the social, environmental & economic responsibilities of business bimal arora 07 february, 2013,...

The Social, Environmental & Economic Responsibilities of Business

Bimal Arora 07 February , 2013, Hyderabad

Historical and Socio-economic Context

Religious backgroundCharity and PhilanthropyPrinciple of TrusteeshipSocial Responsibility - The Western ThoughtEnvironmental ConcernsCSR and BeyondNational ConcernsBusiness Responsibility- A Holistic Approach

Government and Business Responsibility

PM’s Ten Point Social CharterMCA and CSRVoluntary Guidelines on CSR, 2009

• Released in Dec 2009, in presence of the President of India• A statement of intent by the national government• Intended to be replaced by a more comprehensive

guidelineDraft Voluntary Guidelines 2011Planning Commission and Task Force on Business

Regulation

Formulations of the National Guidelines

IICA mandated to formulated the guidelinesConstitution of the Guidelines Drafting

CommitteeWide and elaborate Stakeholder

ConsultationsExpansion of GDC in 2010Formulation of holistic guidelines that take

into account the global practices but are ‘Indian’ in ethos

Structure of the Guidelines

1. Nine (9) Principles, covering the Triad and Ethics Brief Description Core Elements

2. Implementation Guidance on the 9 Principles3. Indicators (metrics) to enable self-monitoring by

businesses4. Specific inputs for MSMEs5. Caselets to aid comprehension of best practices in

each Principle6. Business Case Matrix7. Glossary of Terms used

Background

The Draft Guidelines were shared over email with over 700 businesses/groups in India – representing different industry sectors, locations, sizes and maturity– seeking feedback and responses

Guidelines sent to the Members of FICCI, CII, PHD Chamber and TERI for them to critique

Face to face interactions in stakeholder meetings in Delhi, Mumbai, Bangalore and Kolkata

Review and Compilation of the Final Report

Principles of the Guidelines

Principle 1: Ethics, Transparency and Accountability Principle 2: Providing Goods and Services that are

Sustainable over entire Life Cycle Principle 3: Well-being of Employees Principle 4: Being Responsive towards Stakeholders,

especially the disadvantaged Principle 5: Respecting and Promoting Human Rights Principle 6: Protecting and Restoring the Environment Principle 7: Responsible Policy Advocacy that enhances

Public Good Principle 8: Supporting Inclusive Growth and Development Principle 9: Providing Value to Customers responsibly

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.

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

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

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

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

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

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

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

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.

Adoption Methods and Reporting Framework

For the Voluntary Guidelines to be universally adopted, they must become part of the business DNA

Adoption Methods, Reporting Framework and Indicators are included, to enable firms to understand and perform as “Responsible Businesses”

MSME Guidance to reinforce that all businesses irrespective of size need to function responsibly

Reporting and Disclosure at two levels

Step 1 - Analyse Your Business

Key Business Drivers

Opportunities and Threats

Strengths and Weakness

Articulate the RB Policy






Step 2 - Identify Risks and

Opportunities

Identify Issue

Network

Prioritise


Opportunities

Identify Issue

Network

Prioritise

Step 3 - Develop a Strategy

Operational Vs Strategic

Compliance Vs Beyond Compliance




Step 4 - Plan and Implement

Strategy

Roadmap

Clear Objective

Adoption of Indicators for each Principle


Strategy

Roadmap

Clear Objective


Step 5 - Monitor and Review

Progress

Monitor

Measure

Learn and Refine Processes


Progress

Monitor

Measure


Step 6 –Communicate

Convey Rationale

Listen

Embed In Communications

Report


Convey Rationale

Listen


Report

Training

‘Low-hanging Fruit’












Opportunities

Identify Issue

Network

Prioritise


Opportunities

Identify Issue

Network

Prioritise








Strategy

Roadmap

Clear Objective



Strategy

Roadmap

Clear Objective



Progress

Monitor

Measure



Progress

Monitor

Measure



Convey Rationale

Listen


Report


Convey Rationale

Listen


Report

Training

‘Low-hanging Fruit’

Six Steps for Building A Strategy for Responsible Business (RB)

Source: Adapted from Developing Value published by SustainAbility and IFC

IICA, New Delhi

NVGs Aligned with Aspects of Private Healthcare Sector

General Manufacturing Processes

IPR New Technologies, R&D

Environment Resource Efficiency and Sustainable Production Practices (LCA)

Good Manufacturing Practices

Reduce, Reuse, Recycle

Periodic Impact Assessment and Disclosure

Pollution Control Measures

Pollution (Hospital Waste) Control Measures

Pollution (Pathological Waste) Control Measures

Clean Technology & EMS

Environmental performance of Value Chain members

Stakeholders, Community

Stakeholder Engagement and Communication

Community Well-being & Inclusion

Labour Complaint and Grievance Redressal

Equal Opportunity at work

Child, Bonded and Forced Labour

Occupational Health & Safety

Wage Policies

Workplace Environment

Human Rights (Bonded Labour, Sexual Harassment, Child Labour, Disabled Person)

Marketing Transparent Marketing Information & Communication

Anti-competitive Practices

Consumer Education and Information

Sustainable Consumption

Deceptive Marketing Practices (UTPs)

Freedom of Choice (Consumers)

Consumer Grievances and Handling

Distribution Abuse of Dominant Position (Exclusionary)

Corruption (Influencing hospitals/providers to sell products)

Corrupt practices in Hospitals

Corruption (‘Commission/Cuts’ for Docs)

Anti-competitive Practices

Lobbying and Policy Advocacy Processes

Thank You

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