 Introduction

Imagine our planet as a spaceship. It has limited resources and a delicate balance.
Sustainability means using those resources wisely so that future generations can also enjoy
them. It's about taking care of the environment, people, the economy.
Institute relied on three pillars of independence, integrity and excellence for the profession so
far & 2024 may be the fourth one, as sustainability becomes the important part.
With the consequences of climate change and social inequality, the demand for transparency
and accountability in business practices has never been greater. As consumers, investors, and
regulators scrutinize corporate actions' environmental and social impacts, sustainability
reporting emerges as a crucial tool. It's no longer enough for companies to simply declare
their commitment to sustainability; they must demonstrate it through detailed, credible, and
accessible reports. This transformation in corporate accountability signals a profound shift in
how businesses operate and interact with the world. The evolution of sustainability reporting
is a testament to the growing imperative for businesses to sustain not only their economic
performance but also their ethical and environmental footprint.
In 2015, UN setup 17 sustainable development goals which further adopted by 193 countries.
And our mission is to achieve this goal by 2030.

You know when I was in High school we were taught about only one “P” i.e. profit. But now
it’s profit, people, and planet. Here ESG comes into picture, i.e planet, people and profit
  What is ESG reporting?
This acronym stands for Environment, Social and Governance criteria commonly referred to
as series of standards used by socially and environmentally conscious investors to evaluate
and screen potential investment. Sometime this bill is called sustainability accounting.
Developing ESG strategies and ESG reporting begin with understanding of business & how
money flows, nature of Business operation & finance will determine ESG measures are the
most relevant to it & how company will implement it. Because “Accountant can speak
language of business” and chief executive business council for sustainable development and
he made the statement“Accountants can save the world”.
Environmental:
The environmental pillar of ESG focuses on a company’s impact on the natural environment.
It involves evaluating factors such as the company’s resource usage, carbon emissions, waste
management, pollution control, and efforts towards environmental conservation. Assessing a
company’s environmental performance helps identify its commitment to sustainable practices
and its efforts to mitigate any negative impact on the ecosystem.
Social:
The social pillar of ESG addresses a company’s relationship with its stakeholders, including
employees, customers, communities, and society at large. It considers factors such as
employee welfare, labor practices, diversity and inclusion, customer satisfaction, product
safety, community engagement, and philanthropy. Evaluating a company’s social
performance helps determine its commitment to ethical conduct, social responsibility, and
fostering positive relationships with its stakeholders.
Governance:
The governance pillar of ESG focuses on the company’s internal systems and structures that
influence its decision-making processes, accountability, and transparency. It includes factors
such as board composition, executive compensation, shareholder rights, risk management,
compliance with laws and regulations, and the quality and accuracy of financial reporting.
Assessing a company’s governance practices helps gauge its integrity, ethical standards, and
the effectiveness of its leadership and oversight mechanisms.
The significance of ESG in assessing a company’s sustainability and societal impact
lies in its holistic approach to evaluating business practices. By considering environmental,
social, and governance factors, ESG provides a comprehensive view of a company’s
performance beyond financial indicators alone. It helps investors, stakeholders, and the wider
public make informed decisions and evaluate a company’s commitment to sustainable and
responsible business practices.
Companies that prioritize ESG considerations tend to be better positioned to manage risks,
attract investment, and foster long-term value creation while positively contributing to society
and the environment.
Sustainability reporting is a process that allows organizations to disclose their non-financial
performance in environmental, social, governance (ESG). These reports provide transparency
and accountability, enabling stakeholders, including investors, consumers, and regulatory
bodies, to assess the organization's sustainability practices and commitments. The goal of
sustainability reporting is to communicate how a company is managing its environmental and
social responsibilities alongside its economic performance. When addressing sustainability,
we refer to the original term "to sustain the longevity of a business." ESG is the framework
and pathway to the practice of sustainability.
The increasing recognition of the interconnectedness between business operations and global
sustainability challenges, such as climate change, resource depletion, and social inequities,
underscored the need for comprehensive sustainability reporting. This period also saw the
establishment of foundational frameworks and guidelines, such as the Global Reporting
Initiative (GRI), which provided a structured approach to sustainability reporting and helped
standardize the practice across industries.
Sustainability reporting is more critical than ever. With escalating concerns about climate
change, social inequality, and resource depletion, transparency in corporate sustainability
practices is essential. Sustainability reports serve as a vital tool for driving corporate
accountability and promoting sustainable business practices, aligning corporate activities with
broader societal goals.

