BUSINESS RESPONSIBILITY Orientation on NVGs and their Operationalisation Chetna Kaura 1.

BUSINESS RESPONSIBILITYOrientation on NVGs and their Operationalisation

Chetna Kaura

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Historical and Socio-economic Context• Religious background• Charity and philanthropy• Principle of Trusteeship• Social Responsibility - The Western Thought• Environmental concerns• Concerns related to corporate conduct• National issues• CSR and Beyond: A Holistic Approach to Business

Responsibility

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Government and Business Responsibility

PM’s Ten Point Social Charter- 2007MCA and CSRVoluntary Guidelines on CSR, 2009National Voluntary Guidelines on Social, Environmental

and Economic Responsibilities 2011 (NVGs)Planning Commission and Task Force on Business

RegulationMoEF Draft Paper on Environmental Responsibility

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Broad Structure of the NVGs BookletIntroduction to the GuidelinesPrinciples and Core ElementsGuidance on Implementation Application of Guidelines to MSMEsBusiness Responsibility Reporting FrameworkAnnexure A: Business Case MatrixAnnexure B: ResourcesAnnexure C: List of Relevant Laws & Acts MappedAnnexure D: Endnotes- Explanation of Terms

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Introduction to the GuidelinesRefinement over CSR Voluntary Guidelines 2009Mandate and ProcessApplicabilityContent and Structure – 9 Principles, 48 Core ElementsCase studies

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Nine Principles of the NVGsPrinciple 1: Businesses should conduct and govern

themselves with Ethics, Transparency and Accountability

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their lifecycle

Principle 3: Businesses should promote the wellbeing of all employees

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Nine Principles of the NVGsPrinciple 4: Businesses should respect the interests of,

and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised

Principle 5: Businesses should respect and promote human rights

Principle 6: Businesses should respect, protect and make efforts to restore the environment

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Nine Principles of the NVGsPrinciple 7: Businesses when engaged in influencing

public and regulatory policy, should do so in a responsible manner

Principle 8: Businesses should support inclusive growth and equitable development

Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible manner

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Guidance on ImplementationLeadershipIntegrationEngagementReportingDetermining a Business Case

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Application of NVGs to MSMEs Supply chainGlobalizationMultiplicity of prevailing codes is a challengeMulti pronged approach suggested:1) Facilitating MSMEs to recognise the business case

for adopting Responsible Business practices2)Preference by public agencies and large players in

value chains to MSMEs that follow BR practices3)Handholding MSMEs during the adoption of the

NVGs

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Annual Business Responsibility Report• Section A: General Information about the Company• Section B: Financial Details of the Company• Section C: Other Details• Section D: Business Responsibility Information• Section E: NVG Principle-wise Performance• SEBI directive

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Objectives of the ABRR• Help companies to understand the ethos of NVG in

context of implementation• Help companies establish internal processes as well as

identify deficiencies• Assist in providing aggregated data on corporate BR

performance to aid policy formulation/research• Assist the stakeholders to review/assess BR

performance

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Business Case Matrix• Revenue growth and market access• Cost savings and productivity• Access to capital• Risk management/license to operate• Human capital• Brand value/reputation

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Resources Global Reporting Initiative (GRI) G3 GuidelinesFinal Draft ISO 26000Corporate Responsibility: Private Initiatives and Public

Goals by OECDUniversal Declaration of Human RightsConstitution of IndiaGuidelines on CSR for CPSEsAgenda for Affirmative Action by FICCI

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List of Relevant Laws & Acts Mapped

IndicativeFor e.g.. Equal Remuneration Act 1976 relevant to

Principle 1, Principle 3 and Principle 5 Legal CSR Framework

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Suggested Description and Explanation of Terms

Vulnerable and Marginalised Groups – include women and girls, people with disabilities, children, tribal's, migrants and migrant workers

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Next Steps

Mainstreaming through advocacy and capacity building activities

Formulation of sector specific guidelinesCoordination and integration of guidelines of all

