For Ensuring Sustainability, Capacity Building Is Important: Sanjeev Singhal Of ICAI
If action is to be taken against climate change, it is important to approach the issue holistically and to involve all players. If the government adopts frameworks and policies but do not mandate them, then companies will have no incentive to follow suit. Alternatively, if companies decide to take action on their own emissions and greenhouse emissions but the government does not have any proper frameworks or guidelines to follow, then it would be a futile endeavour.
Sanjeev Singhal, Chair of UNCTAD ISAR 39th Session and a Central Council Member of ICAI, spoke at the Sustainable World Conclave 2023 at the Park Hotel in New Delhi. Singhal shared about the various measures taken by his two organisations in the world’s fight against climate change.
Singhal spoke on the roadmap ahead until 2026-27 in the second phase, with the first phase being the Business Responsibility Report, which he admitted did not make much of an impact. Speaking on the second phase, Singhal stated that it started in 2020 with the Business Responsibility and Sustainability Reporting (BRSR) being made voluntary for the top 1000 listed companies, this was followed by the BRSR being made mandatory for the top 1000 companies in 2022-23.
He noted that from the current financial year, key matrices of business responsibility and sustainability reporting have been made mandatory for the top 150 listed companies. Aside from this, the Capital Market regulator took a “path breaking step” by mandating that those mutual fund schemes which are ESG based schemes need to invest at least 65 per cent of their asset under management into those companies which are getting a reasonable assurance audit done of BRSR.
Looking to the future, Singhal stated that in 2024-25, it has been proposed that ESG disclosures for value chain partners will be made mandatory and the assurances will be done on a “comply and explain” basis.
By 2026-27, he noted that BRSR core, which are key matrices of reporting, will be made mandatory for the top 1000 listed companies, which he explained covers approximately 95 per cent of the market capitalisation.
Singhal continued his presentation with a talk on the role of ICAI in the road to sustainability.
The Institute of Chartered Accountants of India (ICAI), which was formed in 1949 by an act of parliament, has played a significant role in promoting sustainability and accountability in the corporate sector.
In 2020, ICAI established the Sustainability Reporting Standard Board (SRSB) to encourage companies to voluntarily adopt sustainable reporting practices. It has been actively working on key pillars such as providing technical guidance and capacity building. Notably, ICAI took the lead in developing an assurance standard for sustainability information audits.
The Standard on Sustainability Assurance Engagements (SSAE) 3000, issued by ICAI, became the world's first auditing standard in this area. This standard played a crucial role in the Securities and Exchange Board of India (SEBI) making sustainability assurance mandatory, addressing concerns of greenwashing. “While the whole world has been struggling to come out with an assurance standard for doing the audit of sustainability information, Institute of Charted Accountants of India has been the first one in the world to come out with an auditing standard on this and based on it, Sebi could make that Assurance mandatory,” Singhal noted.
To ensure the effective implementation of sustainability reporting and auditing standards, ICAI has been focused on capacity building. The institute has launched a comprehensive training program, consisting of a 20-hour course for Chartered Accountants (CAs), with a new batch introduced each month.
So far, 18 batches have been completed, with 1,600 members successfully clearing the course. Additionally, ICAI partnered with Sebi to establish the Institute of Social Auditors of India (ISAI), aligning with the sustainable development goals. ISAI issued 16 audit standards on social audits, making India the first country in the world to have social impact assessment standards.
ICAI also introduced the Sustainability Reporting Maturity Model Framework, enabling companies to evaluate their sustainability practices and identify their current level on a scale from Level one to four.
Recognising the importance of international collaboration, ICAI has formed partnerships and affiliations with prominent organisations. It is the principal partner of the Confederation of Indian Industry (CII) for the G20 and B20 initiatives.
Furthermore, ICAI is involved in projects with the United Nations Development Programme (UNDP), holds a chair for the United Nations Conference on Trade and Development (UNCTAD), and actively participates in global forums such as the World Investment Forum and World Economic Forum (WEF).
Demonstrating its commitment to sustainability, ICAI aims to achieve net-zero emissions by 2049, coinciding with its centenary year, aligning its goals with the global drive toward a sustainable future.