 A Step Towards Standardized Reporting Practices and

Sustainability in Financial Reporting: BRSR and
Sustainibility Reporting
In August 2020, the Ministry of Corporate Affairs took a significant step towards promoting
responsible and sustainable practices in businesses by recommending a new comprehensive
framework known as the Business Responsibility and Sustainability Report (BRSR). This
framework aims to encourage all companies, especially the top 1000 listed companies, to
embrace sustainable practices and incorporate them into their reporting.
With the introduction of the BRSR, a paradigm shift has occurred in the corporate world. It is
no longer enough for companies to focus solely on financial performance; they must now also
consider their environmental, social, and governance (ESG) impacts. This holistic approach
aligns with the growing global awareness of the need for sustainability and responsible
business practices. For chartered accountants, this development presents both a challenge and
an opportunity. To remain relevant in the corporate landscape, they must now become well-
versed in sustainability reporting standards. These professionals are required to possess a
deep understanding of the BRSR framework and other relevant guidelines, enabling them to
effectively guide companies in complying with reporting and disclosure requirements.
By mastering sustainability reporting standards, chartered accountants can become trusted
advisors to businesses, helping them navigate the complexities of ESG reporting and
integrate sustainable practices into their operations. They play a vital role in ensuring that
companies accurately measure and report their environmental and social impacts, thus
fostering transparency and accountability.
  Why and How Should Companies Care for BRSR?
The top 1,000 listed firms in India in terms of market capitalization (the "BRSR
Companies") were able to provide environmental, social, and governance disclosures in
accordance with the BRSR Comprehensive framework on a voluntary basis up to this point,
i.e. until the financial year ("FY") 2021-22. However, beginning with the fiscal year 2022-23,
similar reports will be required from the same BRSR companies as before. As a consequence
of this, the mandated businesses are obliged to combine their BRSR reports with other
corporate filings made on the 'MCA21' portal, which is the website that is administered by
the Indian Ministry of Corporate Affairs ("MCA"). Additionally, the mandated organisations
are required to electronically submit their BRSR reports.
The disclosures that are required by BRSR have been separated into three components,
namely: In addition, reporting under each NGRBC principle for BRSR may be done
according to two performance levels or indicators: Rising Relevance and Benefits of
Sustainability- Related Roles Reporting on environmental, social, and governance (ESG)
practises in accordance with the BRSR framework gives an indication of a company's
capacity to manage and mitigate risks associated with ESG, in addition to improving its
business ethics and internal rules. As a result, businesses have to see BRSR compliance as a
chance to implement measures that:
1. General disclosures
2. Management and process disclosures, and
3. Category-wise performance disclosures with regard to nine principles that are stipulated
under the 'National Guidelines on Responsible Business Conduct' ("NGRBC")
In addition, reporting under each NGRBC principle for BRSR may be done according to two
performance levels or indicators
1. Essential, which is required, and
2. Leadership, which is optional.

 Challenges and Complexities in ESG Accounting:

ESG accounting poses several challenges and complexities, including:
Data Availability and Quality: Collecting reliable and relevant data for ESG metrics can be
challenging. Companies may need to invest in data collection systems and processes,
ensuring the accuracy and completeness of the data. Additionally, data on certain ESG factors
may be limited, making it difficult to provide a comprehensive assessment.
Lack of Standardization: The absence of universally accepted ESG accounting standards
and frameworks leads to inconsistent reporting practices. Companies face challenges in
selecting the most suitable reporting framework and aligning their ESG metrics with
industry-specific standards.
 Subjectivity and Measurement: Unlike financial accounting, which relies on objective
monetary values, ESG accounting involves subjective measurements. Determining the
materiality of ESG factors and assigning appropriate metrics can be complex. There is a need
for clearer guidelines and methodologies to ensure consistency and comparability.
Verification and Assurance: Ensuring the accuracy and reliability of reported ESG
information requires independent verification and assurance. The availability of qualified
auditors and certification bodies with expertise in ESG auditing may be limited, adding
complexity to the process.
Despite these challenges, the increasing demand for ESG accountability and the evolving
regulatory landscape are driving efforts to overcome these complexities and improve ESG
accounting practices.

