Sustainability & Evolution of Sustainability Reporting in India - An Introduction
CA. Vivek Shah
2nd December 2022
The industrial revolution in Europe
resulted in the widespread exploitation of natural resources such as timber and minerals,
and the removal of vegetation for new settlements in the conquered colonies.
The mechanization and high consumption also resulted in higher levels of pollution.
The environmental concerns from resource exploitation gave rise to the concept of sustaining
life on earth. The International Union for the Conservation of Nature (IUCN) published a
World Conservation Strategy in 1980 that introduced the term “Sustainable Development” and
referred to it as a global priority. Subsequently, the report “Our Common Future
(commonly known as Brundtland Report)” was released by the United Nations World
Commission on Environment and Development in 1987 that gave the popular definition of
“Sustainable development is the
development that meets the needs of the present without compromising the ability of future
generations to meet their own needs.”
It contains within it two key concepts:
The concept of 'needs', in particular, the essential needs of the world's poor, to which
should be given
The idea of limitations imposed by the state of technology and social organisation on the environment's
to meet present and future needs.
Traditionally, the organizations considered that economic growth and socio-environmental parameters are mutually
exclusive, and hence, economic growth was the only thing that organizations used to disclose. The chemical
manufacturing companies started publishing environmental reports in the 1980s as a means of image building, and the
tobacco processing industries followed suit in an attempt to attract investment. This disclosure of corporate
information developed into non-financial reporting such as Sustainability Reporting in the last 20 years as a means
of demonstrating accountability and transparency to the stakeholders.
Globally, there is an increase in awareness and activism amongst stakeholders who are
demanding business accountability for the social and environmental impacts on issues such as climate change,
gender equality, environmental degradation, etc. Sustainability Reporting is an emerging discipline encompassing
the disclosure and communication of an entity's non-financial - Environmental, Social, and Governance (ESG)
performance and its overall impact. Over the last few years, more and more entities have started preparing and
disclosing their sustainability reports either under a mandate or voluntarily as per the reporting frameworks/
standards provided by standard-setting bodies/ regulators.
Through sustainability reporting, companies communicate their performance and impacts on a wide range of
sustainability topics spanning ESG parameters. It enables companies to be more transparent about the risks and
opportunities they face, giving stakeholders greater insight into performance beyond the bottom line.
As companies across the world increasingly embrace sustainability reporting, a number of standards have emerged that
enable a wide range of stakeholders to more effectively assess and compare sustainability reports. India is one of
the early adopters of sustainability reporting for listed entities amongst its various other global peers. In 2012,
requirement of Business Responsibility Report (BRR) containing ESG disclosures was introduced for adoption by the
listed entities. Recently, in May 2021, SEBI has introduced new reporting requirement called the Business
Responsibility and Sustainability Report (BRSR) with the intent towards having quantitative, qualitative and
standardized disclosures on ESG parameters.
Sustainability Reporting - Meaning
As per the definition of the Global Reporting Initiative (GRI), “Sustainability Reporting is an overview of a
company's economic, environmental, and social impacts, caused by its everyday activities”. This is not
presenting the data collected, but an approach to drive an organization's commitment to sustainability, and
demonstrate it to the interested parties in a transparent manner. It is intended to assist the organisations to
assess, measure, analyse and present their performance in economic, social, environmental, and governance
parameters, with an objective of setting challenging targets and goals.
Sustainability Reporting - Purpose & Objectives
Increases understanding of risks and opportunities.
Emphasizes the link between financial and non-financial performance.
Influences long-term management strategy, policy and business plan.
Streamlines processes, reducing costs and improving efficiency.
Benchmarks and assesses sustainability performance with respect to laws, norms, codes, performance standards and
Helps companies avoid publicized environmental, social and governance failures.
Enables the comparison of performance internally and between organizations and sectors.
Mitigating negative environmental, social and governance impacts, improving reputation and brand loyalty.
Enabling external stakeholders to understand the organization's true value, along with tangible and
Demonstrating how the organization influences and is influenced by expectations about sustainable development.
The NGRBCs ‐ The Indian Context
There was no India specific corporate framework, either voluntary or mandatory, relating to sustainable development
till 2011, when the Ministry of Corporate Affairs (MCA) released the National Voluntary Guidelines (NVG). They were
based on the triple bottom line principle of sustainability(People, Planet, Profits) andare specific to the Indian
It had nine elements namely ethics, transparency and accountability, product life-cycle
sustainability, employee well-being, stakeholder engagement, human rights, environment, policy advocacy,
inclusive growth and equitable development, and value to customers and consumers.
