National Voluntary Guidelines on Social, Environmental and Economic responsibilities of Business from Ministry of Corporate Affairs

Posted on August 3, 2011 by

The ministry of corporate affairs last month released the “National Voluntary Guidelines on Social, Environmental and Economic responsibilities of Business”. Though voluntary and not compliance driven, the step shows the significant interest at the highest levels in addressing the challenge of sustainable development. The ministry has earlier released “Voluntary Guidelines on CSR” as the first step to bring business responsibility into the mainstream discussion. The feedback from various stakeholders has led to the development of these revised and more comprehensive guidelines – broadening the scope to now include social, environmental and economic responsibilities. The term applied throughout the guidelines is “Responsible Business” as against the Corporate Social Responsibility which gave a limited and philanthropic or charitable view of role of business.

About the guidelines

  1. The guidelines are designed to be used by all businesses, irrespective of size, sector and location.
  2. The guidelines are not prescriptive in nature but are based on practises to account for Indian social and business realities and the global trends. The key feature of the guidelines is the emphasis of the “triple bottom line” approach.
  3. The guidelines consist of principles along with pointers for development of management systems and processes for responsible business.
  4. Similar to GRI guidelines, there are a number of indicators to enble monitoring implmentation of processes. The indicators help the business map the current position and take short, medium and long term targets on the triple bottom line parameters.
  5. Guidelines also give special attention to the micro, small and medium enterprises (MSME) segment to encourage their participation – which is not an easy task given the lack of capacity and resources to implement changes
  6. Separate focus is given to ensure credible reporting and disclosure.

The 9 cardinal principles are listed as under

  1. Businesses should conduct and govern themselves with ethics, transparency and accountability
  2. Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.
  3. Business should promote the well-being of all employees.
  4. Businesses should respect the interests of and be responsible towards all stakeholders esp those who are disadvantaged, vulnerable or marginalized.
  5. Businesses should respect and promote human rights.
  6. Businesses should respect, promote and make efforts to restore the environment.
  7. Businesses, when engaged in influencing the public & regulatory policy, should do so in responsible manner.
  8. Businesses should support inclusive growth and equitable development.
  9. Businesses should engage with and promote value to their customers and consumers in a responsible manner.

We would soon come back with more details on these guidelines, including implementation and reporting soon. Till then feel free to comment back or visit us.

The detailed guidelines are here.

Posted in: Sustainability