ESG has gone mainstream. It’s high time we get it right.

It’s no secret that ESG has gained traction in board meetings and investor due diligence for quite some time now. Despite ESG going mainstream, companies often struggle to get their reporting right. SEBI has recently announced BRSR Core - a subset of the broader Business Responsibility and Sustainability Report (BRSR) to change this.

Specifically tailored for listed companies, BRSR Core aims to ensure the credibility of non-financial disclosures and strengthen the reporting ecosystem in India. This subset focuses on nine Key Performance Indicators (KPIs) about ESG assurances and is planned to be rolled out in phases.

BRSR Core indicates a tidal change and a sign of maturation of the Indian ESG landscape. Leaving very little wiggle room for data interpretations and misleading jargon, BRSR Core - through its Key Performance Indicators - aims to incorporate transparent and quantifiable matrices on disclosures that reflect sustainability outcomes. What are these KPIs?

Key Performance Indicators

The BRSR Core represents a subset of the comprehensive BRSR framework and includes a specific set of key performance indicators (KPIs) / metrics across nine ESG attributes. Let’s have a closer look at these KPIs and their parameters.

1. Greenhouse gas (GHG) footprint

   • Total Scope 1 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, if available)

   • Total Scope 2 emissions (Break-up of the GHG (CO2e) into CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, if available)

   • GHG Emission Intensity (Scope 1 +2)

2. Water footprint

   • Total water consumption

   • Water consumption intensity

   • Water discharge by destination and levels of treatment

3. Energy footprint

   • Total energy consumed

   • Energy intensity

4. Circularity and waste management

   • Specified types of waste – plastic, e-waste, bio-medical, construction and demolition, battery, radioactive, and other hazardous waste generated

   • Total waste generated

   • Waste intensity

   • Each category of waste generated, total waste recovered through recycling, re-using or other recovery operations

   • For each category of waste generated, the total trash disposed by nature of the disposal method

5. Employee well-being and safety

   • Spending on measures towards the well-being of employees and workers – cost incurred as a % of the total revenue of the company

   • Details of safety-related incidents for employees and workers (including contract workforce, e.g., workers in the company’s construction sites)

6. Gender diversity

   • Complaints on POSH (sexual harassment)

   • Gross wages paid to females as % of salary paid

7. Inclusive development

   • Input material sourced from the following sources as % of total purchases: Directly sourced from MSMEs/ small producers and from within India

   • Job creation in smaller towns – Wages paid to persons employed in smaller cities (permanent or non-permanent /on contract) as % of total wage cost

8. Customer and supplier engagement

   • Instances involving loss/breach of data of customers as a percentage of total data breaches or cyber security events

   • Number of days of accounts payable

9. Openness of business

   • The concentration of purchases & sales done with trading houses, dealers, and related parties loans and, advances & investments with related parties

Emphasis on Value Chain

BRSR mandates listed companies include value chain disclosures as part of their Annual Report. For this purpose, the value chain should encompass the listed entity's top upstream and downstream partners, comprising 75% of its purchases/sales (by value).

Listed entities need to report the KPIs in the BRSR Core for their value chain as well, to the extent it is attributable to their business with that value chain partner. Such reporting may be segregated for upstream and downstream partners or reported aggregately.

Challenges and Easy Solutions

Limited supply chain visibility poses one of the biggest challenges for listed enterprises mandated to comply with BRSR Core. When partners can’t report their impact, enterprises are left in the dark, but with new KPIs in place, companies can no longer get away with it. Companies must adopt concrete processes with their value chain partners from the ground up.

Lack of technology tools, ESG subject matter expertise, and lack of budgets are often the most significant bottlenecks for SMBs to report on their ESG KPIs. Tech-enabled data automation and insightful analytics can help SMB partners gain visibility into their ESG KPIs and the extent of the impact. This, in turn, helps their large global customers improve their ESG reporting & compliance.

Conclusion

Introducing the BRSR Core is a welcome step that will strengthen stakeholders’ confidence and bring more transparency and accountability to ESG disclosures. At the same time, this compels companies to address the ESG data visibility gaps within their value chains. Enterprises can no longer merely tick boxes; they must report cold, hard numbers. The need for streamlining ESG reporting has never been higher in India.

How Treeni Can Help

Treeni’s resustain™ SMB is a SaaS-based platform that can help listed entities roll out ready-to-use reporting platforms to all their value chain partners and streamline the value chain compliance. resustain™ SMB is designed for SMB suppliers and jumpstarts their ESG journey with data management, automation and transformation, insightful analytics, and reporting to improve their ESG compliance.

Ask for a resustain™ SMB demo

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