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  • Nankee Arora

BRSR 2022: India’s Ideal Intersection for Business, Human Rights and Sustainability?

[Nankee Arora is a student at Jindal Global Law School.]

The trend of environmental, social and governance (ESG) reporting has gained popularity globally, and India has followed suit by introducing the Business Responsibility and Sustainability Report 2022 (BRSR) through the Securities and Exchange Board of India (SEBI). The ESG requirements are based on the National Guidelines on Responsible Business Conduct (NGRBC) which were formulated in India in line with the sustainable development goals (SDGs) which account for both human rights and sustainability. By requiring corporations to look at not only how ESG parameters affect their financial growth but also how their activities impact ESG factors, frameworks such as BRSR, in theory, have the ability to drive corporations to strike a balance between economic growth and sustainable development thereby creating an intersection between human rights, business and sustainability. This article analyses the aspects of BRSR that make it a more or less ideal intersection for business, human rights and sustainability and then proceeds to make recommendations on how the identified challenges may be overcome to realise the potential of ESG reporting frameworks to influence corporate conscience in India.

Foundations of BRSR and What It Deems Material

The BRSR is based on the NGBRC, which in turn is based on the SDGs. The SDGs integrate human rights and sustainability concerns[1] across 17 Goals, accounting for economic, social, and governance factors.[2] While on paper, the logical conclusion is that human rights and sustainability are accounted for in the BRSR by basing it upon SDGs but this analysis of the BRSR would be ignorant of the inherent faults in the SDGs. Some critics argue that the SDGs were developed without sufficient participation and input from civil society, particularly from marginalized and vulnerable communities. This has led to concerns that the goals may not adequately address the needs of these communities. The SDGs were made by the powerful, developed Western countries and thus do not factor the local issues and factors that lead to human rights and sustainability concerns in India and the solutions needed to overcome them. The BRSR is praised for benchmarking to international ESG frameworks such as the ‘Global Reporting Initiative’ and the ‘Sustainability Accounting Standards Board.’ The critique that is given for the SDGs can also be directed towards the reliance placed on these other international reporting standards in the creation of the BRSR. Therefore, the use of the international frameworks alone as the bedrock of the BRSR cannot be said to be an ideal intersection of business with human rights and sustainability in the Indian context. The BRSR however, consciously or unconsciously attempts to overcome this lacuna in the fundamental considerations of the BRSR by including the proprietary ESG model developed by stakeholder empowerment services (SES), India. It is a home grown model that accounts for factors of local relevance in the reporting requirements. The requirements under the SES ESG model, however are voluntary and may not have the desired effect unless

Whether or not BRSR is an ideal intersection between business, human rights and sustainability can also be determined based on what the framework considers ‘material’. Materiality is a concept that is used in investing to determine what factors would influence the decision of an investor to invest in the stock of a company. The BRSR is a consultative tool that involves engaging with and incorporating feedback from external stakeholder groups. By doing so, it helps companies identify and address potential human rights and environmental risks associated with their operations. As a result, companies can take specific, proactive and direct measures to mitigate these risks and operate in a more sustainable and socially responsible manner. The potential for collaboration between the company, civil society, human rights and environmental groups allows companies to identify specific, localized issues and address them directly, either through internal policy changes or CSR. This ensures that the reformative efforts undertaken by the company in accordance with the BRSR are not general and unorganised but rather specifically directed to those directly affected by the operations of the company, both within and outside India. This vision is not implicit in the BRSR, rather it is explicitly stated in ‘object’ clause that accompanies each disclosure, showing a clear intent on the part of the creators of the framework to make human rights and sustainability goals integral to the framework. Another added layer of protection, that makes the framework ideal, is the requirement in the framework that companies must also report on the strategies they have undertaken, so an external stakeholder evaluating their BRSR can gauge the degree to which the company has considered affected stakeholder groups and included their feedback in internal policy.

Upon the first view, it may seem as though the businesses will be at a major disadvantage, having to make heavy investments in fulfilling the ESG requirements. However, research shows that companies with a high ESG rating are more likely to be financially successful. It is likely that this is the result of a shifting consumer consciousness to sustainability and human rights concerns. Therefore, when a company showcases, that it is integrating these concerns into its operations and decision-making, that too through statutorily approved disclosure mechanisms, it generates a lot of goodwill and recognition from consumers in the market. Thus, reporting frameworks such as BRSR truly have the capability to meet not only human rights and sustainability goals but also the fulfil the primary goal of a business, that is, profit.

