The Central government on Wednesday introduced new guidelines in line with the United Nations Guiding Principles on Business and Human Rights, which urge companies to be responsible and sustainable. The National Guidelines on Responsible Business Conduct urge businesses to conduct and govern themselves with integrity in a manner that is ethical, transparent and accountable.
According to these guidelines, businesses should provide goods and services in a manner that is sustainable and safe. They should respect and promote the well-being of all employees, including those in their value chains. The guidelines say that businesses should respect the interests of and be responsive to all their stakeholders. They should respect and promote human rights.
Businesses should respect and make efforts to protect and restore the environment. While engaging in influencing public and regulatory policy, they should do so in a manner that is responsible and transparent. Businesses should promote inclusive growth and equitable development. They should engage with and provide value to their consumers in a responsible manner, the guidelines say.
The Ministry of Corporate Affairs is also in the process of developing a national action plan on business and human rights in consultation with various ministries and state governments by 2020. According to an official statement, the Ministry of Corporate Affairs has for long been taking various initiatives for ensuring responsible business conduct by companies.
As a first step towards mainstreaming the concept of business responsibility, the Voluntary Guidelines on Corporate Social Responsibility were issued in 2009. They were revised as National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business in 2011 after extensive consultations with business, academia and civil society organisations. The guidelines were made based on India's socio-cultural context and priorities as well as global best practices. Some of these include the thrust of Companies Act 2013 on businesses to be more mindful of their stakeholders.
In 2012, the Securities and Exchange Board of India (SEBI) through its listing regulations mandated top 100 listed entities by market capitalisation to file business responsibility reports from an environmental, social and governance perspective. This was extended to the top 500 companies in 2015-16. Non-financial reporting is increasingly forming the basis for enhancing investor confidence in businesses and increasing their creditworthiness.