Question 21 from UPSC CSE 2025 - Economics

Question

Consider the following statements:
1. The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).
2. In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.
Which of the statements given above is/are correct?

IASCODEX · Accepted Answer

Correct Option: B. 2 only

Strategy: Noting that regulatory authority is critical—statement 1 refers to the Reserve Bank of India, which is not the regulatory body for listed company disclosures; that is SEBI's domain. This makes statement 1 easily dismissible as incorrect regardless of context. Statement 2 aligns with the known nature of BRSR, which focuses on non-financial (ESG-related) disclosures. Therefore, only statement 2 is correct.

Key Info: The Business Responsibility and Sustainability Report (BRSR) is a framework mandated by SEBI (Securities and Exchange Board of India), not the Reserve Bank of India (RBI). BRSR replaced the earlier Business Responsibility Report (BRR) from FY 2022-23 for the top 1000 listed companies by market capitalization. SEBI amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to make BRSR obligatory.

BRSR is designed to standardize and quantify disclosures on Environment, Social, and Governance (ESG) parameters. These disclosures are primarily non-financial and cover issues such as energy use, resource conservation, workforce diversity, social impact, governance structure, and stakeholder relationships. The purpose is to provide transparency and enable comparability for investors and other stakeholders.

Examples of ESG topics in BRSR include:
- Environmental: greenhouse gas emissions, waste management, water usage
- Social: employee welfare, community engagement, human rights
- Governance: board composition, ethics, anti-corruption measures

RBI regulates banking and monetary policy, not company reporting standards. SEBI, established under the SEBI Act, 1992, is the regulatory authority for securities markets in India and mandates disclosure norms for listed companies.

IASCODEX · Answer

Option A: 1 only

IASCODEX · Answer

Option C: Both 1 and 2

IASCODEX · Answer

Option D: Neither 1 nor 2