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National Guidelines on Responsible Business Conduct.
March, 19th 2019
National Guidelines
  on responsible
 Business conduct

        Government of India
    National Guidelines
Responsible Business Conduct

       Technical support provided by

   Table of Contents
Message: Hon'ble Prime Minister, Government of India5

Foreword: Union Minister of Finance and Corporate Affairs6

Description and Explanation of Terms7

Chapter 1: Introduction11

Chapter 2: Core Elements14


Annexure 1: Guidance on Adoption of NGRBC30

Annexure 2: Guidance for Micro, Small and Medium Enterprises35

Annexure 3: Business Responsibility Reporting Framework38

Annexure 4: SDGs Mapped Against NGRBC Principles50

Annexure 5: Business Case Matrix52

Annexure 6: Guidance for Businesses on Using the BRRF as a Self-
Assessment Tool53

Annexure 7: Indian Laws Principles (Indicative)55

Annexure 8: Resources59

                              National Guidelines on Responsible Business Conduct   3
                               Prime Minister of India

Our motto, Sabka Saath Sabka Vikas has been the cornerstone for pursuing welfare for all
by ensuring that the benefits of good governance reach everyone. Business has primarily
been seen as wealth creators for their shareholders, but it has the potential to go beyond
that and induce inclusive socio-economic transformation. The Gandhian philosophy of
trusteeship captures the business responsibility towards society.

The philosophy of giving back to the society has been an integral part of the culture,
which has also been imbibed in traditional Indian businesses since time immemorial. In
order to integrate this into the core business philosophy, the Government has obligated
companies to take responsibility for the society by incorporating it as part of the fiduciary
duties of a director. Besides, this universal obligation across all classes of companies,
those meeting certain threshold in terms of turnover, networth or net profit are obligated
to set apart two per cent of their net profit for corporate social responsibility activities.

Responsible Business Conduct is a globally recognized concept founded on the idea that
businesses can perform better when engaged in re-vitalizing the society from which
they extract resources for production. The National Guidelines on Responsible Business
Conduct, 2018 (NGRBC), which is an improvement over the existing National Voluntary
Guidelines on Social, Environmental & Economic Responsibilities of Business, 2011
(NVGs), are a means of nudging businesses to contribute towards wider development
goals while seeking to maximize their profits. The NGRBC is dovetailed with the United
Nations Guiding Principles on Business & Human Rights (UNGPs). The NGRBC intends to
not just make companies more responsible and accountable but also to create a whole
ecosystem to `Protect1, `Respect1 & `Remedy' as envisaged in the UNGPs.

I sincerely hope that the NGRBC would usher a new philosophy of responsible and
sustainable business.

                                                                          (Narendra Modi)

New Delhi
December 10, 2018

                                  National Guidelines on Responsible Business Conduct           5
                                  NEW DELHI, INDIA-110001

    Hon'ble Union Minister of Finance and Corporate Affairs

    The constitutional vision of our country promotes inclusive growth and sustainable
    development. The challenge is to attain these goals by cautiously balancing
    developmental needs with welfare goals. We have constantly strived to take all
    possible initiatives to lead India to assume a leadership role in the comity of
    nations. However, in the collective journey to achieve global salience, involvement
    of businesses is crucial. The National Guidelines for Responsible Business Conduct,
    2018 (NGRBC) brought out by Ministry of Corporate Affairs are part of government's
    pursuit to equitably deliver benefits of growth by engaging `India Inc.' in the country's
    developmental agenda.

    The NGRBC urge businesses to conduct business responsibly and sustainably and
    also encourage and support their suppliers, vendors, distributors, partners and other
    stakeholders to follow the same principle. The guidelines, articulated as a set of nine
    principles and their attendant core elements enunciate the thrust of the United
    Nation Guiding Principles (UNGPs) on Business and Human Rights and Sustainable
    Development Goals and yet remain true and specific to the Indian context.

    I am sure that in pursuance of these guidelines, Indian businesses shall not only
    gain global prominence but also garner goodwill and growth for their business and
    contribute beneficially to society.

