The Securities and Exchange Board of India (“SEBI”) has recently rolled out a Consultation Paper on Recommendations of the Expert Committee for Facilitating Ease of Doing Business with respect to Business Responsibility and Sustainability Report (“BRSR”).

Pursuant to the Budget Announcement, an Expert Committee was set up to review the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) and Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”) from the point of view of facilitating ease of doing business.

The Expert Committee has submitted a report containing recommendations with respect to BRSR. SEBI has sought comments / views / suggestions from the public and other stakeholders on recommendations of the Expert Committee by 12th June, 2024.

Summary of the proposals on BRSR:

1. Value Chain:
   1. To redefine value chain partners as “Value chain shall encompass the upstream and downstream partners of a listed entity, individually comprising 2% or more of the listed entity’s purchases / sales (by value) respectively.”
   2. An alternative proposal to redefine value chain partners as “Value chain shall encompass the upstream and downstream partners of a listed entity, individually comprising 2% or more of the listed entity’s purchases / sales (by value) respectively, and cumulatively comprising at least 75% of the listed entity’s purchases / sales (by value), respectively.”
   3. Additional Proposal: The listed entity must disclose the percentage of total sales and purchases covered by the value chain partners for which ESG disclosure are provided.

      This will bring down the maximum possible number of upstream/downstream value chain partners from 50 (in case of 2% threshold) to 38 (in case of 2% threshold with cut-off of 75%), hence enabling additional ease of doing business while still ensuring coverage of key value chain partners.

2. Green Credits:

 To add the following leadership indicator under BRSR:

1. How many Green Credits have been generated:
   1. By the company
   2. By the value chain partners

3. To substitute the term “assurance” with “assessment” in LODR Regulations and SEBI circulars on BRSR.

This will provide flexibility to listed entities to undertake either assessment (which is cost-effective and not burdensome) or assurance (which may be requested by investors/ clients of listed entities). The option of undertaking assessment rather than assurance of ESG data will facilitate ease of doing business.

The comments/ suggestions must be submitted latest by 12th June, 2024, through the following link:

https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?doPublicComments=yes

Please refer to the hyperlink for a detailed read of the Circular and the method of submitting comments.

Source: Securities and Exchange Board of India

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