MinistriesAnnual Business Responsibility Report uptake by

Ministry of Corporate Affairs

Contact:[email protected]

[email protected]

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Annual Business Responsibility Report (ABRR)

Section A: General Information about the Company

Corporate Identity Number (CIN) of the Company Name of the Company Registered address Website e-mail id Financial Year reported Sector(s) that the Company is engaged in (industrial activity code-wise) List three key products/services that the Company manufactures/provides (as in

balance sheet) Total number of locations where business activity is undertaken by the Company Number of International Locations (Provide details of major 5) Number of National Locations Markets served by the Company

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Section B: Financial Details of the Company

Paid up Capital (INR) Total Turnover (INR) Total profit after taxes (INR) Total Spending on Corporate Social Responsibility (CSR)

• In terms of Section 135 of Company’s Bill, 2011 (INR) • As percentage of profit after tax (%)

List the activities as per Schedule VII of Company’s Bill, 2011 in which expenditure

in 4 above has been incurred. a. b. c.

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Section C: Other Details

Does the Company have any Subsidiary Company/ Companies?

Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s)

Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [ Less than 30%, 30-60%, More than 60%]

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S.No. Particulars Details1. DIN Number (if applicable) 2. Name 3. Designation 4. Telephone number 5. e-mail id

Section D: BR Information

1. Details of Director/Directors responsible for BR a. Details of the Director/Director responsible for implementation of the BR policy/policies

• DIN Number • Name • Designation

b. Details of the BR head

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S.No. Questions P P P P P P P P P 1 2 3 4 5 6 7 8 91. Do you have a policy/policies for....

2.Has the policy being formulated in consultation with the relevant stakeholders?

3.Does the policy conform to any national/international standards? If yes, specify? (50 words)

4.Has the policy being approved by the Board? Is yes, has it been signed by MD/owner/CEO/appropriate Board Director?

5.Does the company have a specified committee of the Board/ Director/Official to oversee the implementation of the policy?

6. Indicate the link for the policy to be viewed online?

7.Has the policy been formally communicated to all relevant internal and external stakeholders?

8. Does the company have in-house structure to implement the policy/policies.

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Does the Company have a grievance redressal mechanism related to the policy/policies to address stakeholders’ grievances related to the policy/policies?

10.Has the company carried out independent audit/evaluation of the working of this policy by an internal or external agency?

2. Principle-wise (as per NVGs) BR Policy/Policies (Reply in Y/N)

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S.No. Questions P P P P P P P P P

1 2 3 4 5 6 7 8 9

1.The company has not understood the Principles

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The company is not at a stage where it finds itself in a position to formulate and implement the policies on specified principles

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The company does not have financial or manpower resources available for the task

4.It is planned to be done within next 6 months

5. It is planned to be done within the next 1 year

6. Any other reason (please specify)

2a. If answer to S.No. 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)

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3. Governance related to BR

Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year

Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published?

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Section E: Principle-wise performance

Principle 1

Does the policy relating to ethics, bribery and corruption cover only the company? Yes/ No. Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others?

How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management?

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Principle 2 List up to 3 of your products or services whose design has incorporated social or

environmental concerns, risks and/or opportunities. i. ii. iii. For each such product, provide the following details in respect of resource use

(energy, water, raw material etc.) per unit of product(optional):

• Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain?

• Reduction during usage by consumers (energy, water) has been achieved

since the previous year?

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Principle 2 cont’d…

Does the company have procedures in place for sustainable sourcing (including transportation)?

If yes, what percentage of your inputs was sourced sustainably? Has the company taken any steps to procure goods and services from local &

small producers, including communities surrounding their place of work? • If yes, what steps have been taken to improve their capacity and capability of

local and small vendors? Does the company have a mechanism to recycle products and waste? If yes

what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%).

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S.No. CategoryNo of complaints filed during the

financial year

No of complaints pending as on end of the financial

year

1. Child labour/forced labour/involuntary labour

2. Sexual harassment

3. Discriminatory employment

Principle 3

Please indicate the Total number of employees Please indicate the Total number of employees hired on temporary/contractual/casual

basis Please indicate the Number of permanent women employees Please indicate the Number of permanent employees with disabilities Do you have an employee association that is recognized by management. What percentage of your permanent employees is members of this recognized

employee association? Please indicate the Number of complaints relating to child labour, forced labour,

involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.