                                                                              (Arun Jaitley)

6     National Guidelines on Responsible Business Conduct
Description and
Explanation of Terms
Some of the key terms used in this document are             Consumer: A person or business that buys
described here. These descriptions are only indicative.     products or services for personal use, resale or use
They have been selected based on a review of Indian         in production and manufacture. It also includes the
and international definitions, and their applicability      user of the product or service other than the buyer.
in the context of these Guidelines.
                                                            Corporate Social Responsibility (CSR): Corporate
Accountable: Being responsible and answerable for           Social Responsibility (CSR) means and includes but
their actions, willing to explain them to others, and       is not limited to (i) Projects or programs relating
taking ownership of all repercussions if so required.       to activities specified in Schedule VII of the Indian
                                                            Companies Act 2013; or (ii) Projects or programs
Circular Economy: This is an alternative to a               relating to activities undertaken by the board of
traditional linear economy (make, use, dispose), in         directors of a company (Board) in pursuance of
which resources are used for as long as possible, the       recommendations of the CSR Committee of the
maximum value is extracted from them whilst in use,         Board as per declared CSR Policy of the company,
after which products and materials are recovered            subject to the condition that such policy will cover
and regenerated at the end of each service life. The        subjects enumerated in Schedule VII of the Act.
idea of a circular economy is called circularity. It is
also referred to as "cradle-to-cradle".                     Disclosure: An organization's practice of reporting
                                                            to all stakeholders on its economic, environmental
Collective Bargaining: Negotiating between                  and social impacts. It also presents the organization's
the employees' organization and employer's                  values and governance model and demonstrates
oorganization; management in good faith with                the link between its strategy and its commitment to
a view to agree on terms and conditions of work             sustainable development.
and / or settlement of disputes and grievances of
employees represented by a representative body of           Discrimination: Unjust or prejudicial treatment of
employees                                                   people, especially on the grounds of, but not limited
                                                            to, caste, creed, sex, race, ethnicity, age, colour,
Complicity: Refers to involvement of the business in        religion, disability, socio-economic status or sexual
violations of any of the Principles and Core Elements       orientation.
by third parties connected with its operations. It is
generally made up of the following:                         Diversity: An understanding that every individual
                                                            is unique and therefore embracing and respecting
·   An action or omission (failure to act) by a business,   the differences on account of, but not limited
    or individual representing a business, that `helps'     to, caste, creed, sex, race, ethnicity, age, colour,
    (facilitates, legitimize, assists, encourages, etc.)    religion, disability, socio-economic status or sexual
    another, in some way, to perpetrate a violation;        orientation.
·   The business was or should have been aware              Employee: A person employed, directly or by or
    that its action or omission could provide such          through any agency (including a contractor), whether
    help;                                                   for remuneration or not, for carrying out activities of
·   Complicity may be direct, beneficial or silent.         the organization or any part thereof, incidental to or

