INTRODUCTION:
The Ministry of Corporate Affairs (MCA), Government of India, released a set of guidelines and principles called the National Guidelines on Responsible Business Conduct (NGRBC). The NGRBC has been designed to assist businesses to perform the requirements of regulatory compliance.
APPLICABILITY
The NGRBC are designed to be used by all businesses, irrespective of their ownership, size, sector, structure or location. It is expected that all businesses investing or operating in India, including foreign multinational corporations (MNCs) will follow these guidelines. Correspondingly, the NGRBC also provide a useful framework for guiding Indian MNCs in their overseas operations, in addition to aligning with applicable local national standards and norms governing responsible business conduct.
Principles and Core Elements
This chapter contains the nine thematic pillars of business responsibility which are called Principles. The Principles are interdependent, interrelated and non-divisible, and businesses are urged to address them holistically. Annexure 1 of the Guidelines provides guidance to all businesses on the adoption and implementation of the Principles.
Principle 1: Businesses should conduct and govern themselves with integrity, and in a manner that is ethical, transparent, and accountable.
Principle 2: Businesses should provide goods and services in a manner that is sustainable and safe.
Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains.
Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders.
Principle 5: Businesses should respect and promote human rights.
Principle 6: Businesses should respect and make efforts to protect and restore the environment.
Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
Principle 8: Businesses should promote inclusive growth and equitable development.
Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner.
ANNEXURES
Annexure 1: Guidance on Adoption of NGRBC
The Principles and Core Elements contained in the NGRBC are designed to enable businesses to conduct themselves responsibly. Therefore, adopting these guidelines refers to the integration of the Principles and Core Elements into the core business strategy and operations of an enterprise including its value chain. So, how will the Governance Structure of a business know whether it has successfully integrated these NGRBC?
Here are some indicators:
- It should have in place, policies and guidance that are approved at the highest level and cover all the Principles.
- The key performance indicators of the business should incorporate all the Principles of the NGRBC and those Core Elements that significantly impact or are impacted by the business.
- The operating procedures of the business should also cover those Core Elements that significantly impact or are impacted by the business.
Annexure 2: Guidance for Micro, Small and Medium Enterprises
The Indian MSME sector can be broadly categorized into two types:
1. MSMEs organized around local and regional value chains: These comprise a large number of very small enterprises and is estimated to contribute between half to two-thirds of the total MSME output. However, their share has been shrinking over the years making way for integration across national and global value chains.
2. MSMEs that are part of national & global value chains: These can be further broken into three distinct although not mutually exclusive sub groups:
3. Global value chains linked
4. Vendors/suppliers for large buyers with domestic base
5. Emerging high growth start-ups
The steps that MSMEs should take to adopt the NGRBC are also described in Annexure 2, such as
1. Prioritizing the Core Elements.: The first step in adoption has to be prioritizing the Core Elements. In order to do this, the MSME must map all the Core Elements against Its own vision, mission, values, Laws and regulations, Buyer/Customer codes and business success factors. Those that align with or contribute to these must be considered priority.
2. Embedding Prioritized Core Elements: All the prioritized Core Elements must then be integrated into the core business.
Annexure 3: Business Responsibility Reporting Framework
This annexure details the reporting framework associated with the National Guidelines for Responsible Business Conduct. It consists of three sections:
(a) Section A – General Disclosures, covering operational, financial and ownership related information,
(b) Section B – Management and Process Disclosures covering the structures, policies and processes to integrate the Guidelines, and
(c) Section C – Principle-wise Performance Indicators covering how well businesses are performing in pursuit of these Guidelines.
Annexure 4: Sustainable Development Goals (SDGs) Mapped Against NGRBC
Annexure 5: Business Case Matrix
The Business Case Matrix (BCM) is designed as a tool to map the business benefits of integrating these Guidelines. The BCM highlights some significant benefits which may accrue to businesses from integrating the Principles from these Guidelines. This is not exhaustive and it is critical for each business to assess the benefits in their respective contexts.
Annexure 6: Guidance for Businesses on Using the Business Responsibility Reporting Framework (BRRF) as a Self-Assessment Tool
The Business Responsibility Reporting Framework (BRRF) is a tool for businesses to assess how well-aligned they are to the National Guidelines for Responsible Business Conduct (NGRBC), and identify opportunities for improvement. This note provides guidance on how this can be done. To begin with, it must be understood that there are two dimensions to alignment.
1. The first may be referred to as “completeness”, which measures the extent to which the Principles and Core Elements are tracked by the business.
2. The second, which may be referred to as “Ambition”, measures how evolved and challenging the performance targets that the business sets for itself are, and what to extent these are achieved.
Annexure 7: Indian Laws and Principles (Indicative)
This annexure is only an indicative/suggestive mapping of each of the Principles against laws enacted in India.