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What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year?

• Permanent Employees • Permanent Women Employees • Casual/Temporary/Contractual Employees • Employees with Disabilities

Principle 3 cont’d……

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Principle 4

Has the company mapped its internal and external stakeholders? Yes/No Out of the above, has the company identified the disadvantaged, vulnerable &

marginalized stakeholders. Are there any special initiatives taken by the company to engage with the

disadvantaged, vulnerable and marginalized stakeholders.

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Principle 5

Does the policy of the company on human rights cover only the company or extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others?

How many stakeholder complaints have been received in the past financial year

and what percent was satisfactorily resolved by the management?

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Principle 6 Does the policy related to Principle 6 cover only the company or extends to the

Group/Joint Ventures/Suppliers/Contractors/NGOs/others Does the company have strategies/ initiatives to address global environmental issues such

as climate change, global warming, etc.? Y/N. If yes, please give hyperlink for webpage etc. Does the company identify and assess potential environmental risks? Y/N Does the company have any project related to Clean Development Mechanism? If Yes,

whether any environmental compliance report is filed? Has the company undertaken any other initiatives on – clean technology, energy efficiency,

renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc. Are the Emissions/Waste generated by the company within the permissible limits given by

CPCB/SPCB for the financial year being reported? Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not

resolved to satisfaction) as on end of Financial Year.

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Principle 7

Is your company a member of any trade and chamber or association? If Yes, Name

only those major ones that your business deals with: i.ii.iii.iv.

Have you advocated/lobbied through above associations for the advancement or

improvement of public good? Yes/No; if yes specify the broad areas ( drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others)

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Principle 8

Does the company have specified programmes/initiatives/projects in pursuit of the

policy related to Principle 8? If yes details thereof.

Are the programmes/projects undertaken through in-house team/own foundation/external NGO/government structures/any other organization?

Have you done any impact assessment of your initiative?

What is your company’s direct contribution to community development projects- Amount in INR and the details of the projects undertaken.

Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.

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Principle 9

What percentage of customer complaints/consumer cases are pending as on the end of financial year.

Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A. /Remarks(additional information)

Is there any case filed by any stakeholder against the company regarding unfair

trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year.

Did your company carry out any consumer survey/ consumer satisfaction trends?

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Principle Revenuegrowthandmarketaccess

Costsavings andproductivity

Access tocapital

RiskManagement/ license to operate

Humancapital

Brand value/ reputation

1. Ethics transparency, transparency

New customersBusiness Partner of choice

Reduced costof ambiguityReducedlitigation

Attractive toinvestors, banksAttractive tofinancial markets

Positively seen bycommunities,NGOs, localgovernments regulators

Attract andretainemployees

Positively seenby customers,regulators,Media

2. Safe and sustainable goods and Services

New customersCustomer loyalty

Efficiencygains acrossthe valuechain –procurement productiondistribution after-sales

Investors feelassured thatliability issuesare minimized.Sustainableproductionattracts

Reduced risk ofaction fromregulators andNGOs

Employee morale is high due toworking to improve thequality oflife ofcustomers/Community

Better brandidentityNew foundUSP

The Business Case for following the Guidelines for the Social Environmental and Economic Responsibilities for Business

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Access tocapital


Humancapital


3. Well-being of employees

Business Partner of choice

IncreasedproductivityHigh moraleLessabsenteeism

Improved labourrelations leading toless disruptions

Attract andretainemployeesReducedtardiness &absenteeism

Employer ofchoice

4. Responsiveness to all stakeholders

Responsive To customer demands needs wants leads to increase inMarket share; The abilityto function in the long term is improved to being responsiveness

Efficiencygains acrossthe valuechain –procurement productiondistribution after-sales


Positively seen bycommunities,NGOs, localgovernments regulators

Peopledrawn towork for asensitiveemployer

Positively seenby customers,regulators mediaEhancescorporatecache

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Access tocapital


Humancapital


5. Promoting Human rights

Businesspartner ofchoice

Minimizedlitigation


Positively seen bycommunities andNGOsLower risk of non-compliance

Employees/ talentattracted byfirm that iscommittedto thedignity ofall.

