The disclosures and communication of environmental, social, and governance (ESG) goals is known as sustainability reporting. An organization’s material non-financial performance information, including Environmental, Social, and Governance (ESG) problems, is reported in asustainability report. Producing a sustainability report is a vital initial step in executing a plan that can assist a company in setting goals, measuring performance, managing sustainability-related impacts and risks, and understanding how it generates value for its stakeholders.

Improvedbusiness reputation, more consumer confidence, increased innovation, and even better risk management are all advantages of sustainability reporting. Multiple market changes, as well as increased regulatory and legal scrutiny, indicate that sustainability reporting’s transparency and accuracy are becoming increasingly vital. In addition to NGOs and consumers,regulators and investors are increasingly demanding that a comprehensive sustainability assessment be communicated, as well as the management of associated risks and opportunities. A growing number of firm’s business partners now require a clear statement of intent and an articulation of the company’s sustainability performance.

Voluntary Guidelines related to Sustainable Environment Reporting under SEBI and Other Laws

The Ministry of Corporate Affairs (MCA) established the Committee onBusiness Responsibility Reporting (the Committee) in November 2018 to finalise business responsibility reporting forms for listed and unlisted firms based on the NGRBC framework. The Committee recommended that BRR be renamed Business Responsibility and Sustainability Report (BRSR), with disclosures based on ESG parameters, compelling organisations to engage holistically with stakeholders and go beyond regulatory compliances in terms of business measures and reporting, in itsReport of the Committee on Business Responsibility Reporting (the Committee Report). From FY2022–23, reporting will be mandatory for the top 1,000 listed businesses (by market capitalization), while disclosure will be voluntary in FY2021–22. As a result, the Committee Submit invites enterprises to report their FY2021–22 performance in order to be better equipped to use this framework in the following fiscal year. 

As per SEBI’scircular, entities are already compiling and disclosing sustainability reports based on internationally accepted reporting standards, according to SEBI’s circular.

Such listed entities who produce and publishsustainability reports (as part of their annual report) based on internationally recognised reporting frameworks can compare the disclosures made under those frameworks to the disclosures sought under the BRSR. In addition, if the data requested in the reporting format is already available in the annual report, the listed organisation can give a cross-reference.

Thus, an entity need not disclose the same information twice in the annual report. However, the entity should specifically mention the page number of the annual report or sustainability report where the information sought under the BRSR format is disclosed as part of the report prepared based on the internationally accepted reporting framework. The BRSR seeks disclosure of the reporting boundary i.e. whether the reporting is done for the entity on a stand-alone or consolidated basis. Listed entities shall ensure consistency in reporting boundaries across the report. Some of the disclosures sought under the BRSR may not be applicable to certain industries, say the service industry. In such cases, the entity can state that such disclosure is not applicable along with reasons for the same.

In 2012,SEBI mandated SEBI mandated that the top 100 listed businesses by market capitalization publish Business Responsibility Reports (BRRs) as part of their annual report in 2012, as required by the ‘National Voluntary Guidelines on Social, Environmental, and Economic Responsibilities of Business’ (NVGs). In 2015, the top 500 listed entities by market capitalization were required to file BRRs, and in 2019, the top 1000 listed entities were required to file BRRs. The UN Sustainable Development Goals (SDGs), Paris Agreement on Climate Change, and United Nations Guiding Principles for Business and Human Rights (UNGPs), often known as the NVGs, were created to keep up with global advancements.

Following that, MCA formed the Committee on Business Responsibility Reporting (‘Committee’), which included SEBI, to finalise BRR formats for listed and unlisted firms based on the NGRBCs framework. The Committee formulated its suggestions in light of recent worldwide trends that call for businesses to be more responsible and sustainable toward their environment and society, as well as for investors to place a greater emphasis on sustainability investing. To better represent the totality of thereporting obligations, the Committee suggested that the Business Responsibility Report be renamed the Business Responsibility and Sustainability Report (‘BRSR’).

The Committee’s recommended BRSR is organised around disclosures based on the NGRBCs’ nine principles, as well as a guidance note to help corporations assess the scope of disclosures under each concept. Each of the nine principles’ disclosure requirements are broken into two sections: essential (required) and leadership (voluntary).

