FY23 BRSR reports of Nifty 50 companies and NEXT 50 listed companies analysed to assess the maturity of ESG regulations in India.

51% of India’s top 100 listed companies by market capitalisation disclosed their Scope 3 data for FY23 despite it being a voluntary disclosure in Business Responsibility and Sustainability Reporting (BRSR) as per the PwC India report titled, “Navigating India’s Transition to Sustainability Reporting.” This sheds light on how Indian businesses are taking a step further in ESG reporting as Scope 3 emissions are crucial to understand an entity’s net zero journey. Scope 3 spans 15 different categories in total. Those that are upstream include emissions produced by the external parties that source, produce and transport the raw materials and components businesses use. Other upstream categories include business travel and employee commuting as well as emissions from waste generated and assets leased. On the downstream side are emissions from the logistics, use and disposal of the company’s products. Downstream emissions also cover those from activities like investing and franchising.

A key regulatory development for mainstreaming ESG in India is the introduction of the BRSR which was introduced by SEBI in May 2021 as a replacement for the Business Responsibility Report (BRR). The BRSR framework has taken references from many global reporting frameworks such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD). The report analyses the publicly accessible BRSR reports of top 100 companies (Nifty 50 companies and NEXT 50 listed companies) and their response to the regulatory requirement of mandatory reporting under the BRSR for the financial year ended 31 March 2023 (FY23).

Sambitosh Mohapatra, Partner & Leader, ESG, PwC India, said, “With the BRSR becoming a mandatory report for businesses, ESG considerations have become key strategic priorities in boardroom discussions. This is a testimony of the enhanced awareness of the importance of sustainability and responsible business practices. ”

Sumit Seth, Chartered Accountant, said, “The introduction of the BRSR marks a pivotal shift towards a transparent, more inclusive, and globally harmonised reporting framework in India. The framework empowers investors and other stakeholders to make informed decisions about the sustainability performance of the company.”

ESG reporting through the BRSR has ushered in greater transparency and a holistic view of a business’s environmental and societal impact, thus, enabling investors and other stakeholders to form key decisions through an ESG lens, make comparisons across companies and sectors, and track progress over time.

Key highlights:

• 51 out of 100 companies analysed disclosed their Scope 3 data for FY23
• 44% of the top 100 listed companies conducted the life-cycle assessment of their products or services
• 89% of the companies disclosed their information on leadership indicators
• 34% of the companies have reduced their Scope 1 emissions and 29% have reduced their Scope 2 emissions
• 49% of companies have increased their energy consumption from renewable sources
• 31% of companies have disclosed their net-zero targets

For present-day enterprises, reducing GHG emissions is not just an environmental necessity, but also an economic and social imperative to create a sustainable and resilient future. Furthermore, GHG reduction can also bring economic benefits such as energy efficiency, reduced healthcare costs and the creation of green jobs in the clean energy sector. The analysis of top 100 listed companies hinted towards a sincere attempt to reduce their carbon footprint. As per the published data/information, it was noted that 34 of the 100 companies demonstrated a reduction in their Scope 1 emissions and 29 companies have managed to reduce their Scope 2 emissions. The key initiatives which led to a reduction in emissions include, transitioning to energy-efficient technologies such as LEDs, adopting efficient air conditioning, ventilation, and heating systems, shifting to renewable sources for securing energy needs, purchasing carbon offsets, and entering into off-site power purchase agreements.

The way in which the ESG landscape is evolving in India and how businesses are responding to the developments demonstrates the increasing focus on sustainability. The shift in focus is also underpinned by rapid development and enhancement of regulations in this field. As a result, it is vital for companies to thoroughly assess their existing ESG guidelines, processes, control and data management mechanisms, and continue to upgrade them in a timely manner to ensure the quality and consistency of ESG performance reporting.

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As India commits to achieve its net zero vision by 2070, the business sector is being viewed as a critical enabler in furthering this ambition. The government and the regulators have introduced new regulations pertaining to ESG for businesses. India’s transition to BRSR Core positions the nation as a frontrunner in the global transition towards a more credible and transparent sustainability reporting landscape.