BUSINESS RESPONSIBILITY
Orientation on NVGs and their Operationalisation
Chetna Kaura
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Historical and Socio-economic Context
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Religious background
Charity and philanthropy
Principle of Trusteeship
Social Responsibility - The Western Thought
Environmental concerns
Concerns related to corporate conduct
National issues
CSR and Beyond: A Holistic Approach to Business
Responsibility
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Government and Business Responsibility
 PM’s Ten Point Social Charter- 2007
 MCA and CSR
 Voluntary Guidelines on CSR, 2009
 National Voluntary Guidelines on Social, Environmental
and Economic Responsibilities 2011 (NVGs)
 Planning Commission and Task Force on Business
Regulation
 MoEF Draft Paper on Environmental Responsibility
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Broad Structure of the NVGs Booklet
 Introduction to the Guidelines
 Principles and Core Elements
 Guidance on Implementation
 Application of Guidelines to MSMEs
 Business Responsibility Reporting Framework
 Annexure A: Business Case Matrix
 Annexure B: Resources
 Annexure C: List of Relevant Laws & Acts Mapped
 Annexure D: Endnotes- Explanation of Terms
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Introduction to the Guidelines
 Refinement over CSR Voluntary Guidelines 2009
 Mandate and Process
 Applicability
 Content and Structure – 9 Principles, 48 Core Elements
 Case studies
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Nine Principles of the NVGs
 Principle 1: Businesses should conduct and govern
themselves with Ethics, Transparency and
Accountability
 Principle 2: Businesses should provide goods and
services that are safe and contribute to sustainability
throughout their lifecycle
 Principle 3: Businesses should promote the wellbeing
of all employees
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Nine Principles of the NVGs
 Principle 4: Businesses should respect the interests of,
and be responsive towards all stakeholders, especially
those who are disadvantaged, vulnerable and
marginalised
 Principle 5: Businesses should respect and promote
human rights
 Principle 6: Businesses should respect, protect and
make efforts to restore the environment
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Nine Principles of the NVGs
 Principle 7: Businesses when engaged in influencing
public and regulatory policy, should do so in a
responsible manner
 Principle 8: Businesses should support inclusive growth
and equitable development
 Principle 9: Businesses should engage with and provide
value to their customers and consumers in a
responsible manner
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Guidance on Implementation
 Leadership
 Integration
 Engagement
 Reporting
 Determining a Business Case
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Application of NVGs to MSMEs
 Supply chain
 Globalization
 Multiplicity of prevailing codes is a challenge
 Multi pronged approach suggested:
 1) Facilitating MSMEs to recognise the business case for
adopting Responsible Business practices
 2)Preference by public agencies and large players in
value chains to MSMEs that follow BR practices
 3)Handholding MSMEs during the adoption of the
NVGs
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Annual Business Responsibility Report
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Section A: General Information about the Company
Section B: Financial Details of the Company
Section C: Other Details
Section D: Business Responsibility Information
Section E: NVG Principle-wise Performance
SEBI directive
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Objectives of the ABRR
• Help companies to understand the ethos of NVG in
context of implementation
• Help companies establish internal processes as well as
identify deficiencies
• Assist in providing aggregated data on corporate BR
performance to aid policy formulation/research
• Assist the stakeholders to review/assess BR
performance
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Business Case Matrix
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Revenue growth and market access
Cost savings and productivity
Access to capital
Risk management/license to operate
Human capital
Brand value/reputation
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Resources
 Global Reporting Initiative (GRI) G3 Guidelines
 Final Draft ISO 26000
 Corporate Responsibility: Private Initiatives and Public
Goals by OECD
 Universal Declaration of Human Rights
 Constitution of India
 Guidelines on CSR for CPSEs
 Agenda for Affirmative Action by FICCI
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List of Relevant Laws & Acts Mapped
 Indicative
 For e.g.. Equal Remuneration Act 1976 relevant to
Principle 1, Principle 3 and Principle 5
 Legal CSR Framework
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Suggested Description and Explanation of Terms
 Vulnerable and Marginalised Groups – include women
and girls, people with disabilities, children, tribal's,
migrants and migrant workers
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Next Steps
 Mainstreaming through advocacy and capacity building
activities
 Formulation of sector specific guidelines
 Coordination and integration of guidelines of all
Ministries
 Annual Business Responsibility Report uptake by
Ministry of Corporate Affairs
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Contact:
chetnakaura.iica@hotmail.com
chetnakaura@iica.in
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Annual Business Responsibility Report (ABRR)
Section A: General Information about the Company
 Corporate Identity Number (CIN) of the Company
 Name of the Company
 Registered address
 Website
 e-mail id
 Financial Year reported
 Sector(s) that the Company is engaged in (industrial activity code-wise)
 List three key products/services that the Company manufactures/provides (as in
balance sheet)
 Total number of locations where business activity is undertaken by the Company
 Number of International Locations (Provide details of major 5)
 Number of National Locations
 Markets served by the Company
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Section B: Financial Details of the Company
 Paid up Capital (INR)
 Total Turnover (INR)
 Total profit after taxes (INR)
 Total Spending on Corporate Social Responsibility (CSR)
• In terms of Section 135 of Company’s Bill, 2011 (INR)
• As percentage of profit after tax (%)
 List the activities as per Schedule VII of Company’s Bill, 2011 in which expenditure
in 4 above has been incurred.
