India consults on XBRL ESG disclosures
The Securities and Exchange Board of India (SEBI) is conducting a consultation into widening their environmental, social, and governance (ESG) disclosures with a new mandatory report.
SEBI’s Report of the Committee on Business Responsibility Reporting argues that with the increase in urgency of challenges such as climate change, it is crucial that the performance of a company is measured not only on the return to shareholders, but also on how it achieves its environmental, social, and good governance objectives.
As such, SEBI has proposed a new Business Responsibility and Sustainability Report (BRSR), which would be mandatory for the top 1000 listed entities (by market capitalisation) by 2021-2022. The new reporting framework is designed to be a comprehensive non-financial and sustainability reporting requirement.
Rather than selecting a pre-existing reporting framework, SEBI have developed their own set of disclosure requirements. The BRSR would be integrated within the existing MCA21 disclosure portal, and preferably be in XBRL format.
In the long-term, SEBI hopes these disclosures can be used to create a sustainability index which will help investors quickly assess the ESG credentials of an entity. Of course, such an index would be far more useful and comparable if SEBI expands on their preference for the data to be in XBRL, making it mandatory to report in structured data format.
Comments are welcome until 18 September.