Companies modify BRSR questionnaire by adding or omitting information according to their discretion, shows CSE review
Photo for representation: iStock Delhi-based think tank Centre for Science and Environment (CSE) welcomed the Business Responsibility and Sustainability Reporting (BRSR) initiative by the Securities and Exchange Board of India (SEBI) to increase corporate transparency but identified significant gaps in the current reporting practices. CSE recommended several improvements to ensure the data provided is of higher quality and more useful for stakeholders.
SEBI introduced the BRSR framework in May 2021, mandating the top 1,000 listed companies in India to disclose non-financial data, including their efforts towards environmental stewardship, for the financial years 2021-22 and 2022-23. This initiative was intended to provide policymakers and investors with robust data to make informed decisions.
CSE’s new analysis Strengthening Environmental Reporting under BRSR scrutinised 28 reports from 14 of these top companies over two consecutive years. The review, led by Nivit Yadav, programme director of the industrial pollution research unit at CSE, highlighted areas where the current BRSR framework falls short in capturing comprehensive and useful environmental data.
One of the primary issues identified is the reliance on consolidated data, which can obscure the performance of individual units within a company. Shobhit Srivastava, deputy programme manager at CSE, argued that sustainability metrics should be unit-specific to effectively identify underperforming units and develop targeted improvement plans. The current format’s lack of contextual explanations for variations in reported data further complicates the understanding of underlying trends and issues.
Additionally, companies have been found to modify the BRSR questionnaire by adding or omitting information according to their discretion, leading to inconsistencies that undermine the comparability and reliability of the data. The classification of essential indicators, such as water usage and waste management, as voluntary rather than mandatory, is another significant shortcoming, flagged CSE experts. They suggested making these indicators mandatory to ensure comprehensive reporting.
To address these issues, CSE recommended adopting sector-specific reporting guidelines to provide more relevant and comparable data, aligning with international best practices and offering investors a clearer understanding of sustainability practices within specific industries.
The guidance document accompanying the BRSR framework also needs to be updated periodically to clarify reporting requirements, such as detailed instructions for reporting air emissions and waste management practices.
Standardising the reporting format is also crucial, the think tank stressed. It proposed that SEBI provide a protected spreadsheet template to prevent companies from altering the format, ensuring uniform data presentation and enhancing data reliability.
Detailed reporting on waste management is another area for improvement, according to CSE. SEBI should require separate reporting for hazardous and non-hazardous waste, including detailed disposal methods for different types of waste such as plastic, e-waste and biomedical waste.
Additionally, the authors of the review report advocated for making specific energy consumption and specific water consumption mandatory reporting metrics. This data, presented in standard units, would better reflect a company’s efficiency and resource management practices.
Yadav highlighted the importance of transparent environmental performance data for investor decision-making in an era where resource sustainability is increasingly critical. “Our goal is to strengthen the BRSR framework to ensure better quality reporting by companies. We hope SEBI will consider our recommendations in their next review to gather more meaningful data, beneficial for both investors and the broader goal of environmental sustainability.”
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