                                                National Guidelines on Responsible Business Conduct          7
connected with those activities, in pursuance of the      perpetuator knows or ought to know is threatening
organization's stated objectives. It would also include   or disturbing.
those who undertake these activities outside of the
business's premises including their own homes.            Intellectual Property (IP): Refers to creations of
                                                          the mind, such as inventions, literary, musical and
Equity: An approach which recognizes the need,            artistic works, and symbols, names, images, and
plans and delivers a fair and equivalent opportunity      designs used in commerce, for which the IP owners
across stakeholders to engage gainfully from their        are granted certain exclusive rights under the
interactions with the business.                           corresponding national IP laws. Common types of IP
                                                          include patents (inventions), copyrights, trademarks,
Ethical: Individual or collective behaviour that is in    industrial designs, software, geographic indications
accordance with accepted written and / or unwritten       and trade secrets, etc.
codes of principles and values that govern decisions,
actions and conduct within a business in the context      Involuntary Labour: All work or service that
of a particular situation and is consistent with          is extracted under the menace of penalty. Also
accepted norms of behaviour.                              includes terms such as forced labour, bonded labour
                                                          and modern slavery.
Fair Living Wages: A wage sufficient for a family to
meet its basic needs and which provides some ability      Participation of Workers: Situation where
to deal with emergencies.                                 workers are involved in some way in the decision-
                                                          making process of a business organization. Worker
Freedom of Association: Workers and employers,            participation can take many forms. There might be
without distinction whatsoever, have the right            a consultative council in the company where trade
to establish and, subject only to the rules of the        unions and management meet regularly to discuss
organization concerned, to join organizations of their    points of mutual interest. Workers can be organized
own choosing without previous authorization.              in quality circles and meet regularly in small groups
Governance: Relates to "how" an organization makes        to discuss ways in which their work could be better
decisions, how it operates to achieve its objectives      organized.
and how stakeholders have their say in the processes.     Precautionary Principle: When human activities
Governance Structure: The formalized individual           may lead to morally unacceptable harm that
or group of individuals charged with the ultimate         is scientifically plausible but uncertain, actions
responsibility of oversight of a business. This would     shall be taken to avoid or diminish that harm.
refer to the equivalent of the Board for companies,       Morally unacceptable harm refers to that which
the partners for partnership firms and the owner of       may threaten human health, or is seriously and
the business for sole proprietorships.                    effectively irreversible or inequitable to present or
                                                          future generations, or imposed without sufficient
Grievance Redressal Mechanism: Mechanism                  consideration of the human rights of those affected.
for any stakeholder individually or collectively to
raise and resolve reasonable concerns affecting           Product: Any good and / or service produced for
them without impeding access to other judicial or         introduction to trade or commerce, possessing
administrative remedies. The mechanism should be:         intrinsic value and capable of delivery to a consumer
                                                          in tangible form, intangible form or a combination
·   Clear, transparent and have independent               thereof.
    governance structures
·   Accessible                                            Product Life Cycle: This refers to all the stages of
·   Predictable                                           a product from extraction or acquisition of raw
·   Equitable                                             materials through manufacturing and processing,
·   Based on dialogue and mediation                       distribution and transportation, use and reuse,
                                                          recycling and disposal. In the case of services, it
Harassment: Wide range of offensive behaviour             refers to all activities and processes from the design
that is unwanted by the recipient and which the           to delivery.

    8       National Guidelines on Responsible Business Conduct
Stakeholder: Individual or group concerned or            Value Chain: Refers to both the supply chain as well
interested with or impacted by the activities of the     as the value created by the distribution channel for
businesses and vice-versa, now or in the future.         end-use customers. It also includes business partners
Typically, stakeholders of a business include, but is    and those employed by value chain partners who
not limited to, its investors/shareholders, employees    may work out of their own premises.
(and their families), customers, communities,
value chain members and other business partners,         Vulnerable and Marginalized Groups: Group of
regulators, civil society actors, and media.             individuals who are unable to realize their rights or
                                                         enjoy opportunities due to adverse physical, mental,
Sustainability: The outcome achieved by balancing        social, economic, cultural, political, geographic or
the social, environmental and economic impacts of        health circumstances. These groups in India can be
business. It is the process that ensures that business   identified on the basis, inter alia, of the following:
goals are pursued without compromising any of the
three elements.                                          ·    Gender and transgender (women, girls et al.)
                                                         ·    Age (children, elderly et al.)
Sustainable: Being aligned with the tenet of meeting     ·    Descent/identity/ethnicity (caste, religion,
the needs of the present without compromising the             scheduled castes, scheduled tribes, et al.)
ability of future generations to meet their own needs.   ·    Occupation (displaced, landless small / marginal
                                                              farmers, migrant workers, et al.)
Traditional Knowledge: This refers to any indigenous     ·    Persons with disability
technical, ecological, scientific, medical or cultural   ·    Political or religious beliefs
knowledge which is not necessarily documented
but is in use by or generally known to communities.      Workplace: Place(s) where activities of the
Typical examples include antiseptic properties of        organization are carried out in pursuance of its stated
neem, turmeric, etc.                                     objectives.