a.
b.
c.
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Section C: Other Details
 Does the Company have any Subsidiary Company/ Companies?
 Do the Subsidiary Company/Companies participate in the BR Initiatives of the
parent company? If yes, then indicate the number of such subsidiary company(s)
 Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company
does business with, participate in the BR initiatives of the Company? If yes, then
indicate the percentage of such entity/entities? [ Less than 30%, 30-60%, More
than 60%]
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Section D: BR Information
1. Details of Director/Directors responsible for BR
a. Details of the Director/Director responsible for implementation of the BR
policy/policies
• DIN Number
• Name
• Designation
b. Details of the BR head
S.No.
1.
2.
3.
4.
5.
Particulars
DIN Number (if applicable)
Name
Designation
Telephone number
e-mail id
Details
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2. Principle-wise (as per NVGs) BR Policy/Policies (Reply in Y/N)
S.No.
1.
Questions
9.
Do you have a policy/policies for....
Has the policy being formulated in consultation with the relevant
stakeholders?
Does the policy conform to any national/international standards? If yes,
specify? (50 words)
Has the policy being approved by the Board? Is yes, has it been signed by
MD/owner/CEO/appropriate Board Director?
Does the company have a specified committee of the Board/ Director/Official
to oversee the implementation of the policy?
Indicate the link for the policy to be viewed online?
Has the policy been formally communicated to all relevant internal and
external stakeholders?
Does the company have in-house structure to implement the policy/policies.
Does the Company have a grievance redressal mechanism related to the
policy/policies to address stakeholders’ grievances related to the
policy/policies?
10.
Has the company carried out independent audit/evaluation of the working of
this policy by an internal or external agency?
2.
3.
4.
5.
6.
7.
8.
P
P
P
P
P
P
P
P
P
1
2
3
4
5
6
7
8
9
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2a. If answer to S.No. 1 against any principle, is ‘No’, please explain why: (Tick up to 2
options)
S.No.
Questions
P
P
P
P
P
P
P
P
P
1
2
3
4
5
6
7
8
9
The company has not understood the Principles
1.
The company is not at a stage where it finds itself in a
position to formulate and implement the policies on
specified principles
2.
The company does not have financial or manpower
resources available for the task
3.
It is planned to be done within next 6 months
4.
5.
It is planned to be done within the next 1 year
6.
Any other reason (please specify)
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3. Governance related to BR
 Indicate the frequency with which the Board of Directors, Committee of the
Board or CEO to assess the BR performance of the Company. Within 3 months,
3-6 months, Annually, More than 1 year
 Does the Company publish a BR or a Sustainability Report? What is the
hyperlink for viewing this report? How frequently it is published?
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Section E: Principle-wise performance
Principle 1
 Does the policy relating to ethics, bribery and corruption cover only the
company? Yes/ No. Does it extend to the Group/Joint Ventures/
Suppliers/Contractors/NGOs /Others?
 How many stakeholder complaints have been received in the past
financial year and what percentage was satisfactorily resolved by the
management?