The advising letter that comes with the BRSR additionally clarifies the following. Entities that prepare sustainability reports based on internationally accepted reporting frameworks may provide a cross-referencing of the disclosures made under such framework while making the relevant disclosures sought under the BRSR format to address concerns about duplication of information reporting. A cross-reference may be performed if any information is already published in the annual report. Because the BRSR format is generic and does not seek sector-specific data, some of the disclosures may be irrelevant to companies in certain industries. Entities may state in such instances that the disclosure is not applicable to them along with reasons for the same.

Under the BRSR, listed companies must disclose an assessment of their material ESG (environmental, social, and governance) risks and opportunities, as well as their approach to minimising or adapting to those risks, as well as the financial consequences of such risks. In addition, the report must include goals and targets linked to sustainability, as well as performance against them. Information on resource consumption (energy and water), air pollutant emissions, greenhouse gas (GHG) emissions, the transition to a circular economy, waste created and waste management techniques and biodiversity are all included in theenvironmental disclosures.

Social disclosures would involve labour, the value chain, communities, and consumers. Gender and socioeconomic diversity indicators are compulsory disclosures, as are turnover rates, median pay, welfare benefits to permanent and contractual employees/workers, occupational health and safety, and training. Listed entities will be expected to provide community-level Social Impact Assessment statements (SIA), rehabilitation and resettlement, and corporate social responsibility, among other things. Listed firms must report product labeling, product recalls, and consumer complaints in the case of consumers.

Critical Analysis of Guidelines on Sustainability Reporting

The requirement forlisted firms to file a BRR with ESG disclosures was initially established in 2012, and since then, a lot of changes have occurred. Adapting to and mitigating climate change impacts, as well as transitioning to sustainable economies, have arisen as key worldwide concerns since the passage of the Paris Agreement on climate change and the UN Sustainable Development Goals, according to the regulator. The epidemic has also heightened the importance of environmental, social, and governance (ESG) factors for investors, resulting in increased investor awareness and a shift toward sustainable investing. The surge in new ESG-themed mutual fund launches and asset growth of such schemes reflects this trend.

Reliance and Tata Power are some of the top power sector companies to be included in the 1000 companies listed by SEBI in which Torrent Power Limited and Adani Power Limited are included as well.

AsESG investing becomes more mainstream, disclosure requirements must evolve to keep up, and the BRSR is an important step in that regard. The BRSR effort is aimed at ensuring that investors have access to standardised ESG disclosures. Investors will be able to detect and assess sustainability-related risks and opportunities of companies and make better investment decisions if they have access to relevant and comparable data. Companies will also be able to better explain theirsustainability aims, position, and performance, leading to the creation of long-term value. Overall, stronger ESG disclosure and transparency norms will aid in a more sustainable future. The reporting requirements come after the board of SEBI has approved a proposal.

Building Resilience through Renewable Energy and Decentralization

IndianDecentralised Renewable Energy (DRE) sector, like others, was impacted by the unprecedented Covid-19 pandemic. While DRE enterprises continue to grapple with the situation, they have also shown resilience.

In the months that followed, many DRE enterprises innovated products and services to combat the crisis, especially in healthcare. There is now a need for a conducive policy environment, understanding the needs of these rural communities to create available workforce opportunities andinnovation in technologies.

Renewables have gradually begun to find a foothold in India’s energy supply over the last decade, bolstered by the government’s high renewable energy target of175 GW by 2022. Contributing to this target are decentralized renewable energy (DRE) installations which constitute stand-alone or mini grid-sized installations that provide electricity supply to houses. As they are modular, cost-effective, less susceptible to breakdowns, and easier to maintain, these systems are increasingly being adopted in rural areas in India, and globally. They help to ensure the undisrupted usage of medical equipment, to improve the access to water and sanitation. These could also help farmers access irrigation and reduce post-harvest losses via cold storage which could improve rural livelihoods.

A new WRI report delves into these implications for decentralized solar installations specifically in climate-vulnerable areas. Through case studies in three Indian states, it explores how development needs and climate change impacts must be considered by implementers, vendors, and end-users while designing, implementing, and maintaining decentralized solar installations. These are thefive takeaways from the report:

1. Climate change can affect electricity demand. Renewable energy can supply it.

2. Decentralized solar systems can help solve risk-prone grid systems — but they are not entirely climate-proof.

3. Effective decentralized solar solutions seated in climate-vulnerable regions must be tailor-made for local conditions.