Transparent: Being open about decisions and              Work-life balance: Broad concept including proper
activities that affect society, the environment and      balancing of "work" (career and ambition) on one
the economy, and the willingness of businesses to        hand and "life" (pleasure, leisure, family and spiritual
communicate information in clear, accurate, honest,      development) on the other. Related, though broader,
timely and complete manner.                              terms include "lifestyle balance" and "life balance".

                                             National Guidelines on Responsible Business Conduct           9
   Chapter 1:
The Ministry of Corporate Affairs (MCA), Government          Development which established seventeen
of India, released a set of guidelines in 2011 called        Sustainable Development Goals (SDGs),
the National Voluntary Guidelines on the Social,             comprising targets and indicators, as well as
Environmental and Economic Responsibilities of               follow-up and review mechanisms. Significantly,
Business (NVGs). This was expected to provide                the SDGs recognize the role of business as a major
guidance to businesses on what constitutes                   driver for economic growth and infrastructure,
responsible business conduct. In order to align the          whilst explicitly calling for businesses to act
NVGs with the Sustainable Development Goals                  in accordance with the UNGPs. The SDGs are
(SDGs) and the `Respect' pillar of the United Nations        mapped against the NGRBC in Annexure 4.
Guiding Principles (UNGP) the process of revision
of NVGs was started in 2015. After, revision and         3) Paris Agreement on Climate Change (2015):
updation, the new principles are called the National        This is an agreement under the United Nations
Guidelines on Responsible Business Conduct                  Framework for Climate Change (UNFCC) reached
(NGRBC). As with the NVGs, the NGRBC has been               in December 2015, in which countries have
designed to assist businesses to perform above and          committed to take steps to combat climate
beyond the requirements of regulatory compliance.           change and adapt to its effects. India ratified
                                                            the agreement on 2nd October 2016,and
Mandate & Rationale                                         its commitments are called the National
                                                            Determined Contributions (NDCs). The Paris
The primary rationale for the update is to capture          Agreement also constitutes SDG 13.
key national and international developments in
the sustainable development agenda and business          4) Core Conventions 138 and 182 on Child Labour
responsibility field that have occurred since the           by the International Labour Organization
release of the NVGs in 2011. Some of the key drivers        (ILO): India, in June 2017, ratified ILO Core
of the NGRBC are given below:                               Conventions 138 (minimum age of employment
                                                            of children) and ILO Core Convention 182 (worst
1) The UN Guiding Principles for Business and               forms of child labour).
   Human Rights (UNGPs): Through its resolution
   17/4 of 16 June 2011, the UN Human Rights             5) Annual Business Responsibility Reports
   Council endorsed the Guiding Principles on               (ABRRs): In 2012, the Securities Exchange Board
   Business and Human Rights: Implementing the              of India (SEBI) amended the Listing Agreement
   United Nations `Protect, Respect and Remedy'             for companies listed in the stock exchanges in
   Framework. The UNGPs are grounded in                     India, and mandated the submission of an ABBRs
   recognition of, a) the State's existing obligations      by the top 100 listed companies. The ABRR is
   to respect, protect and fulfil human rights and          based on the Business Reporting Framework
   fundamental freedoms; b) the requirement of              of the NVGs, and SEBI has since extended this
   business enterprises to respect human rights,            requirement to the top 500 listed companies.
   and c) the need for access to effective remedy
                                                         6) Companies' Act 2013: Notified in the Gazette
   for those who are affected by adverse business-
                                                            of India on 30 August 2013, Section 135 of
   related human rights impacts or abuse. Since
                                                            the Companies Act 2013 requires companies
   their release, the UNGPs have become the
                                                            to undertake Corporate Social Responsibility
   authoritative global standard for Business and
                                                            (CSR) initiatives in communities, and has since,
   Human Rights. In further support of the UNGPs,
                                                            provided additional rules and guidance on the
   the UN Human Rights Council established
                                                            areas and target groups of such interventions
   the UN Working Group (UNWG) and tasked it
                                                            in consistency with national socio-economic
   with facilitating the global dissemination and
   implementation of the UNGPs. The UNWG has
   strongly encouraged all States to develop a           Applicability
   National Action Plan (NAP) as part of the States'
   responsibility to disseminate and implement the       The NGRBC are designed to be used by all businesses,
   UNGPs.                                                irrespective of their ownership, size, sector, structure
                                                         or location. It is expected that all businesses investing
2) UN Sustainable Development Goals (SDGs):              or operating in India, including foreign multinational
   In September 2015, the UN General Assembly            corporations (MNCs) will follow these guidelines.
   adopted the 2030 Agenda for Sustainable               Correspondingly, the NGRBC also provide a useful

