The Ministry of Corporate Affairs has 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. These were guidelines and were voluntary. The objective was to incorporate (a) Care for all stakeholders (b) Ethical functioning (c) Respect for workers right and welfare (d) Respect for human rights (e) Respect for environment (f) Activities for social and inclusive development. The idea was to formulate policies, implement them, and have the stakeholders buy in, share knowledge and experience. No amount was specified.
These guidelines were subsequently revised as ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011. This revised guideline dropped the word ‘Corporate’ and included the word ‘National’. The logic extended was that MNC’s operating in India or Indian MNC’s operating outside India, should be able to showcase Indian values for Social, Environmental and Economic welfare. From earlier six main focus areas, these were increased to nine. It was a very well drafted and thought out document. It further defined the implementation of principles and core elements. These were made ‘size neutral’ and hence made applicable to MSME’s as well. Reporting was defined. Those that were reporting in the International arena were required to submit the same report, provided these ‘nine’ essentials were covered. Hence, the message that they could not pick and choose, but have to deliver in entirety. Detailed formats were provided covering each aspect of the ‘nine principles’.
If you notice, CSR as we understand today was divorced from the original thinking and brought on to center stage with specific guidelines on amount, reporting, etc.
The Securities and Exchange Board of India (SEBI) through its ‘Listing Regulations’ in 2012 mandated the top 100 listed entities by market capitalization to file Business Responsibility Reports (BRRs) from an environmental, social and governance perspective. This was extended to top 500 companies in FY 2015-16.
In 2019, there has been another change the guidelines have been renamed ‘National Guidelines on Responsible Business Conduct’. A lot of detailing has been done of the same ‘nine principles’.
We studied five large corporates, Indian MNC’s, Non-Indian MNC’s, and find a wealth of information on how the corporates are making a conscious effort by using both CSR funds and social initiatives to improve both social and economic environment. It is high time the government released similar data to match with how they have contributed to the same. In time of increase in gap between the have and have not, the impact of such contribution should be felt in the general environment and we would not be left gasping for breath in the highly polluted atmosphere.
