The Social, Environmental &
Economic Responsibilities
of Business
Bimal Arora
07 February , 2013, Hyderabad
Historical and Socio-economic Context
 Religious background
 Charity and Philanthropy
 Principle of Trusteeship
 Social Responsibility - The Western Thought
 Environmental Concerns
 CSR and Beyond
 National Concerns
 Business Responsibility- A Holistic Approach
Government and Business Responsibility
 PM’s Ten Point Social Charter
 MCA and CSR
 Voluntary 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 guideline
 Draft Voluntary Guidelines 2011
 Planning Commission and Task Force on Business
Regulation
Formulations of the National Guidelines
 IICA mandated to formulated the guidelines
 Constitution of the Guidelines Drafting Committee
 Wide and elaborate Stakeholder Consultations
 Expansion of GDC in 2010
 Formulation of holistic guidelines that take into
account the global practices but are ‘Indian’ in ethos
Structure of the Guidelines
1.
2.
3.
4.
5.
6.
7.
Nine (9) Principles, covering the Triad and Ethics
 Brief Description
 Core Elements
Implementation Guidance on the 9 Principles
Indicators (metrics) to enable self-monitoring by
businesses
Specific inputs for MSMEs
Caselets to aid comprehension of best practices in each
Principle
Business Case Matrix
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
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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
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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
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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
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Core Elements
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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 overexploitation 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
Six Steps for Building A Strategy for Responsible
Business (RB)
Step
Step11--Analyse
AnalyseYour
YourBusiness
Business

Key
KeyBusiness
BusinessDrivers
Drivers

Opportunities
Opportunitiesand
andThreats
Threats

Strengths
Strengthsand
andWeakness
Weakness

Articulate
Articulatethe
theRB
RBPolicy
Policy
Step
Step66––
Communicate
Communicate

Convey
Convey
Rationale
Rationale

Listen
Listen

Embed
EmbedIn
In
Communications
Communications

Report
Report
Step
Step55--Monitor
Monitorand
andReview
Review
Step
Step22--Identify
IdentifyRisks
Risksand
and
Progress
Progress
Opportunities
Opportunities

Monitor
Monitor

Identify
IdentifyIssue
Issue

Measure
Measure

Network
Network

Learn
Learnand
andRefine
RefineProcesses
Processes

Prioritise
Prioritise
Step
Step44--Plan
Planand
andImplement
Implement
Strategy
Strategy
 Training

Roadmap
Roadmap

Clear
ClearObjective
Objective

‘Low-hanging
Fruit’
Adoption
of
Indicators
Adoption of Indicatorsfor
foreach
each
Principle
Principle

Step
Step33--Develop
DevelopaaStrategy
Strategy

Operational
OperationalVs
VsStrategic
Strategic

Compliance
ComplianceVs
VsBeyond
Beyond
Compliance
Compliance
Source: Adapted from Developing Value published by SustainAbility and IFC
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
Manufacturin
g Practices
Stakeholders,
Community
Stakeholder
Engagemen
t and
Communic
ation
Community
Well-being &
Inclusion
Labour
Complaint
and
Grievance
Redressal
Marketing
Transparen
t Marketing
Informatio
n&
Communic
ation
Distribution
IICA, New
Abuse of
Dominant
Position
(Exclusiona
Delhi
ry)
Reduce,
Reuse,
Recycle
Periodic
Impact
Assessment
and
Disclosure
Pollution
Control
Measures
Pollution
(Hospital
Waste)
Control
Measures
Pollution
(Pathological
Waste)
Control
Measures
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)
Anticompetitive
Practices
Consumer
Education
and
Information
Sustainable
Consumption
Deceptive
Marketing
Practices
(UTPs)
Freedom of
Choice
(Consumers)
Consumer
Grievances
and Handling
Corruption
(Influencing
hospitals/pro
viders to sell
products)
Corrupt
practices in
Hospitals
Corruption
(‘Commission
/Cuts’ for
Docs)
Anticompetitive
Practices
Lobbying and
Policy
Advocacy
Processes
Clean
Technology &
EMS
Environment
al
performance
of Value
Chain
members
Thank You