Client Snapshot
In cases where businesses are required to prepare a Business Responsibility and Sustainability Report (BRSR) for the first time, the lack of any pre-existing process for collecting, validating, and documenting ESG data may result in increased chances of non-comparability and lack of auditability in terms of the disclosures made by the entity. An important step for achieving reliability, comparability, and auditability of ESG reporting is building an organized structure for the reporting in the form of indicators from the very first time.
The current case study involves a company operating in the service industry that had to prepare a BRSR for the very first time. The scope of the project included the preparation of Standard Operating Procedures (SOPs) for BRSR indicators in terms of environment, social, and governance criteria.
The Challenge
- Interpretation and implementation of complicated BRSR indicators from the three pillars, especially given the fact that the company does not have much experience with ESG reporting
- Many BRSR indicators were framed with a wider industry context in mind as a service sector company and needed careful interpretation to assess their relevance and applicability to the company’s own operations
- No centralized system of data ownership with lack of clearly defined roles, responsibilities, and procedures related to the gathering of ESG data
- Lack of documentation of ESG data gathering and verification procedures without visibility regarding how numbers have been arrived at
- Being a first-time reporter, the company lacked a common understanding across functional teams of what would qualify as reliable, auditable ESG data
- These factors collectively created a risk of inconsistent, non-auditable, and non-comparable disclosures in the company’s first BRSR filing
Our Approach
- Conducted an indicator-wise assessment of BRSR requirements to determine their relevance and applicability to the company’s service sector operations
- Developed indicator-wise SOPs aligned with BRSR requirements and methodologies, setting out the data source, calculation methodology, and reporting basis for each indicator
- Clearly defined data ownership, responsibilities, and reporting workflows for each indicator, establishing accountability across the relevant functional teams
- Standardized data collection, validation, and documentation processes, including common templates and formats to ensure uniformity across teams and comparability across future reporting cycles
- Embedded internal controls, including defined review and sign-off checkpoints from data capture through to consolidation, to ensure accuracy, consistency, and audit readiness
- Conducted handholding sessions with functional teams to build familiarity with the SOP-driven approach, given that this was the company’s first BRSR reporting cycle
Results Delivered
- Ensured that the company was able to file its very first BRSR report through the use of a solid SOP framework from an indicator perspective, despite being a first-time reporter
- Defined clarity and consistency of data and reporting ownership and roles and reduced reliance on personal knowledge
- Created structured documentation and evidence trails, improving audit readiness for the current and upcoming reporting cycles.
- Enhanced internal controls to improve the accuracy and consistency of ESG data reported across indicators
- Provided a scalable and repeatable framework for BRSR reporting to the company, reducing effort and risk in future reporting cycles
Impact
The engagement has been done in light of an issue that is commonly seen when a company starts reporting its BRSR for the first time, i.e., how to translate a sophisticated, indicator-based reporting into a robust and replicable process in an environment that lacks formal documentation practices and where data ownership is decentralized. By developing SOPs on an indicator-wise basis, establishing ownership of the data and reporting process, and building internal controls for each step of the process, the company laid a solid foundation to be able to report its ESG information in an accurate and audit-ready manner even during its first cycle of BRSR reporting.