The Securities and Exchange Board of India (SEBI) mandated that the organisations release an annual report on
their Business Responsibility in line with the NVGs.
The 9 Principles of the NGRBCs
Based on the NVGs, the reporting format for Sustainability Reporting was developed on the concepts/ principles
promulgated by the National Guidelines for Responsible Business Conduct (NGRBCs). The following are the principles
of the NGRBCs -
Businesses should conduct and govern themselves with integrity, and in a manner that is ethical, transparent and
Businesses should provide goods and services in a manner that is sustainable and safe.
Businesses should respect and promote the well-being of all employees, including those in their value chains.
Businesses should respect the interests of and be responsive to all their stakeholders.
Businesses should respect and promote human rights.
Businesses should respect and make efforts to protect and restore the environment
Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible
Businesses should promote inclusive growth and equitable development.
Businesses should engage with and provide value to their consumers in a responsible manner.
MCA'S Committee recommendation and SEBI circular on Business Responsibility and sustainability Reporting (BRSR)
Timeline of evolution
July 2011- MCA releases National Voluntary Guidelines (NVGs)
August 2012- SEBI circular for the top 100 listed companies to disclose BRR in line with NVG
2015- United Nations Sustainable Development Goals 2030 is released
2015-16- The applicability of BRR extended to the top 500 listed companies
March 2019- MCA revised the NVGs to National Guidelines on Responsible Business Conduct (NGRBC)
December 2019- The applicability of BRR extended to the top 1,000 listed companies
August 2020- MCA report on BRR with the proposed BRSR
On 10th May, 2021- SEBI Circular (No.SEBI/HO/ CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021)on BRSR by Listed Entities.
The committee came out with a recommended format for the reporting called as 'Business Responsibility and
Sustainability Report (BRSR)”. Two formats are proposed for the BRSR along with separate guidance note for
them. The format with a wider coverage version called BRSR Comprehensive for the listed organisations, and smaller
version called BRSR Lite for the non-listed organisations. The structure of the new format has three sections A, B
General DisclosuresĖ This section covers the general information and basic details of the organisation such as,
scale, size, sector, products, employee strength, CSR activities, etc. It also covers the organisation's
near the environmentally fragile and sensitive areas, protected zones, socially critical areas.
Management and Process - This section covers the commitment of the organisation to the business responsibility by
seeking the information related to the governance system, policies, procedures, and processes they have in place to
address their responsibilities in line with the NGRBC principles. This provides an insight into the managerial
infrastructure the organisation has to drive business responsibly.
Principle-wise performance - This section requires the organisation to disclose how they perform with respect to
each of the nine Principles and Core Elements of the NGRBCs. The organisation will have to demonstrate objectively
how they will meet the commitment to responsible business conduct. The information required in the section can be
provided as two categories depending on the extent of the organisation's ambition towards sustainability as
essential and leadership. They can report as either of the two.
The bare minimum the organisation has to do in terms of responsible business conduct
The voluntary things taken up by the organisation that are beyond the basic essential things.
Glimpses of Supreme Court Rulings
Order passed by the High Court is without considering the perspective and scope of issuance of the certificate for
deduction of tax at lower rate or no deduction at tax and also without following the prescribed procedure. The High
Court has wrongly distinguished the previous judgement on the premises which is not tenable, and relied upon
undertaking dated 22.06.2019 of appellant submitted perforce. After due consideration view High Court has committed
error in dismissing the writ petition; therefore, we am unable to concur the opinion of the esteemed sister Judge.
Summary & Conclusion
It has been a long history for the concept of sustainability with the rising concerns over human induced climate
change and damage to ecosystems since the mid-1970s till recent times where there has been codification of
Sustainability Reporting formats and rising concerns over the ESG impacts of how organizations function. This
history has been replete with controversies over climate change at various political and economic forums. The
process of evolution of Sustainability Reporting in India reflects the fact that now governments all over the world
are taking sustainability related risks very seriously with the corresponding rising concerns over the impacts of
climate change and related risks that the society at large faces for the years and decades to come.
Sustainability reporting is an evolving concept that is in its nascent stages in India at present. Financial
Reporting underwent a long process of development from till its present mature form. Likewise, Sustainability
Reporting is evolving, developing and with regulatory and reporting frameworks widening and sustainability issues
becoming broad based, pervasive and assuming criticality in strategic managerial decision making.ESG Reporting is
bound to assume a pivotal role in decision making for all stakeholders.
In part 1 of this series, we covered above the concept of sustainability with its background, context and evolution
of Sustainability Reporting in India. In the next part we will endeavour to have ahigh-level perspective of
sustainability risks in decision making by various stakeholders.