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Principle 2
 List up to 3 of your products or services whose design has incorporated social or
environmental concerns, risks and/or opportunities.
i.
ii.
iii.
 For each such product, provide the following details in respect of resource use
(energy, water, raw material etc.) per unit of product(optional):
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Reduction during sourcing/production/ distribution achieved since the
previous year throughout the value chain?
•
Reduction during usage by consumers (energy, water) has been achieved
since the previous year?
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Principle 2
cont’d…
 Does the company have procedures in place for sustainable sourcing
(including transportation)?
If yes, what percentage of your inputs was sourced sustainably?
 Has the company taken any steps to procure goods and services from local &
small producers, including communities surrounding their place of work?
• If yes, what steps have been taken to improve their capacity and capability of
local and small vendors?
 Does the company have a mechanism to recycle products and waste? If yes
what is the percentage of recycling of products and waste (separately as <5%,
5-10%, >10%).
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Principle 3
 Please indicate the Total number of employees
 Please
indicate
the
Total
number
of
employees
hired
on
temporary/contractual/casual basis
 Please indicate the Number of permanent women employees
 Please indicate the Number of permanent employees with disabilities
 Do you have an employee association that is recognized by management.
 What percentage of your permanent employees is members of this recognized
employee association?
 Please indicate the Number of complaints relating to child labour, forced labour,
involuntary labour, sexual harassment in the last financial year and pending, as on the
end of the financial year.
S.No.
Category
1.
Child labour/forced labour/involuntary labour
2.
Sexual harassment
3.
Discriminatory employment
No of complaints filed during the
financial year
No of complaints pending
as on end of the financial
year
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Principle 3
cont’d……
 What percentage of your under mentioned employees were given safety & skill upgradation training in the last year?
•
•
•
•
Permanent Employees
Permanent Women Employees
Casual/Temporary/Contractual Employees
Employees with Disabilities
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Principle 4
 Has the company mapped its internal and external stakeholders? Yes/No
 Out of the above, has the company identified the disadvantaged, vulnerable &
marginalized stakeholders.
 Are there any special initiatives taken by the company to engage with the
disadvantaged, vulnerable and marginalized stakeholders.
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Principle 5
 Does the policy of the company on human rights cover only the company or extend
to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others?
 How many stakeholder complaints have been received in the past financial year
and what percent was satisfactorily resolved by the management?
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Principle 6
 Does the policy related to Principle 6 cover only the company or extends to the
Group/Joint Ventures/Suppliers/Contractors/NGOs/others
 Does the company have strategies/ initiatives to address global environmental issues such
as climate change, global warming, etc.? Y/N. If yes, please give hyperlink for webpage etc.
 Does the company identify and assess potential environmental risks? Y/N
 Does the company have any project related to Clean Development Mechanism? If Yes,
whether any environmental compliance report is filed?
 Has the company undertaken any other initiatives on – clean technology, energy efficiency,
renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc.
 Are the Emissions/Waste generated by the company within the permissible limits given by
CPCB/SPCB for the financial year being reported?
 Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not
resolved to satisfaction) as on end of Financial Year.
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Principle 7
 Is your company a member of any trade and chamber or association? If Yes, Name
only those major ones that your business deals with:
i.
ii.
iii.
iv.
 Have you advocated/lobbied through above associations for the advancement or
improvement of public good? Yes/No; if yes specify the broad areas ( drop box:
Governance and Administration, Economic Reforms, Inclusive Development
Policies, Energy security, Water, Food Security, Sustainable Business Principles,
Others)
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Principle 8
 Does the company have specified programmes/initiatives/projects in pursuit of the
policy related to Principle 8? If yes details thereof.
 Are the programmes/projects undertaken through in-house team/own
foundation/external NGO/government structures/any other organization?
 Have you done any impact assessment of your initiative?
 What is your company’s direct contribution to community development projectsAmount in INR and the details of the projects undertaken.
 Have you taken steps to ensure that this community development initiative is
successfully adopted by the community? Please explain in 50 words, or so.
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Principle 9
 What percentage of customer complaints/consumer cases are pending as on the
end of financial year.
 Does the company display product information on the product label, over and
above what is mandated as per local laws? Yes/No/N.A. /Remarks(additional
information)
 Is there any case filed by any stakeholder against the company regarding unfair
trade practices, irresponsible advertising and/or anti-competitive behaviour
during the last five years and pending as on end of financial year.
