The disclosures recommended in the business responsibility and sustainability report are intended to enable companies to engage more meaningfully with their stakeholders, and encourage them to go beyond regulatory financial compliance and report on their social and environmental impacts, Sebi noted in its consultation paper.
The comments can be sent latest by September 18, 2010, it added.
Sebi further said listed entities may adopt the new format on a voluntary basis for the financial year 2020-21. For entities that choose not to adopt the new format, the existing format will apply.
However, from the financial year 2021-22, the new format would be mandatory.
In November 2018, the Ministry of Corporate Affairs constituted a committee for finalising business responsibility reporting formats for listedÂ andÂ unlistedÂ companies, based on the framework of the National Guidelines on Responsible Business Conduct (NGRBCs).
National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) were released as NGRBCs in March 2019 after aligning with emerging global concerns, sustainable development goals and United Nations’ guiding principles on business and human rights.
Sebi was also part of the committee and the report was released on August 11, 2020.
The committee recommended that the business responsibility report be called the business responsibility and sustainability report (BRSR).
The philosophy of responsible business is based on the principle of business being accountable to all its stakeholders towards global developments which are increasingly seeking firms to be responsible and sustainable towards their environment and society, Sebi said.
“The performance of a company must be measured not only on the return to shareholders, but also on how it achieves its environmental, social, and good governance objectives.
“Therefore, globally there is a growing recognition and emphasis on stakeholder model of governance amongst all stakeholders including institutional investors,” the regulator noted.
In a 77-page consultation paper, Sebi has given a detailed format of the proposed BRSR.
The report is divided into three sections– section A (general disclosures), section B (management and process disclosures) and section C (principle wise performance disclosure).
Regarding the principle wise performance disclosure, Sebi said the information sought in this section is categorised as “essential” and “leadership”.
“While the essential level is expected from every business that has adopted these guidelines, the leadership level is expected of businesses which aspire to progress to a higher level in their quest to be socially, environmentally and ethically responsible,” it said.
The regulator has listed nine principles in this section, including integrity, sustainability, human rights and environmental concerns.