Consider the following statements:
I. The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).
II. In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.
Which of the statements given above is/are correct?
[A] I only
[B] II only
[C] Both I and II
[D] Neither I nor II
Answer
Correct Option: [B] II only ✅
- Statement I is incorrect: It is not the Reserve Bank of India but the Securities and Exchange Board of India (SEBI) which mandates BRSR submission. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the top 1,000 listed companies in India (by market capitalisation) must file the BRSR annually.
- Statement II is correct: The BRSR is primarily a non-financial disclosure framework, covering Environmental, Social, and Governance (ESG) parameters.
Business Responsibility and Sustainability Report (BRSR)
A Business Responsibility and Sustainability Report is an annual disclosure where companies report how responsibly they operate in terms of Environment, Social responsibility, and Governance (ESG).
- Introduced by SEBI in 2021–22 (mandatory from FY 2022–23 onwards).
- It evolved from earlier Business Responsibility Reports (BRR).
- Provides transparency for stakeholders (investors, employees, consumers, regulators).
- You can quote BRSR in GS 4 Business Ethics
National Guidelines for Responsible Business Conduct (NGRBC)
- Prepared by the Ministry of Corporate Affairs (MCA) with help of the Indian Institute of Corporate Affairs (IICA) in 2019.
- Inspired by United Nations Guiding Principles (UNGPs).
- Focus: businesses must act ethically, sustainably, and responsibly.
- BRSR report is based on the guidelines of NGRBC
United Nations Guiding Principles (2011) rest on three pillars:
- State’s duty to protect human rights
- Corporate responsibility to respect human rights
- Access to remedies for violations
Components of a BRSR
A BRSR broadly follows the Triple Bottom Line: People, Planet, Profit.
| Component | What it Covers | Example Disclosure |
|---|---|---|
| Environmental | Resource use, emissions, waste | Energy use, water use, carbon footprint |
| Social | Employees, community, consumers | Workforce diversity, wages, safety, CSR work |
| Governance | Ethics, transparency, compliance | Anti-bribery policy, risk management, board practices |
Nine Principles of BRSR (NGRBC)
📌 Mnemonic: “ETHICAL SAFE GROWTH” (E–Ethics, S–Safety, G–Growth, H–Human rights, C–Consumers, E–Environment, P–Policy, I–Inclusiveness, S–Stakeholders).
- Businesses should conduct and govern themselves with integrity, ethics, transparency, and accountability.
- Provide goods and services sustainably and safely.
- Promote the well-being of all employees, including in value chains.
- Respect interests of stakeholders.
- Respect and promote human rights.
- Protect and restore the environment.
- Engage responsibly in policy and regulation.
- Promote inclusive growth and equitable development.
- Provide value to consumers in a responsible manner.
Environmental, Social and Governance (ESG) in Simple Words
- Environmental: How business impacts nature (pollution, waste, resources).
- Social: How it impacts people (workers, customers, community).
- Governance: How it is managed (ethics, transparency, anti-corruption).
👉 Think of ESG as the “Good Citizen Test” for companies.
Indian Institute of Corporate Affairs (IICA)
- Established: 2008 (under Ministry of Corporate Affairs) – Another Possible Question of Ministry
- Nature: Autonomous institute + Think Tank.
- Functions: Research, training, policy support on corporate governance and CSR.
- Helped MCA draft the NGRBC (2019).
Practice Prelims Questions
Q1. Which institution mandates the top 1,000 listed companies in India to file a Business Responsibility and Sustainability Report (BRSR)?
[A] Reserve Bank of India
[B] Securities and Exchange Board of India
[C] Ministry of Corporate Affairs
[D] Department of Revenue
✅ Answer: [B] Securities and Exchange Board of India
Q2. Which of the following is not a part of Environmental, Social, and Governance (ESG) factors?
[A] Workforce diversity
[B] Air emissions
[C] Corporate bribery policies
[D] Dividend payout ratio
✅ Answer: [D] Dividend payout ratio (It is a financial disclosure, not ESG).
Also See: Sources of Income of RBI: UPSC Prelims 2025 Question 2
Also See: Alternative Investment Funds
Also See: Key Government Directorates under Department of Revenue
FAQs on BRSR
Q1. Is BRSR mandatory for all companies in India?
No. Only the top 1,000 listed companies by market capitalisation are mandated by SEBI to submit BRSR. Others may file voluntarily.
Q2. How is BRSR different from financial reporting?
Financial reports cover profit, loss, assets, and liabilities, whereas BRSR covers non-financial aspects like sustainability, ethics, and social impact.
Q3. Does BRSR replace Corporate Social Responsibility (CSR) reporting?
No. CSR reporting is about spending 2% of profits on social causes (as per Companies Act, 2013). BRSR is about overall business responsibility and sustainability practices.
Q4. Is BRSR linked to global frameworks?
Yes, it aligns with frameworks like Global Reporting Initiative (GRI) and United Nations Sustainable Development Goals (SDGs).
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