It is the 21st century, and with modern industrialisation at its peak, the number of businesses is only growing. However, with rising industries and financial growth, the concern for the degrading environmental conditions is a top priority. This is one of the key reasons why the Securities and Exchange Board of India (SEBI) introduced the Business Responsibility and Sustainability Reporting (BRSR) for India’s top 1000 listed companies. This brings an evolutionary change to the 2012 SEBI’s Business Responsibility Report (BRR).
Along with the credible reporting for the government, this change allows businesses to showcase their ethical and legal rapport to new stakeholders and investors. In this article, we will dive deeper into understanding the BRSR and how you can use it to give your business a competitive edge over others.
What is BRSR?
Introduced by SEBI, the BRSR framework acts as a report card that highlights how companies operate beyond their finances. It takes into consideration the ethical and social responsibility of a business that is utilising nature and societal resources for profits. It features several main principles that can be divided into 9 respective categories:
| Principle | Description |
| Ethical Governance | Businesses should be run ethically with utmost transparency and accountability. |
| Product Lifestyle Sustainability | Every good and service provided by the businesses should be safe to use and contribute to sustainability. |
| Employee Wellbeing | Every business should promote the well-being of its employees, including people connected in its value chains. |
| Stakeholder Engagement | Businesses must respect the interests and be responsive to their stakeholders. |
| Human Rights | They should always respect and promote human rights. |
| Environmental Stewardship | Businesses should respect, protect, and make efforts to restore the environment. |
| Policy Advocacy | Engage in influencing public and regulatory policy responsibly. |
| Inclusive Growth | Businesses should promote inclusive growth and equitable development. |
| Customer Value | Businesses should engage in providing value to customers in a responsible manner. |
Why BRSR Matters For All Indian Businesses?
Embracing BRSR not only ensures a tick from the government but also brings in a wide range of strategic advantages for your businesses:
Future-Proof Against Regulatory Changes
SEBI’s focus on sustainability and human rights through BRSR reporting reflects the growing importance of ESG accountability. Early adoption of the BRSR framework allows you to:
- Stay ahead of the curve against other firms and stay out of compliance rushes.
- Save the hassle and cost of implementing the reports at the last minute.
- Ensure preparedness for broader ESG-related mandates..
According to SEBI’s circular dated December 20, 2024, ESG disclosures for the value chain have been deferred by one year and will now apply from the financial year 2025–26. Early preparation still provides an advantage and ensures smooth transitions once mandates take effect.
Access to New Investors and Market
A proper BRSR report ensures high accountability and responsible governance. These qualities are sought by both domestic and international investors. For instance, investors aligned with the UN Principles for Responsible Investment (UN-PRI) prioritise companies that maintain robust ESG disclosure frameworks like BRSR.
The BRSR also aligns with the global reporting frameworks such as GRI, SASB, and TCFD, opening opportunities for global funding and partnerships.
Better Risk Management
BRSR helps companies embed sustainability into their risk management. Early identification of environmental and social risks reduces compliance issues, supply chain disruptions, and reputational damage.
It also enables faster adaptation to policy changes—whether in climate regulations, waste management, or labour laws. This ensures smooth operations and business continuity even in uncertain conditions.
Builds Customer Trust
A well-structured and transparent BRSR report will ensure trust and loyalty in the minds of customers. It reinforces brand integrity by.
- Demonstrating commitment to ethical and sustainable practices.
- Positioning the company as a responsible market leader.
When customers see verified ESG efforts, they are more likely to support and stay loyal to the brand.
Better Accountability and Innovation
By adhering to SEBI BRSR guidelines, companies gain a structured system for internal transparency and accountability. It encourages:
- Sustainable innovation like the use of biodegradable packaging.
- Operational efficiency, as external reviews highlight areas for improvement.
- Differentiation in the market, where ESG-driven innovation becomes a unique selling proposition.
What Happens If You Do Not Comply With SEBI’s BRSR?
While the report brings a range of strategic advantages to your doorstep, non-compliance can come with some harmful consequences.
Penalties and Fines
If your business qualifies under the top 1000 Indian businesses and other eligibility criteria, you must consider BRSR reporting. Non-compliance can result in regular penalties and fines from the SEBI.
Stock Exchange Flag
Non-compliant companies can be flagged by the SEBI or other investors as a red flag, which can hinder your reputation. Plus, it can deter investors and stakeholders from putting funds in your firm.
Brand Image
Along with a red mark on the SEBI, every day, customers may feel distrust towards your brand name. This decline in reputation and trust can directly affect your sales and revenues.
Future Obligations
SEBI may have further regulations in the near future that can create extra pressure on your business reporting. This may create a backlog and require drastic measures in a short period.
Organisational Setbacks
Non-compliance with BRSR can open a can of worms for your firm with operational setbacks and inefficient production. It can cause internal fragmentation in the business and lead to major issues.
Wrapping Up
Business Responsibility and Sustainability Reporting (BRSR) is a responsible step issued by the SEBI to govern the ethical and sustainable practices of businesses. It may seem like an extra process for your business, but this can be a game-changer for your market position. Early compliance can improve investor trust, brand image, and accountability for your business.
