Attributable to the growth in the manufacturing activities as well as facilitation provided by the simpler and convenient policies framed by the Government, the Indian economy is witnessing a large-scale improvement. The raise in the levels of Gross Domestic Product and the increase in the inflow of foreign investments makes India a lucrative option for business escalation.
National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business
With a view to capture key national and international developments in the development agenda and business responsibility field that had occurred and benefit by a more comprehensive resources section that would strengthen the overall guidance to the leadership and owners of businesses, the Ministry of Corporate Affairs issued the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (hereinafter referred to as “NVGs”) on June 20, 2018 inviting comments from the public till September 10, 2018.
The Guidelines are designed to be used by all businesses, irrespective of their ownership, size, sector, or location. It covers all businesses investing or operating in India, including foreign multi-national corporations.
All the principles of the Guidelines, stated below, are equally important, inter-related, inter-dependent and non-divisible and the businesses should adopt them in toto to accrue the full benefits of sustainable business strategies:
- Principle 1: Businesses should conduct and govern themselves with integrity in a manner that is ethical, transparent and accountable with a view to ensure responsible conduct and actions for the effective adoption, implementation and the making of disclosures to all stakeholders.
- Principle 2: Businesses should provide goods and services in a manner that is safe and sustainable to contribute towards enhancing the quality of life in a manner that creates value while minimizing its adverse impacts on the environment and society through all stages of its life cycle, from design to final disposal.
- Principle 3: Businesses should respect and promote the well-being of all employees, including those in the value chain by encompassing all policies and practices relating to the equity and dignity without any discrimination.
- Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders by maximizing the positive impacts and minimize the negative impacts on them.
- Principle 5: Businesses should respect and promote human rights imbibing the ideologies of the Constitution of India, the Universal Declaration of Human Rights and the UN Guiding Principles on Business and Human Rights. This principle is based upon the holistic respect for human rights offering a practical and legitimate framework for business leaders seeking to avail business opportunities and management of risks in a responsible manner.
- Principle 6: Businesses should respect and make efforts to protect and restore the environment recognizing that environmental responsibility is a prerequisite for sustainable economic growth and for the welfare of society. It encourages businesses to understand environmental risks and opportunities material to business working towards mitigation of harmful impacts considering aspects such as pollution, biodiversity conservation and climate change (mitigation and adaptation) in a comprehensive and systematic manner.
- Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent for greater public good.
- Principle 8: Businesses should promote inclusive growth and equitable development identifies the value of the energy and enterprise of businesses and encourages them to innovate and contribute to the overall development of the country with a specific focus on disadvantaged, vulnerable and marginalised communities.
- Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner thereby striving to make available products that are safe, competitively priced, easy to use and safe to dispose of, for the benefit of their consumers.
The guidelines provide practical guidance to businesses on the adoption and implementation of the principles.