 Potential Solutions and Opportunities for Improvement:

Standardization and Harmonization: Efforts should be made to develop common ESG
reporting standards and frameworks that are widely recognized and adopted. Harmonizing
reporting requirements can facilitate consistency and comparability in ESG disclosures.
Capacity Building and Education: Enhancing the skills and expertise of professionals
through training programs, certifications, and educational initiatives can address the skills
gap and promote effective ESG accounting and audit practices.
Data Collection and Reporting Systems: Companies should invest in robust data collection
systems and processes to ensure accurate and reliable ESG data. Improved data management
capabilities can enhance the quality and timeliness of ESG reporting.

 Emerging Standards and Guidelines for ESG Audits in

India:
In India, the regulatory landscape for ESG audits is evolving, and various standards and
guidelines are emerging. Here are some notable developments:
Sustainability Reporting Standards: The Securities and Exchange Board of India (SEBI)
introduced the Business Responsibility and Sustainability Reporting (BRSR) framework,
mandating the top 1,000 listed companies to disclose their ESG performance. This framework
aligns with international reporting standards, including the GRI and SASB.
Guidance from Professional Bodies: Professional bodies, such as the Institute of Chartered
Accountants of India (ICAI) and the Confederation of Indian Industry (CII), have developed
guidance documents and toolkits to assist auditors and companies in conducting ESG audits
and reporting.
Collaborative Initiatives: Collaborative initiatives between industry associations, investors,
and regulators are promoting ESG audit practices in India. For example, the National Stock
Exchange (NSE) partnered with the Indian Institute of Corporate Affairs (IICA) to create
awareness and build capacity for ESG reporting and audits.
  Future Oppurtunities for Chartered Accountant in
Sustainability Reporting
Chartered accountants can play a crucial role in sustainability reporting and supporting
organizations in meeting the increasing demand for high-quality and transparent reporting on
environmental, social, and governance (ESG) matters. Here's how chartered accountants can
be relevant in these roles:
WALK THE TALK
Governance place a critical role in setting the tone and building sustainable business. As
leaders Advisors and consultant charted accountant should lead by example, inspire their
teams and demonstrate a deep understanding of sustainability standard and practices .
CONSIDERING E,S,&G ASPECTS IN FINANCIAL DECISION AND REPORTING
India is finally getting close to having a global and uniform reporting standard from financial
2024 as per SEBI 1000 companies will disclose on their sustainability, in the new format
business responsibility and sustainability reporting.
TRANSPARENCY IN SUSTANABILITY REPORTING
Lets take an example,
We all are investors and looking to buy some shares of a company.
But you are doubting between the two co’s, company black and green.
As a good investor you do your homework , you look at financial reports and compare it and
it turn’s out that company black has better financial performance than green but you look at
the sustainability report you find company green is good with low carbon economy , on the
other hand company black is untransparent
So which of 2 companies would you invest in?
For me it’s very clear I would definitely invest in Co. Green because it is safe to put money
and take a step towards sustainability.
SUSTANABILITY ASSURANCE
Chartered accountants can conduct environmental audit to assess an organiation’s
environmental impact. We can examine the company’s operations,processes and system to
identify areas where sustainability improvement can be made.
ESG COMPLIANCES
Chartered accountant with their extensive expertise in various law and regulation can play a
crucial role in ensuring not on the compliance with these requirement but also streamlining
effort and minimising duplication of work and it comes to reporting.
There is company X planned to produce soft drinks using groundwater
Suppose company is developing 1 l of soft drink and using 4 l of water from Earth, then how
you will be account for that how will you monitor for that, report that how much resource you
have taken from Earth how will you be paying back to the Earth, how you are using various
resources money for CSR fund to replenish the resources you have taken from Earth it needs
to be accounted, it needs to be analyzed so that they can plan how to recover the resources so
that earth and society will remain sustainable for future generation
Non-financial reporting is gaining so much attraction and pace across the globe that having
these principles as the core aspect of any individual who's in accounting he has to be ethical
he must be independent and of course excellent in everything
ADVISING ON SUSTAINABILITY STRATEGY
Chartered accountants can advise organizations on sustainability strategy. We can help
organizations develop a sustainability vision and set goals to achieve it. We can also provide
guidance on sustainability best practices and identify opportunities for innovation and
improvement.
SUPPORTING CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Chartered accountants can support corporate social responsibility initiatives by providing
financial expertise and support. We can help organizations develop and implement social and
environmental programs, such as employee volunteer programs and sustainability reporting.
ADVOCATING FOR CHANGE
Chartered accountants can advocate for change in the business world. Organisations can use
their expertise to educate organizations and stakeholders about the importance of
sustainability and corporate social responsibility. We can also advocate for policy changes
and encourage companies to adopt more sustainable practices.
ESTABLISHING AND REPORTING ON SUSTAINABILITY METRICS
Chartered accountants play a critical role in establishing and reporting on sustainability
metrics. They can help organizations develop a framework for measuring and reporting
sustainability performance. By establishing key performance indicators (KPIs) and measuring
progress against them, organizations can identify areas for improvement and track their
sustainability progress over time.
CONDUCTING SOCIAL AND ENVIRONMENT AUDIT
Social audit is a process of reviewing official records and determining whether state reported
expenditures reflect the actual monies spent on the ground.
  PRACTICAL ASPECTS OF REPORTING
Taking few examples of companies who are actually following the ESG Reporting.