                                             National Guidelines on Responsible Business Conduct           11
framework for guiding Indian MNCs in their overseas       adopt them to demonstrate their commitment to
operations, in addition to aligning with applicable       being a responsible business, and accrue the full
local national standards and norms governing              benefits of sustainable business strategies.
responsible business conduct.
                                                          Content and Structure
Furthermore, the NGRBC reiterate the need to
encourage businesses to ensure that not only do they      The NGRBC consist of two chapters and an expanded
follow these guidelines in business contexts directly     set of annexures. While the Principles have been
within their control or influence, but that they also     updated, they have retained the articulation and
encourage and support their suppliers, vendors,           description of those in the NVGs. The connected
distributors, partners and other collaborators to         Core Elements enhance the operationalization of
follow them.                                              each Principle. The details in the annexures provide
                                                          practical guidance to businesses on the adoption
Responsibility for Adoption                               and implementation of these guidelines. Keeping the
                                                          importance of Micro, Small and Medium Enterprises
Whereas the NVGs made several references to
                                                          (MSMEs) in view, the business case for adoption of
the critical role of the governance structure and
                                                          NGRBC by the MSMEs is given in Annexure 2.
companies' leadership in ensuring adoption and
review of the guidelines, the NGRBC has taken this        An updated Business Responsibility Reporting
requirement a step further by identifying specific        Framework (BRRF) has been included for reporting
aspects of each Principle as part of the duty and         of actions taken by businesses vis-à-vis the Principles
responsibility of the highest governance structure        and Core Elements. The BRRF is meant to serve
of the business to oversee the implementation and         as an internal tool for companies to assess where
adherence to these guidelines in their business.          they are in their journey of responsible business
While the highest governance structure, in the            conduct and identify opportunities for improvement.
case of companies and corporations is the Board,          Guidance on how this framework may be used by
the responsibility for adoption of the NGRBC in           businesses is included as an annexure. Additionally,
proprietorships, partnerships, and other types of         the BRRF can serve as a framework for regulators
business is assumed in the present context to rest with   to develop disclosure formats (e.g. Annual Business
the owner/s, partner/s, and/or, any other structure       Responsibility Report (ABRR) mandated by the
responsible for the highest level of decision-making      Securities and Exchange Bureau of India (SEBI) based
and governance functions in the business.                 on NVGs).

It is worthwhile to emphasize that all Principles of      The last part of the NGRBC contains a set of useful
the NGRBC are equally important, inter-related, inter-    references and resources which businesses may
dependent and non-divisible, and businesses should        consult as part of their implementation efforts.

   12       National Guidelines on Responsible Business Conduct
Chapter 2:
Principles and
Core Elements

                      This chapter contains the nine thematic pillars of
                      business responsibility which are called Principles.
                      Each Principle is introduced as a statement and
                      followed by a narration of the essential aspects of
                      the Principle, referred to as the brief description.
                      A reading of each Principle and brief description
                      should provide a clear idea of the essential spirit and
                      intent of the Principle.

                      Each Principle is accompanied by a set of
                      requirements and actions that are essential to the
                      operationalization of the Principle, referred to as the
                      Core Elements. The information sought in Annexure 3
                      of the Guidelines (Business Responsibility Reporting
                      Framework) is derived from the Core Elements.