4. Technology is one of the components of a climate-resilient solar installation.

5. Resilience planning should ideally start prior to the design stage and continue even after installation.

The solar sector relies heavily on imports. As a result, with manufacturers operating outside of the Indian government’s regulatory framework, implementing certain requirements, statutory laws, and EPR (Extended Producer Responsibility) becomes difficult. The Ministry of Environment, Forestry, and Climate Change (MoEFCC) and the Ministry of New and Renewable Energy (MNRE) are taking the first steps toward resolving the problem. Approved Models and Manufacturers of Solar Photovoltaic Modules is a list of models and manufacturers that MNRE has approved (ALMM). This model’s explicit goal is to go above quality and provide dependability.

It also ensures that PV modules are recycled in an environmentally appropriate manner. The ALMM order gives photovoltaic (PV) module makers more control and sets a regulated framework. Only the specified manufacturers are permitted to participate in government-related projects, according to the ALMM regulation. MNRE has guaranteed that the manufacturers are protected by a regulatory framework. Contractual, legislative, and socio-environmental duties can now be enforced. Extended Producer Responsibility will be imposed under the paradigm on manufacturers, akin to e-waste like mobile phones, laptops, and more.

Solar PV panels are not included by theIndian E-Waste Rules of 2016, which implies that retired panels are handled by the unorganised sector with low recovery rates. A producer-financed compliance fee or a consumer-financed end-of-life fee can be utilised to develop a feasible financial model for establishing a formal recycling ecosystem. Manufacturers will be held to Extended Producer Responsibility (EPR) under this concept, similar to how e-waste is handled. Implementing a legislativeframework for voluntary or mandatory Extended Producer Responsibility for renewable energy equipment, in which the industry sets its objectives through a five-year management plan is of utmost importance

Creating a distinct EPR legislation for PV modules from the E-Waste Guidelines is advocated rather than adapting rules from the E-Waste Rules legislation because PV technology, which is outside the scope of the E-Waste Rules, will become the cornerstone of the energy transition. As a result, EPR should be included in the report, particularly for solar enterprises.

Other Corporate Governance Requirements

NTPC and other government-owned companies issue a Corporate Governance Report under Regulation 27 of SEBI LODR. As per theRegulation 27:

1. The listed entity may comply with the requirements set out in Part E of Schedule II at its discretion.

2. Within fifteen days of the quarter’s end, the listed firm must submit:

  • A quarterly compliance report on corporate governance in the format determined by the Board from time to time to the recognised stock exchange(s).
  • Along with the report referred to in clause (a) of sub-regulation, any material transactions with linked parties must be disclosed (2).

The compliance officer or the chief executive officer of the listed entity must sign the report referred to in clause (a) of sub-regulation (2). 

The notification for Environmental Statement in Form V was published on 28 Apr 1992 by MoEFCC. Every Industry was compelled to submit Environmental Statement for the financial year ending to the concerned State Pollution Control Board. The process in Environmental Statement included filling up Form V and submitting it to the Pollution Control Board which has a total of nine sections.

In the Environmental Statement every industry needs to provide information on production, consumption of raw, water, pollutants discharged in the environment, solid and hazardous waste along with their treatment processes. It is more detailed and comprehensive coverage of environmental sustainability than the Report.

Important parameters to be reported to the Pollution Control Board are:

  • If a company is reusing its by-products or waste material, resulting in a reduction in air, water, or energy consumption, this should be reported to the Pollution Control Board.
  • The cost of production
  • Additional investment recommendations for environmental protection, such as process upgrades, process improvements, or new equipment to reduce pollution.

ISO 14001 will help with sustainability reporting since it offers asystematic approach to environmental management and suggests ways to manage business risk in order to demonstrate a high degree of environmental commitment. This allows organisations to respond to the wants and requirements of those who are interested. More efficient resource usage, decreased negative environmental effects, better compliance with regulatory requirements, and improved customer interactions are all business benefits of a codified environmental management system (EMS).

