The committee constituted by the Ministry of Corporate Affairs (MCA) has recommended two separate formats for companies to file business responsibility reports.
The panel, in its report, has also recommended that the formats be called 'Business Responsibility and Sustainability Report (BRSR)' instead of only 'Business Responsibility Report', to convey more accurately the thrust on sustainability as well as business responsibility.
"On the basis of the various principles upon which the Committee agreed, two BRSR formats are proposed along with guidance notes. One is a comprehensive format, and the other, a 'Lite' version," it said.
The structure of the proposed BRSR frameworks would have three sections - 'General Disclosures', 'Management and Process' and 'Principle-wise Performance'.
The objective of the 'General Disclosures' section is to obtain basic information about the company -- size, location, products, number of employees, CSR activities among others.
In the 'Management and Process' section, the company is required to disclose information on policies and processes relating to the National Guidelines on Responsible Business Conduct (NGRBC) concerning leadership, governance, and stakeholder engagement. Wherever relevant, companies have been asked to provide links to their websites where these policies are available, the report said.
Further, responses to the third section indicate how a company is performing in respect of each principle and core element of the NGRBC. This section requires companies to demonstrate their intent and commitment to responsible business conduct through actions and outcomes.
The 'Report of the Committee on Business Responsibility' said that the committee recognised that at present, only the top 500 listed companies have the experience of business responsibility reporting.
Other companies may thus be unfamiliar with any form of sustainability reporting and the proposed BRSR would perhaps be their first effort at developing a sustainability report.
"Therefore, a pared-down Lite version of the BRSR format has been proposed, to make it easier for all companies to begin reporting on sustainability reporting related issues. This again has the essential and leadership category of questions, but fewer in number, and seeks information which such companies should be able to provide," it said.
The implementation of reporting requirements should be done in phases so that smaller companies have the time to adapt and learn from the larger ones, as per the panel.
It has recommended that with regard to listed entities, reporting may be done by the top 1,000 listed companies, as per market capitalisation.
"Prior to implementing the reporting requirements for listed entities, SEBI may also adopt the due process of consultation. The reporting requirement may be extended by MCA to unlisted companies above a specified threshold of turnover or paid-up capital," the report said.
The committee has also recommended that smaller unlisted companies below the threshold may, to begin with, adopt the Lite version of the format, on a voluntary basis.