                      The Principles are interdependent, interrelated and
                      non-divisible, and businesses are urged to address
                      them holistically. Annexure 1 of the Guidelines
                      provides guidance to all businesses on the adoption
                      and implementation of the Principles. Furthermore,
                      businesses impact different stakeholders in different
                      ways. Therefore, while applying these principles,
                      businesses need to be sensitive to characteristics,
                      such as caste, creed, sex, race, ethnicity, age, colour,
                      religion, disability, socio-economic status or sexual
                      orientation. Though this has not been specifically
                      mentioned in the Principles and Core Elements,
                      businesses are expected to keep this in mind. Most
                      importantly, the ultimate responsibility for adoption
                      of the Principles rests with the highest governance
                      structure of the business.

           National Guidelines on Responsible Business Conduct         13
Principle 1:
Businesses should conduct
and govern themselves with
integrity, and in a manner that
is ethical, transparent, and
Brief Description                                        4.   The Governance Structure should disclose and
                                                              communicate transparently and enable access
This Principle recognizes that ethical behaviour              to information about the policies, procedures,
in all operations, functions and processes, is                performance (financial and non-financial), and
the cornerstone of businesses guiding their                   decisions of their enterprise, that impact their
governance of economic, social and environmental              stakeholders, especially those that are most at
responsibilities.                                             risk to business impacts and communities that
                                                              are vulnerable and marginalized.
The Principle emphasizes that disclosures on business
decisions and actions that impact stakeholders           5.   The Governance Structure should take
form the fundamental basis of operationalizing                responsibility for meeting all its statutory
responsible business conduct and should be                    obligations in line with the spirit of the law,
accessible to all relevant stakeholders.                      enabling fair competition and ensuring it treats
                                                              all its stakeholders in an equitable manner.
It recognizes that businesses are an integral part of
society and that they will hold themselves accountable   6.   The Governance Structure should ensure that
for the effective adoption, implementation, and the           the business avoids complicity with the actions
making of disclosures on their performance with               of any third party that violates any of the
respect to the Core Elements of these Guidelines.             Principles contained in these Guidelines.

The Principle further emphasizes that the governance     7.   The Governance Structure should put in place
structure of the business should ensure this, in line         appropriate structures, policies and procedures
with SDG 16.                                                  to address conflicts of interest involving its
                                                              members, employees and business partners.
Core Elements
                                                         8.   The Governance Structure should put in place
1.   The governance structure should develop and              appropriate structures, codes, policies, and
     put in place structures, policies and procedures         procedures to ensure that the business does not
     that promote this Principle, prevent its                 engage in illegal and abusive practices, bribery
     contravention and effect prompt and fair action          and corruption, and ensure timely and fair
     against any transgressions.                              action in case such transgressions are detected.
2.   The Governance Structure should ensure              9.   The Governance Structure should ensure that
     that the Principles of these Guidelines are              the business contributes to public finances by
     understood, adopted and implemented                      timely and complete payment of all applicable
     throughout the operations of their business.             taxes in the letter and spirit of the laws and
3.   The Governance Structure should also promote             regulations governing such payments.
     the adoption of this Principle across the value
     chain of their business.

                                             National Guidelines on Responsible Business Conduct        15
Principle 2:
Businesses should
provide goods and
services in a manner that
is sustainable and safe.

16   National Guidelines on Responsible Business Conduct
Brief Description                                           Core Elements
This Principle recognizes the proposition of SDG 12,        1. Businesses should, in designing, producing and
that sustainable production and consumption are                making available goods and services, endeavour
interrelated, contribute to enhancing the quality of           to ensure that resource-efficient and low-carbon
life and towards protecting and preserving earth's             processes and technologies are deployed to
natural resources.                                             minimize adverse environmental and social
The Principle further emphasizes that businesses
should focus on safety and resource-efficiency in the       2. Businesses should provide stakeholders across
design and manufacture of their products, and use              the value chain with adequate information
their products in a manner that creates value while            about environmental and social issues and
minimizing and mitigating its adverse impacts on               impacts across product life cycle from design to
the environment and society through all stages of              disposal. This may be done through appropriate
its life cycle, from design to final disposal. Over time,      and relevant tools such as certifications, labels,
businesses should embrace the idea of circularity in           ratings and other communication and disclosure
all its operations.                                            platforms including reports, websites, etc.

