In 2009, the Indian Ministry of Corporate Affairs took the first step introducing the concept of business responsibility towards society by releasing the voluntary guidelines on CSR. The refined version of the guidelines was released in July after extensive stakholder consultations. It is titled as the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business.
The business responsibility (BR) framework, as it is called, has been jointly designed by the Indian Institute of Corporate Affairs, a think tank under the ministry, and German-based international enterprise GIZ as part of a bilateral co-operation effort.
The voluntary guidelines have been intended for use by businesses of all sizes operating in the country including multi-national corporations. Businesses have been urged to apply the guiding framework to all actors across their value chain.
To move towards sustainable business ethos, the guidelines recommend that there should be a firm commitment from the top leadership, integration of the business principles into core strategies and policies, strong and continuous engagement with stakeholders and disclosure to all stakeholders.
The BR framework encompasses nine principles with core elements to operationalize each of these principles, including:
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Businesses should conduct and govern themselves with Ethics, Transparency and Accountability;
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Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle;
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Businesses should promote the wellbeing of all employees;
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Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized;
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Businesses should respect and promote human rights;
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Business should respect, protect, and make efforts to restore the environment;
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Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner;
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Businesses should support inclusive growth and equitable development, and
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Businesses should engage with and provide value to their customers and consumers in a responsible manner.
The fifth principle takes into account the ‘Corporate Responsibility to Respect Human Rights’, as referred in the United Nations framework of “Protect, Respect, Remedy”.
The framework encourages businesses not only incorporate responsible practices into their business model but to communicate these efforts to stakeholders in a transparent manner. Thus, the document includes a chapter on reporting CSR efforts effectively. The reporting framework stresses the fact that by unveiling responsible business practices, companies can more effectively engage with their stakeholders.
Currently the BR framework remains voluntary. It remains to be seen whether the Ministry of Corporate Affairs eventually makes the guidelines mandatory or chooses to incorporates some or all of the principles into policies.
