Client Snapshot
As India’s regulatory landscape for sustainability disclosures matures, companies within the top 1,000 listed entities by market capitalisation continue to strengthen their BRSR reporting and assurance processes year on year. For many organisations, this is no longer a first-time compliance exercise, but an ongoing effort to enhance the quality, consistency, and system-readiness of the underlying non-financial data that supports these disclosures.
This case study relates to a manufacturing company on which BRSR Core assurance is applicable. The company’s operations are spread across multiple manufacturing locations, with non-financial data relating to energy, water, waste, and other BRSR Core parameters being captured and maintained largely through Excel-based spreadsheets at each location, rather than through a single integrated system.
The Challenge
- Operations spread across multiple locations, with data relevant to the BRSR Core indicators being compiled and maintained through Excel spreadsheets at each location, rather than through a centralised system
- No complete or seamless integration between the company’s financial and non-financial data systems; while partial integration existed between certain modules, full integration of the two systems was still a work in progress and expected to take further time to implement
- This is not unique to the company, currently, across industry, there is generally very limited or no integration between finance and non-finance data systems in most companies. However, companies, including this one, are now increasingly strengthening this integration by working towards bringing the two systems closer together
- Reliance on spreadsheet-based, location-wise data compilation, in the absence of complete system integration, increased the inherent risk of manual error and inconsistency in the underlying non-financial data
Our Approach
- Obtained and reviewed the Standard Operating Procedures (SOPs) shared by the client, setting out the process followed for capturing, compiling, and computing each BRSR Core indicator at every location
- Obtained the reconciliations prepared by the finance team, mapping the non-financial data reported (energy, water, waste, and other parameters) to the corresponding audited financial data, general ledger, and expense heads
- Evaluated the design and consistent operation of these SOPs and reconciliations across locations, to assess whether the processes followed provided a reliable basis for reporting in the absence of complete system integration
- Through review of the client’s SOPs and the finance-to-non-finance reconciliations, obtained comfort on the completeness, accuracy, and other relevant audit assertions relating to the BRSR Core indicators
- Performed sample-based testing at select locations to corroborate the non-financial data reported through the SOP-driven, spreadsheet-based process
- Discussed with management the ongoing initiatives towards integrating the financial and non-financial data systems, and the roadmap and timelines for achieving complete integration
Results Delivered
- Provided independent assurance over the company’s BRSR Core disclosures across multiple locations, notwithstanding continued reliance on Excel-based data compilation and only partial system integration
- Obtained comfort on completeness, accuracy, and other relevant audit assertions through a combination of SOP review and finance-non-finance reconciliations, in the absence of full system integration
- Enabled the company to further streamline its documentation and reconciliation processes for BRSR Core reporting
- Highlighted the continuing need for, and benefits of, closer integration between financial and non-financial data systems to reduce manual dependency in future reporting cycles
Impact
The engagement reflects a challenge common to many companies at present: very limited or no integration typically exists between finance and non-finance data systems, with non-financial information often maintained separately in spreadsheets across locations. By relying on client-provided SOPs and finance-to-non-finance reconciliations, the assurance team was able to obtain comfort on completeness, accuracy, and other relevant audit assertions, despite this partial integration. Encouragingly, companies, including this one, are now increasingly investing in strengthening the integration between their financial and non-financial systems, which is expected to reduce manual effort and further improve the reliability of BRSR Core reporting in future years.