 Did your company carry out any consumer survey/ consumer satisfaction trends?
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The Business Case for following the Guidelines for the Social Environmental and Economic
Responsibilities for Business
Principle
Revenue
growth
and
market
access
1. Ethics transparency, New customers
Business Partner
transparency
choice
2. Safe and sustainable New customers
goods and Services Customer loyalty
Cost
Access to
savings and capital
productivity
Reduced cost
of of ambiguity
Reduced
litigation
Efficiency
gains across
the value
chain –
procurement
production
distribution
after-sales
Risk
Human
Management capital
/ license to
operate
Brand value/
reputation
Attractive to
investors,
banks
Attractive to
financial
markets
Positively seen Attract and
by
retain
communities,
employees
NGOs, local
governments
regulators
Positively seen
by customers,
regulators,
Media
Investors feel
assured that
liability issues
are
minimized.
Sustainable
production
attracts
Reduced risk of
action from
regulators and
NGOs
Better brand
identity
New found
USP
Employee
morale is high
due to
working
to
improve the
quality of
life of
customers/
Community
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Principle
3.
Well-being
employees
Revenue
growth
and
market
access
Cost
savings and
productivity
Access to
capital
of Business Partner of Increased
choice
productivity
High morale
Less
absenteeism
To Efficiency
4. Responsiveness to all Responsive
customer demands gains across
stakeholders
needs wants leads to
increase in
Market share; The
ability
to function in the
long term is improved
to
being
responsiveness
the value
chain –
procurement
production
distribution aftersales
Attractive to
investors,
banks
Attractive to
financial
markets
Risk
Human
Management capital
/ license to
operate
Brand value/
reputation
Improved labour
relations leading
to
less disruptions
Employer of
choice
Attract and
retain
employees
Reduced
tardiness &
absenteeism
Positively seen People
by
drawn to
communities,
work for a
NGOs, local
sensitive
governments
employer
regulators
Positively seen
by customers,
regulators media
Ehances
corporate
cache
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Principle
5.
Revenue
growth
and
market
access
Promoting Human Business
partner of
rights
6. Protecting the
Environment
Cost
savings and
productivity
Access to
capital
Minimized
litigation
Attractive to
investors,
banks
Attractive to
financial
markets
Risk
Human
Management capital
/ license to
operate
Positively seen
by
choice
communities
and
NGOs
Lower risk of
noncompliance
Business partner of Lower operating Attractive to Positively seen
Choice Sustainability costs in the long investors,
by
oriented buyers will term
banks
communities
prefer to deal with
Less danger of Attractive to NGOs, local
organization
externalities”
financial
governments,
emerging
as markets
regulators
liabilities
Lower risk of
noncompliance
Employees/
talent
attracted by
firm that is
committed
to the
dignity of
all.
Talent is drawn
to the firm
due to its
Commitment
to the wellbeing of the
planet.
Brand value/
reputation
Positively seen
by customers,
regulators media
Positively seen
by customers,
regulators,
media
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Principle
7. Responsible
policy advocacy
Revenue growth
and market
access
Cost
Access to
savings and capital
productivity
Risk Management/ Human Brand value/
license to operate
capital reputation
Growth stimulated
due to openness
and trust
Blunt
the
possibility of
others using
policy to
stymie
business
Positively seen by civil People
society
drawn to
work for
an open
firm.
8. Supporting inclusive New
Market
development
Customers New models
expansion will emerge to
Innovative
thinking impact cost
stimulated
savings
9. Providing value
to customer
New customers
Customer loyalty
New markets
brought into
fold
Openness
will attract
investors
committed
to
good
governance
Newer
sources of
funding
such
as
social
venture
funds
Investors
back
a
growing
firm
Positively seen
by
customers,
regulators,
media
Enhanced
governmental
support to initiatives cordial relations with
stakeholders conducive
for business growth.
Potential Positively seen
source of by customers,
Trained regulators, media
employe
es
Lower risk of
consumer action
Talent
will be
drawn
towards
Growing
firm
Customers
perceive brand
and firm
Favorably
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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.
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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
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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
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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
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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
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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
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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
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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
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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.
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