Positively seenby customers,regulators media

6. Protecting theEnvironment

Business partner ofChoice Sustainability oriented buyers will prefer to deal with organization

Lower operatingcosts in the long termLess danger of externalities” emerging as liabilities

Attractive to investors, banks Attractive to financial markets

Positively seen bycommunities NGOs, localgovernments, regulators Lower risk of non-compliance

Talent is drawn to the firm due to itsCommitment to the wellbeing of theplanet.

Positively seenby customers,regulators,media

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Principle Revenue growthand marketaccess


Access tocapital

Risk Management/ license to operate

Humancapital


7. Responsiblepolicy advocacy

Growth stimulateddue to opennessand trust

Blunt the possibility ofothers using policy tostymie business

Openness will attract investors committed togood governance

Positively seen by civil society

People drawn towork for an open firm.

Positively seenby customers, regulators,media

8. Supporting inclusivedevelopment

New Customers Market expansion Innovative thinking stimulated

New models will emerge to impact costsavings

Newer sources of funding such as social venturefunds

Enhanced governmentalsupport to initiatives -cordial relations with stakeholders conducive for business growth.

Potential source ofTrained employees

Positively seenby customers,regulators, media

9. Providing valueto customer

New customersCustomer loyalty

New markets brought into fold

Investors back a growing firm

Lower risk ofconsumer action

Talent will be drawn towardsGrowing firm

Customersperceive brandand firmFavorably

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Principle 1 : Businesses should conduct and govern themselves with Ethics, Transparency and Accountability

Brief Description• Ethical conduct in functions and processes• Decisions and actions should be amenable to disclosure• Inform all the stakeholders of the operating risks involved• Establishment of a culture of integrity and ethics throughout the enterprise

Core Elements• Ethical conduct at all levels by developing proper governance structures, practices and

procedures• Transparent communication• Should not engage in practices that are abusive, corrupt or anti competition• Truthful discharging of the responsibility on financial and other mandatory disclosures• Avoid complicity with the actions of any third party that violates any of the principles.

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Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability “throughout their life cycle”Brief Description• To function effectively and profitable the businesses should work to improve the quality of

life of people• Engineer value in goods and services by keeping the impact of a product on the society

through all stages of the product life cycle

Core Elements• Assure safety and optimal resource use over the life cycle of the product• Recognize the rights of its consumers through education, product labeling, appropriate and

helpful communication, full details of the contents and safe usage.• Ensure that the manufacturing processes and technologies are resource efficient and

sustainable• Regularly review and improve upon the process of new technology development,

deployment and commercialization, incorporating social, ethical and environmental considerations

• Recognize and respect the intellectual property rights• Promote sustainable consumption

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Principle 3: Businesses should promote the wellbeing of all employees

Brief Description The principle encompasses all policies and practices relating to dignity and wellbeing of

employees engaged within a business or in its value chain The principle extends to all categories of employees within and outside its boundaries and covers

work performed by individuals, including subcontracted and home based.

Core Elements Respect the right to freedom of association, participation, collective bargaining and access to

proper grievance redressal mechanism Equal opportunities to all caste, creed, gender, religion, race, disability or sex No child labor, forced labor or any form of involuntary labor (paid or unpaid) Cognizance of work life balance of employees especially women Provide facilities for the wellbeing Safe, hygienic and humane work place environment Ensure continuous skill and competence up gradation of all employees Harassment free work place

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Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized

