpose in assessing and reporting on a company’s sustainability and responsibility practices. Below we provide an overview of each section. 

Section A: General Disclosures 

  • Purpose: This section gathers basic information about the reporting company, including its business activities, ownership details, and products and services offered. 
  • Content:
    • Company Information: Includes the company’s name, address, sector, and registration details. 
    • Financial Details: Information about the company’s turnover, net worth, and profit/loss data. 
    • Ownership and Governance: Details on the company’s ownership structure, including information about the board of directors, their diversity, and policies on independence. 
    • Sustainability Policies: Overview of the company’s policies on environmental, social, and governance (ESG) aspects. 
  • Relevance: Provides a foundational understanding of the company’s operations, setting the context for more detailed sustainability disclosures in the subsequent sections. 

Section B: Management and Process Disclosures 

  • Purpose: Focuses on the company’s governance, management, and processes related to sustainability. It seeks to understand how the company integrates sustainability into its core business strategy. 
  • Content:
    • Policy and Management: Disclosures on the company’s policies related to ESG issues, including how these policies are implemented and monitored. 
    • Risk Management: Information on how the company identifies and manages risks related to ESG factors. 
    • Stakeholder Engagement: Details on how the company engages with various stakeholders, including employees, customers, suppliers, and communities. 
    • Supply Chain Management: Insights into how the company manages sustainability in its supply chain, including responsible sourcing practices. 
  • Relevance: Demonstrates the company’s commitment to sustainability at a strategic level and provides insights into its governance and risk management frameworks. 

Section C: Principle-wise Performance Disclosures 

  • Purpose: The most detailed section, this part focuses on the company’s performance against the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC), which align with the BRSR’s nine pillars. 
  • Content:
    • Principle-wise Metrics: Companies are required to report specific metrics and data related to each of the nine principles, such as environmental impact, employee well-being, stakeholder engagement, and product responsibility. 
    • Quantitative and Qualitative Data: Includes both quantitative data (e.g., energy consumption, emissions, waste management) and qualitative disclosures (e.g., descriptions of policies and initiatives). 
    • Compliance and Reporting: Information on how the company complies with national and international standards, as well as its performance trends over time. 
  • Relevance: Provides a comprehensive view of the company’s actual sustainability performance, allowing stakeholders to assess the effectiveness of the company’s sustainability initiatives and their alignment with global standards. 

Conclusion

The nine pillars of SEBI’s BRSR framework, together with details in the 3 sections A, B and C, is designed to foster a holistic approach to sustainability, emphasizing the importance of ethical practices, stakeholder engagement, and environmental stewardship. Each pillar aligns with the UN SDGs, ensuring that Indian companies contribute to global sustainability efforts while addressing local challenges. By focusing on these pillars, and the metrics and reporting practices for each of the 3 sections, companies can not only comply with regulatory requirements but also drive meaningful change in their industries and communities.