India’s New ESG Reporting Standards and Rules in 2024
Unlocking the ESG Reporting Disclosure in India. Today, sustainability is not only a choice; it is a necessity that drives various company decisions. In India, ESG (Environmental, Social, and Governance) regulations have been gaining traction to promote sustainable and responsible business practices. Understanding this landscape is important for stakeholders throughout the business data ecosystem.
The Business Responsibility and Sustainability Reporting (BRSR) regulation by the Securities and Exchange Board of India (SEBI) mandates ESG disclosure in PDF and XBRL format by the top 1,000 listed companies in India. The following blog uncovers the key insights into ESG disclosures from these 1,000 reports for the financial year 2022-23. Read on to find out.
An Overview of the ESG Reporting in India – Insights
The report delves into various insightful areas that may interest various stakeholder groups. These are as follows:
1. Material Risks and Opportunities:
Various aspects are covered under material risks and opportunities identified by Indian companies. These may include climate change, health and safety, energy management, data privacy and security, etc.
The analysis identifies major focus areas for risk management and sustainability activities, as well as insights suited to specific sectors. These findings benefit corporations, investors, and rating agencies by providing an industry-wide perspective for benchmarking and enabling peer alignment.
2. Environmental Intensity Measures:
It is focused on tracking and disclosing emissions, energy, water, biodiversity, and waste parameters.
The analysis shows that sectors like financials, services, technology, and communications have lower emissions intensity due to their operational characteristics. Further exploration reveals that the services, extractives, and food and beverage sectors have lower energy intensity. This suggests either reduced energy use or higher earnings relative to energy consumption. Interestingly, the healthcare sector has the highest water intensity.
3. Workplace and Diversity:
The woman participation in the workplace is 18%, but this percentage can differ among various industries and roles. Industries that rely on manual labour, such as infrastructure, have lower female representation. On the other hand, service-oriented sectors, such as technology and communications, have higher gender diversity.
4. BRSR Assurance:
It includes a set of metrics indicating Key Performance Indicators (KPIs) for the emerging market. It identifies areas like job creation in small towns, gross wages for women, and business openness.
These were mandated starting from the financial year 2023-24. As a result, little voluntary information is available for the year 2022-23. This insight can be particularly beneficial to investors, rating agencies, regulators, and policymakers.
5. CapEx and R&D:
The BRSR asks for data on the portion of Capital Expenditures (CapEx) and R&D investments in technologies that enhance the environmental and social impacts of processes and products.
The analysis shows that big companies are beginning to spend on environmental and social impacts, but this decreases with mid-sized and small firms. Additionally, service industries like finance, healthcare, and tech have shown no spending in these areas, unlike their manufacturing counterparts, who appear more committed.
Takeaway
XBRL, a machine-readable format, can streamline ESG reporting for Indian companies. As opposed to error-prone PDF reports, XBRL allows stakeholders to uncover meaningful insights from business reports. It helps them identify trends and patterns within the data. The ESG disclosures can help comply with the stakeholder’s demand for more transparency and accountability.
If you are new to ESG reporting and need a reliable partner, DataTracks can be your best bet. Our experts are experienced in BRSR reporting (ESG reporting for NSE-listed companies) in India. We can help prepare timely reports that are free from errors and comply with SEBI regulations. To learn more about the services we offer, you can contact our team at enquiry@datatracks.in or call +91 7305074307.