Brief Description• Responsibility to think and act beyond the interests of its shareholders to include all their

stakeholders• Proactively engage with and respond to those that are disadvantaged, vulnerable and

marginalized

Core Elements Systematically identify their stakeholders, understand their concerns, define purpose and

scope of engagement, and commit to engaging with them. Acknowledge, assume responsibility and be transparent about the impact of their policies,

decisions, product and services and associated operations on the stakeholders. Give special attention to stakeholders in areas that are underdeveloped Resolve differences with stakeholders in a just, fair and equitable manner

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Principle 5: Businesses should respect and promote human rights

Brief Description Recognizes that human rights are the codification and agreement of what it means to treat others

with dignity and respect. Imbibes its spirit from the Constitution of India Takes into account the “Corporate Responsibility to Respect Human Rights”

Core Elements Understand the human rights content of the Constitution of India, national laws and policies and

content of International Bill of Human rights. Integrate respect for human rights in management systems through assessing and managing

human rights impacts of the business operation Recognize and respect all human rights of all relevant stakeholders and groups within and beyond

workplace Promote the awareness and realization of rights across its value chain Should not be complicit with human rights abuses by third party

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Principle 6: Business should respect, protect and make efforts to restore the environment

Brief Description Recognizes the environmental responsibility is a pre requisite for sustainable economic growth

and well being of society Emphasizes that environmental issues are interconnected at the local, regional and global levels. Encourages businesses to understand and be accountable for direct and indirect environmental

impacts of their operations, products and services Urges businesses to follow the precautionary principle

Core Elements Utilize natural and man made resources in and optimal and responsible manner Take measures to check and prevent pollution Ensure that benefits are shared equitably Continuously seek to improve environmental performance Develop Environment Management Systems and contingency plans Report environment performance Proactively persuade and support its value chain for adoption of this principle

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Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner

Brief Description Recognizes that business operate within the specified legislative and policy frameworks

prescribed by the Government Acknowledges that in a democratic set up, such as legal frameworks are developed in a

collaborative manner with participation of all the stakeholders including businesses Recognizes the right of businesses to engage with Government for redressal of a grievance

or for influencing public policy and public opinion Emphasizes that policy advocacy must expand public good

Core Elements Businesses, while pursuing policy advocacy must ensure that their advocacy positions are

consistent with the Principles and Core Elements contained in these Guidelines. Businesses should utilize the trade and industry chambers and associations and other such

collective platforms to undertake such policy advocacy

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Principle 8: Businesses should support inclusive growth and equitable development

Brief Description Recognizes the challenges of social and economic development faced by India and builds upon

the development agenda Recognizes the value of energy and enterprise of businesses and encourages them to innovate

and contribute to the overall development of the country Emphasizes the need for collaboration amongst businesses, government agencies and civil society

in furthering this development agenda. Reiterates that business prosperity and inclusive growth and equitable development are

interdependent

Core Elements Understand their impact on social and economic development. Innovate and invest in products, technologies and processes that promote the wellbeing of

society and mitigate any negative impacts Make efforts to complement and support the development priorities at local and national levels Businesses operating in regions that are underdeveloped should be especially sensitive to local

concerns

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Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible manner

Brief Description Basic aim of a business entity is to provide goods and services to its customers in a manner that

generates value for both. Acknowledges that no business entity can exist or survive in the absence of its customers. Recognizes that customers have the freedom of choice in the selection and use of goods Recognizes that businesses have an obligation to mitigating the long term adverse impacts that

excessive consumption may have on the overall well-being of individuals, society and our planet.

Core Elements Take into account the overall well-being of the customers and that of society. Ensure that they do not restrict the freedom of choice and free competition in any manner Disclose all information truthfully and factually, through labelling and other means Promote and advertise their products in ways that do not mislead, confuse the consumers or

violate any of the principles in these guidelines. Exercise due care and caution while providing goods and services that result in over-exploitation

of natural resources or lead to excessive conspicuous consumption. Provide adequate grievance handling mechanisms to address customer concerns and feedback.

BUSINESS RESPONSIBILITY Orientation on NVGs and their Operationalisation Chetna Kaura 1.

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Transcript of BUSINESS RESPONSIBILITY Orientation on NVGs and their Operationalisation Chetna Kaura 1.