ICAI Releases Sustainability Reporting Maturity Model (SRMM) Version 1.0
CA. Nihar N Jambusaria, President, ICAI, and IFAC PAIB Advisory Group Member, and CA. (Dr.) Sanjeev Kumar Singhal, Chairman, Sustainability Reporting Standards Board, ICAI | May 28, 2021
The Institute of Chartered Accountants of India (ICAI), regulator of accountancy profession in India, has a strong tradition of service to the country towards sustainable economic development. ICAI through its Sustainability Reporting Standards Board is working relentlessly to augment the culture of accurate and reliable non-financial reporting, develop reporting metrics for Sustainable Development Goals (SDGs), benchmarking sustainability disclosures, strengthening assurance frameworks for non-financial information, and capacity building of the profession.
To strengthen the sustainability reporting of corporates, ICAI has developed “Sustainability Reporting Maturity Model (SRMM) Version 1.0” with an objective to bring out a comprehensive scoring tool based on report of the Committee on Business Responsibility Reporting (BRR) constituted by the Ministry of Corporate Affairs (MCA), Government of India. This SRMM provides the foundation for benchmarking sustainability reporting of Indian corporates.
The Committee has recommended Business Responsibility and Sustainability Reporting (BRSR) as an update to the existing Business Responsibility Reporting (BRR) requirements to incorporate the current global practices in non-financial reporting. The BRSR Framework is India’s response to the emerging trend of Responsible Business and increasing trends of Environmental, Social, and Governance (ESG) reporting and investing.
The Business Responsibility and Sustainability Report scoring mechanism comprises of total 300 scores, by completing the scoring of all three sections and nine principles of the BRSR. The SRMM allows the rating agencies and assurance providers to compare the sustainable nature of the Indian companies with other international companies. Being an innovative concept in sustainability ecosystem, SRMM is being registered as a trademark.
The SRMM helps companies to assess and evolve their sustainability maturity level helping to achieve the vision of a sustainable ecosystem across the country. ICAI members will play an important role in helping the organizations increase their level of preparedness on the sustainability parameters including in the Model.
Level 1-4 of the SRMM represents the sustainability maturity of corporates based on a total range of scores obtained by a corporate in a financial year as per the BRSR scoring mechanism.
- Level 1 – Forming/Initiation Stage - The organisations are at the initial level of reporting and are in the process of identifying the need and responsibility of BRSR.
- Level 2 – Emerging/Responsive Stage - The organisations realize the value of BRSR and responds to it by setting up robust mechanism for reporting, etc.
- Level 3 – Regulated Stage - The organisations have established formal functions/ policies/ systems for BRSR.
- Level 4 - Mature Stage - The organisations strive for more than compliance and work towards being a market leader.
Corporates can self- evaluate their current level of maturity on the SRMM, identify areas where more focus is required and then develop a road map for upgrading to a higher level of maturity. This would include formulation of strategies/ processes for internal controls and data collection to progress towards achievement of sustainable goals and thereby moving to higher level of sustainable reporting.
To achieve a sustainable green economy, we need every company accelerating and amplifying their positive impacts and making enhanced disclosures with respect to non-financial information. The SRMM Version 1.0 is an important tool which would encourage corporates to measure and generate greater impact on environment and society, which in turn will assist in achievement of the Sustainable Development Goals (SDGs) at a higher speed. ICAI has also set out a strategy for developing version 2.0 of SRMM based on the views/inputs from corporates with regard to implementation of SRMM Version 1.0.
For more details regarding SRMM Version 1.0, please visit https://resource.cdn.icai.org/63191srsb51141.pdf