Enforcement, Implementation and Transparency

As identified above, the structure and formulation of the BRSR clearly reflect an attempt to find an intersection between human rights, sustainability and business. While in theory, an intersection is suggested but whether or not it is implemented in practice is contingent upon the extent to which companies have to comply with the disclosure requirements and the manner in which they have to disclose the data.

The most glaring issue is the division of the disclosure requirements into essential and voluntary. Most of the requirements fall under the ‘voluntary’ category therefore rendering the intersectional vision of the BRSR only a concept in theory. This division is made worse by its capacity to allow firms to produce inconsistent and incomplete data about their activities. For instance, whether or not human rights requirements form part of a firm’s business contracts is a mandatory requirement but whether any human rights due diligence was undertaken is voluntary, thereby producing inconsistent information on how the company identifies human rights risks and further incorporates them into its contracts.

Even the requirements that are mandatory are required to be reported in a more quantitative than qualitative manner. A lot of the requirements are framed in a ‘yes or no’ format. This even applies to questions such as ‘do human rights requirements form part of your business agreements and contracts? (Yes/No).’ Companies are not required to elaborate on the specific aspects of their policy thereby leaving the stakeholder unable to draw comparisons between the policies or even evaluate whether the policy of an individual company is appropriate, effective, and inclusive. What is worse is that while there are some parameters that must be appraised and disclosed with specific metrics, such as greenhouse gas emissions, these too are unreliable. The lack of reliability is attributed to the fact that this data is not verified by any independent statutory authority. While companies are allowed to get their data verified by an external agency, these, too, are unverified. Therefore, companies are not deterred from publishing false and / or manipulated data.

The outcome of a framework that is ideal in theory but is easily manipulated and evaded in practice, is a framework that is setting itself up for greenwashing. However, it can be speculated that this effect is exactly what the Indian government intended, that is, to globally present itself as a country that is contributing to the evolving ESG framework while ensuring that such a framework does not hamper the ease of doing business in India. Therefore, both the government and the businesses are extracting the goodwill and recognition that comes with being ESG-friendly without any intention to internalize an ESG conscience thereby fundamentally failing to be an intersection between business, human rights and sustainability.

Looking Forward

Frameworks such as the BRSR will only become ideal intersections when they will have the capacity to transform business conscience. In its current form external stakeholders using the BRSR to evaluate the ESG-friendliness of the company must be extremely wary of the accuracy of the information reported and treat ‘ESG ratings’ or ‘ESG scores’ given to the company by external, independent organisations on the basis of its BRSR report. An ideal situation would be that the government implements the BRSR very strictly and independently verifies the information reported, but as mentioned above, the government is not economically incentivized to fundamentally shift its attitude towards ESGs, just yet. The only way for the BRSR or any other reporting framework to have the effect of transforming business conscience is the way any and all change has been brought about in the dialogue of human rights and sustainability, and that is, pressure from the consumers and the community. These stakeholders will have to actively reveal the lapses in the BRSR and publish their findings to the public to generate pressure on businesses and the government to create more effective frameworks.


The requirements of the BRSR are framed in such a way that they have the potential to influence companies to incorporate respect for human rights and sustainability into their core business strategies. It is often said that sustainability is a market incentive, and if one wants it to be bought, one needs to sell it well, and in its current form, with its lax requirements, lack of transparency and unreliable forms of measurement, that is all the BRSR does. Only when external stakeholders such as consumers and the community unveil the defects in the BRSR and pressurize the government to independently evaluate the information in the BRSR, is there scope for the BRSR to be an ideal intersection between business, human rights and sustainability.

[1] See SDG Goal 1 that aims to end poverty in all its forms, including ensuring access to basic needs such as food, water, and sanitation. This is critical for the realization of human rights, such as the right to an adequate standard of living. [2] See SDG Goal 7 that aims to ensure access to affordable, reliable, sustainable, and modern energy for all, which is essential for economic development, environmental sustainability, and the realization of many human rights, including the right to education, health, and a clean environment.

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