1. Reliance Limited
2. Apple

 CONCLUSION
In conclusion, the introduction of the Business Responsibility
and Sustainability Report (BRSR) by the Ministry of Corporate
Affairs marks not only a milestone in promoting responsible and
sustainable business practices but also presents a remarkable
opportunity for chartered accountants. As the corporate world
increasingly embraces sustainability, chartered accountants
who adapt and equip themselves with the necessary skills and
knowledge can position themselves as key drivers of change
and seize the opportunities that lie ahead.

By becoming well-versed in sustainability reporting standards,

chartered accountants can offer invaluable expertise to
businesses seeking to comply with the BRSR and other
reporting requirements. Their deep understanding of financial
management, auditing, and reporting uniquely positions them
to guide companies in accurately measuring and reporting their
environmental, social, and governance impacts.
This expertise elevates their role as trusted advisors, enabling
them to provide strategic insights that contribute to sustainable
decision-making and value creation.
Furthermore, chartered accountants have the opportunity to
expand their service offerings by assisting businesses in
identifying sustainability risks and opportunities. Through the
analysis of ESG data and financial information, they can provide
valuable insights for strategic planning, enabling organizations
to align their operations with sustainability goals and navigate
the complex landscape of responsible business practices.

As sustainability reporting becomes an integral part of

corporate reporting frameworks, chartered accountants who
embrace this evolution stand to gain a competitive advantage.
Their expertise in integrating sustainability into financial
reporting and decision-making processes positions them as
sought- after professionals in a market where stakeholders
increasingly prioritize transparency, accountability, and
responsible practices.

Moreover, the mandatory nature of the BRSR for the top 1000
listed companies from the financial year 2022 onwards
highlights the growing demand for professionals who can
navigate sustainability reporting requirements. Chartered
accountants who possess the necessary skills and knowledge to
guide businesses through this reporting landscape are well-
positioned to secure significant opportunities and expand their
client base.
In this rapidly changing business environment, chartered
accountants have the chance to play a transformative role in
shaping the future of corporate reporting and sustainability
practices. By leveraging their expertise, embracing
sustainability reporting standards, and staying abreast of
regulatory developments, they can position themselves as
leaders in driving responsible and sustainable business
practices.

The future holds immense opportunities for chartered

accountants who embrace sustainability reporting. By
capitalizing on their financial acumen, integrating sustainability
into their services, and staying ahead of emerging trends, they
can carve a path towards a prosperous and sustainable future
for both their clients and the wider business community. Let us
seize this opportunity to create a better world, where the role
of chartered accountants as catalysts for change becomes
synonymous with progress, integrity, and sustainable growth.