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Proposal for top 1,000 listed companies to adopt BRSR voluntarily for FY20-21

Proposal for top 1,000 listed companies

This issue of First Notes aim to provide an overview of the recommendations made by the MCA committee in its report and proposals made by SEBI in its consultation paper.

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Background

Currently, top 1,000 listed companies in India are required to furnish a Business Responsibility Report (BRR) to the stock exchanges as a part of their annual reports. The BRR should describe the initiatives taken by the listed companies from an Environmental, Social and Governance (ESG) perspective, in the format as specified by the Securities and Exchange Board of India (SEBI). Other listed companies may submit the BRR voluntarily.

The current version of BRR is based on the business responsibility and sustainability indicators contained in the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) issued in 2011 by the Ministry of Corporate Affairs (MCA). These guidelines were updated as the National Guidelines for Responsible Business Conduct (NGRBC) in 2019.

In 2018, while the NVGs were being updated, it was decided that the SEBI-BRR framework should also be revised to reflect the changes made in the base document. Accordingly, MCA constituted a committee for finalising revised BRR formats for listed and unlisted companies.

New development

On 11 August 2020, MCA has issued the report of the committee on BRR. In this report, the committee has prescribed new format for Business Responsibility and Sustainability Report (BRSR) and made recommendations relating to its implementation.

Basis recommendations of the committee, on 18 August 2020, SEBI has also issued a consultation paper and proposed that the BRSR format, as recommended by the committee, should be made applicable to top 1,000 listed companies by market capitalisation.

This issue of First Notes aim to provide an overview of the recommendations made by the MCA committee in its report and proposals made by SEBI in its consultation paper. 

To access the text of the report issued by MCA, please click here.

To access the text of the consultation paper issued by SEBI, please click here.

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