Business Responsibility Report under SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015
The Business Responsibility Report has been outlined as a tool to help companies understand the principles and core elements of responsible business practices and start implementing improvements which reflect their adoption in the manner the company undertakes its business.
SEBI vide Notification no. SEBI/LAD-NRO/GN/2015-16/013 dated 2nd September, 2015, initiated the SEBI (LODR) Regulation, 2015 which necessitates the top hundred listed entities which are calculated as on March 31 of every financial year based on market capitalization to submit Business Responsibility Report as part of their Annual Report as per the format prescribed in the aforesaid Regulation. The said Notification also mentions other listed entities to disclose on a voluntarily basis the Business Responsibility Reports as part of their Annual Reports. The provisions of this Notification shall come into force on the ninetieth day from the date of their Publication in the Official Gazette.
With reference to Regulation 34(2)(f) read with Regulation 101(2) of SEBI (LODR) Regulations, 2015, SEBI on November 4, 2015 issued a circular CIR/CFD/CMD/10/2015 wherein a suggested format of Business Responsibility Report in Annexure I & Annexure II has been prescribed which is equivalent to the format prescribed vide circular CIR/CFD/DIL/8/2012 dated 13th August, 2012 issued under Clause 55 of Equity Listing Agreement.
The aforesaid Regulation discusses Annual Report and its contents wherein sub-regulation (2) clause (f) specifies the mandatory disclosure of Business Responsibility Report of the top hundred listed entities based on market capitalization, as part of the Annual Report. The regulation also suggests voluntary disclosure of Business Responsibility Report as part of Annual Report to the listed entities other than top 100 listed companies based on market capitalization and also to listed entities which have listed their specified securities on SME Exchange
The format prescribed in Annexure I & Annexure II circular CIR/CFD/CMD/10/2015 dated November 4, 2015 contains the following key particulars:
Annexure I – SUGGESTED FORMAT FOR BUSINESS RESPONSIBILITY REPORT
Section A – General Information about the company
Section B – Financial Details of the Company
Section C – Other Details
Section D – BR Information
Section E – Principle – wise Performance (Principle – wise Performance further contains Principle 1 to Principle 9)
Annexure II – PRINCIPLES TO ASSESS COMPLIANCE WITH ENVIRONMENTAL, SOCIAL AND GOVERNANCE NORMS
Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
Principle 3: Businesses should promote the wellbeing of all employees
Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized
Principle 5: Businesses should respect and promote human rights
Principle 6: Business should respect, protect, and make efforts to restore the environment
Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner
Principle 8: Businesses should support inclusive growth and equitable development
Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible manner
Though there have been no changes made in the format or the contents of Business Responsibility Report, the new format shall be effective from 90 days of the notification, i.e. on and from 2nd December, 2015.
(Author Benaz M Kerawalla is an Executive at Vinod Kothari & Co. and can be reached at [email protected])