BRSR Series. Part 1: Who Needs to File BRSR?

In the rapidly evolving landscape of corporate sustainability, the Business Responsibility and Sustainability Report (BRSR) has emerged as a cornerstone of transparency for Indian listed entities. As mandates tighten, understanding the applicability of these regulations is critical for compliance and strategic positioning.

This article, the first in our BRSR Series, breaks down the eligibility criteria for mandatory filing, voluntary adoption, and the conditions for cessation under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Mandatory Applicability: The Top 1,000

Under Regulation 34(2)(f) of the SEBI LODR, the requirement to file a BRSR is mandatory for the top 1,000 listed companies ranked by market capitalization.

• The Benchmark: Rankings are determined based on the average market capitalization calculated between July 1st and December 31st of each year.

• Publication: Stock exchanges publish this list on December 31st annually, serving as the official benchmark for the upcoming reporting obligations.

  
  

Understanding the "Grace Period" for New Entrants

SEBI provides a structured grace period for companies entering the top 1,000 list for the first time, ensuring they have the necessary runway to establish robust data collection systems.

Example Scenario:

• December 31, 2024: A company enters the top 1,000 list for the first time.

• April 1, 2025: Applicability triggers after a three-month period.

• FY 2025-26: Reporting commences from this financial year. Notably, there is no mandatory reporting requirement for the preceding FY 2024-25.

This window is essential for organizations to build the systems, processes, and internal controls required for high-quality sustainability reporting.

Voluntary Reporting: Building ESG Credibility

For companies outside the mandatory threshold, voluntarily opting into BRSR reporting is a powerful strategic move. By choosing to disclose, organizations can:

• Build ESG Credibility: Demonstrate transparency and commitment to sustainability.

• Attract Responsible Investors: Align with the growing global demand for ethically managed, sustainable portfolios, including ESG-focused mutual funds.

• Future-Proof Compliance: Establish internal reporting frameworks early, preparing the organization for potential future regulatory shifts.

Cessation of Reporting

Regulations also provide clarity on when a company may cease reporting if it falls below the mandatory threshold.

If a company remains outside the top 1,000 list for three consecutive years, the obligation to file a BRSR ceases at the end of the financial year following the December 31st of the third consecutive year.

Example Scenario:

• If a company remains outside the top 1,000 list on December 31, 2026, 2027, and 2028, it is still obligated to report for the third consecutive year (FY 2028-29) and the subsequent financial year (FY 2029-30).

• The company would be exempt from BRSR reporting requirements starting from FY 2030-31.

Stay Tuned

Navigating regulatory compliance is the first step toward effective sustainability management. This post marks the beginning of our BRSR Series, where Esgity Advisors will simplify the complexities of reporting, one post at a time.

Next up: We will dive into the technicalities of BRSR Core Audits.

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Disclaimer: This article is intended for informational purposes based on the provided SEBI guidelines and does not constitute formal legal advice. For tailored compliance strategies, consult with our team at Esgity Advisors at info@esgityadvisors.com.