(*P=Principles)
| Principles(briefs) List of Laws(indicative) | P-1 | P-2 | P-3 | P-4 | P-5 | P-6 | P-7 | P-8 | P-9 |
| Factories Act,1948 | ~ | ~ | ~ | ~ | |||||
| Companies Act,2013 | ~ | ~ | ~ | ~ | |||||
| Bureau of Indian Standards Act, 2016 | ~ | ~ | ~ | ||||||
| Trade Marks Act, 1999 | ~ | ~ | ~ |
Annexure 8: Resources
National Resources
1. A Guidebook for Biodiversity Management – IBBI and CII-ITC CESD Insights on biodiversity and its links with businesses across seven major sectors. (http://www.sustainabledevelopment.in/uploads/pdf/1469421072IBBI%20BOOKLET%20FOR%20 WEB.pdf)
2. Affirmative Action for Scheduled Castes & Scheduled Tribes: A CII-ASSOCHAM Action Plan Proposed concrete steps by Indian industry on affirmative action. (http://www.cii.in/PolicyAdvocacyDetails.aspx?enc=IFXLRvnZcDACwloqWArEXIcvuANvzgDxEEJSWHB7rz5wGOZZgeDEwFRE76lKC5mfH1eO+UwMGUryNJwTMQk1Bg)
3. Aggregate Reports – Samples from Ajmer and Punjab clusters (http://database.globalreporting.org/reports/view/35253 | http://database.globalreporting.org/ reports/view/35252)
4. Constitution of India (https://india.gov.in/my-government/constitution-india/constitution-india-full-text)
5. Corporate Governance in India @ 2016: Where Do We Stand – FICCI A report on the state of corporate governance in India post introduction of Companies Act, 2013 (http://ficci.in/spdocument/20739/Corporate-Governance-report-2016.pdf)
6. Guidelines on Corporate Governance for Central Public Sector Enterprises Issued by the Ministry of Heavy Industries and Public Enterprises in May 2010 (http://dpe.nic.in/sites/upload_files/dpe/files/gcgcpse10.pdf)
7. Inclusiveness and Accessibility Index – FICCI A Toolkit to promote Inclusiveness of Persons with Disabilities. (http://ficci.in/publication-page.asp?spid=20718)
8. Indian Companies with Solutions that the World Needs: Sustainability as a Driver for Innovation and Profit – WWF & CII-ITC CESD Report focusing on climate change and how businesses develop strategic responses. (http://sustainabledevelopment.in/uploads/pdf/1445612272Indian_Companies_With_Solutions_ That_the_World_Needs.pdf)
9. India’s Nationally Determined Contribution Intended contribution of India towards the international climate agreement signed at the UNFCCC Conference of the Parties (COP21) in Paris in December 2015. (http://www4.unfccc.int/submissions/INDC/Published%20Documents/India/1/INDIA%20INDC%20 TO%20UNFCCC.pdf)
10. IS 16010: Guidance on Good Governance by Bureau of Indian Standards Standard specifies principles and governance structures for a value based management approach. (https://bis.gov.in/other/writeuponGG%20.pdf)
(And many more)
International Resources
1. Beyond Supply Chains – Empowering Responsible Value Chains – World Economic Forum Report on the case for and issues within sustainable supply chains of businesses (http://www3.weforum.org/docs/WEFUSA_BeyondSupplyChains_Report2015.pdf
2. Children’s Rights and Business Principles Guidance on how businesses can take action to respect and support children’s rights (https://www.unglobalcompact.org/docs/issues_doc/human_rights/CRBP/Childrens_Rights_and_ Business_Principles.pdf)
3. Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW) UN International Treaty bill of rights for women (http://www.un.org/womenwatch/daw/cedaw/)
4. Corporate Responsibility: Private Initiatives and Public Goals by OECD Analysis of the results of an OECD fact-finding project on business approaches tocorporate responsibility (https://www.oecd.org/daf/inv/corporateresponsibility/35315900.pdf
5. Developing Value by Sustainability and IFC Report on identifying opportunities to increase profits by making progress on sustainability. (http://www.ifc.org/wps/wcm/connect/84a59480488559ca842cd66a6515bb18/Developing_ Value_full.pdf?MOD=AJPERES)
6. ISO 26000: International Standard Guidance on how businesses and organizations can operate in a socially responsible way. (http://www.iso.org/iso/home/standards/iso26000.htm)
7. Forging a path for business in the UN 2030 development agenda Resources for businesses to map their initiatives within the UN 2030 development agenda including the SDGs. (http://www.businessfor2030.org/)
8. Global Reporting Initiative (GRI) Standards Guidance for businesses to prepare and publish sustainability reports as per the GRI Standards. https://www.globalreporting.org/standards/
9. Linking the GRI Standard and the SEBI BRR Framework https://www.globalreporting.org/standards/resource-download-center/linking-the-gristandards-and-the-sebi-brr-framework/
10. ILO Declaration on Fundamental Principles and Rights at Work Declaration commits Member States to respect and promote principles and rights in four categories (https://www.ilo.org/declaration/lang–en/index.htm)
(And many More)
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