The goal of thisInternational Standard is to provide a framework for organisations to safeguard the environment and respond to changing environmental conditions while keeping socio-economic requirements in mind. It lays forth the conditions that a business must meet in order to fulfill the goals it sets for its environmental management system.

A systematic approach to environmental management can provide top management with data to help them build long-term success and create options for contributing to sustainable development by:

  • Preventing or minimising negative environmental consequences
  • Mitigating the potential negative impact of environmental conditions on the organisation
  • Aiding the organisation in meeting compliance duties
  • Improving environmental performance

Essential elements of the SEBIBRSR released in May 2021 are included in PRINCIPLE 2 which requires businesses to provide goods and services in a manner that is sustainable and safe.

Essential Indicators are listed as:

  • The percentage of R&D and capital expenditure (capex) investments in specific technologies to enhance the environmental and social consequences of products and processes relative to the entity’s total R&D and capex spending.
  • To review if the organisation has policies in place to ensure sustainable sourcing? (If so, what percentage of inputs were sustainably sourced?) To detail the procedures in place to securely reclaim your products for reuse, recycling, and disposal at the end of their useful lives, including (a) plastics (including packaging), (b) e-waste, (c) hazardous waste, and (d) other garbage.
  • Whether Extended Producer Responsibility (EPR) applies to the entity’s activities (if so, whether the trash collection plan corresponds to the Extended Producer Responsibility (EPR) plan submitted to Pollution Control Boards. If not, take actions to rectify the situation).
  • If the company performed Life Cycle Assessments (LCA) for any of its products (for the manufacturing industry) or services (for service industry). If you answered yes, you must give information in a structured style.
  • Recycled or reused input material as a percentage of total input material (by value) utilised in manufacturing or providing services (for service industry).
  • If the e-waste recycled items and packaging the amount (in metric tonnes) reused, recycled, and safely disposed of products and packaging reclaimed at end of life should be expressed in a prescribed format.

The other relevant provision is PRINCIPLE 6 which requires businesses to respect and make efforts to protect and restore the environment.

Also, turnover of products and/ services as a percentage of turnover from all products/services that carry information about to be specified and as a percentage to total turnover the Environmental and social parameters relevant to the product to be given. Improved technology is encouraged and is not explicitly stated but is expected to be conformed with. Air pollution monitoring, wastewater discharge, and waste management have been covered in the above details which are required to be filled in by companies.


Many organisations lack a formal system and hence miss out on the advantages of higher formality. Long-term success and sustainable growth can be achieved with a methodical approach to environmental management. This includes environmental protection, mitigating the potential negative effects of environmental conditions on organisations, assisting with compliance obligations, improving environmental performance, preventing environmental impacts from being unintentionally shifted elsewhere within the life cycle while achieving financial and operational benefits.

With the Reserve Bank of India joining theNetwork for Greening of Financial Systems earlier this year, which is a global group of Central Banks and Supervisors assisting institutions in mobilising funds towards the transition to a sustainable economy, companies, particularly those that are reliant on fossil fuels, will have to be aware of their financing needs in the future. RBI is also a member of the Basel Committee on Banking Supervision’sTask Force on Climate-related Financial Risks (TFCR), which was constituted in February 2020. The funding alternatives for Indian enterprises would have to be realigned towards the end goal with this new approach and push on green finance.

About the Authors  

Prof. [Dr.] Sairam Bhat is a Professor of Law at NLSIU Bangalore, and a Coordinator at the Centre for Environment Law, Education, Research and Advocacy, (CEERA) National Law School of India University (NLSIU), Bangalore.

Srishti Tripathi is a Third Year Law Student at Government Law College, Mumbai.

Ms. Madhubanti Sadhya is a Teaching Associate at the National Law School of India University (NLSIU), Bangalore and is a faculty member for the Post Graduate Diploma in Environmental Law, NLSIU.

Editorial Team 

Managing Editor: Naman Anand   

Editors-in-Chief: Akanksha Goel & Aakaansha Arya   

Senior Editor: Aakaansha Arya

Associate Editor: Srishti Tripathi

Junior Editor: Swetha Somu

Preferred Method of Citation 

Sairam Bhat, Srishti Tripathi and Madhubanti Sadhya, “Business Sustainability of Power Sector Companies in India” (IJPIEL, 15 October 2021).  


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