In order to do so, the Principle encourages businesses      3. Businesses should increasingly take responsibility
to understand all material sustainability issues across        for the safe collection, reuse and recycling of their
their product life cycle and value chain.                      products at life so as to build a circular economy
                                                               as a part of the notion of extended producer
                                                               responsibility that is increasingly becoming a
                                                               part of regulation in India and globally.

                                                National Guidelines on Responsible Business Conduct          17
Principle 3:
Businesses should
respect and promote
the well-being of all
employees, including
those in their value
Brief Description                                              and provide access to appropriate grievance
                                                               redressal mechanisms.
This Principle encompasses all policies and practices
                                                           4. Businesses should not use child labour, coercive
relating to the equity, dignity and well-being, and
                                                              or forced labour, or any form of involuntary
provision of decent work (as indicated in SDG 8), of all
                                                              labour, paid or unpaid.
employees engaged within a business or in its value
chain, without any discrimination and in a way that        5. Businesses should put systems and processes in
promotes diversity. The principle recognizes that the         place to support the work-life balance of all its
well-being of an employee also includes the well-             employees.
being of her/his family.
                                                           6. Businesses should ensure fair, timely and
Core Elements                                                 transparent payment of statutory wages of all its
                                                              employees, including contract and casual labour
1. The Governance Structure should ensure
                                                              without discrimination.
   that the business complies with all regulatory
   requirements pertaining to its employees, and           7. Businesses should aspire to pay fair living wages
   that there are systems and processes in place to           to meet basic needs and economic security of all
   enable this to be done by its value chain partners.        employees, including casual and contract labour.
2. Businesses should ensure equal opportunities            8. Businesses should provide a workplace
   at the time of recruitment, during the course              "environment that is safe, hygienic, accessible
   of employment, and at the time of separation               to the" - there is no space between the words
   without any discrimination.                                differently abled and which upholds the dignity
                                                              of the employees. Businesses should engage and
3. Businesses should promote and respect the
                                                              consult with their employees on this provision.
   right to freedom of association, participation
   of workers, and collective bargaining of all            9. Businesses     should    ensure   continuous
   employees including contract and casual labour,            upgradation of skill and competence of all
                                                              employees by providing access to necessary
                                                              learning opportunities, on an equal and non-
                                                              discriminatory basis. They should promote
                                                              career development through human resource

                                                           10. Businesses should create systems and practices
                                                               to ensure a humane workplace free from,
                                                               violence and harassment (including sexual
                                                               harassment); a workplace where employees feel
                                                               safe and secure, with adequate provisions for
                                                               grievance redressal.

                                               National Guidelines on Responsible Business Conduct       19
Principle 4:
Businesses should
respect the interests of
and be responsive to all its
Brief Description                                          Core Elements
This Principle recognizes that businesses operate in       1. Governance Structures should ensure that the
an eco-system comprising a number of stakeholders,            business acknowledges, assumes responsibility,
beyond shareholders and investors, and that                   and is transparent about the impact of their
their activities impact natural resources, habitats,          policies, decisions, products and associated
communities and the environment.                              operations on all stakeholders, and the natural
The Principle acknowledges that it is the responsibility
of businesses to ensure that the interests of all          2. Businesses should develop systems, processes
stakeholders, especially those who may be vulnerable          and mechanisms to identify its stakeholders,
and marginalized, are protected.                              understand their expectations and concerns,
                                                              define the purpose and scope of the engagement,
The Principle further recognizes that businesses have         consult with them in developing policies and
a responsibility to maximize the positive impacts             processes that impact them, and commit
and minimize and mitigate the adverse impacts of              to resolving any differences and redressing
its products, operations, and practices on all their          grievances in a just, fair and constructive manner.
                                                           3. Businesses should enable all stakeholders to
                                                              benefit fairly from the value generated by the
                                                              businesses, and any conflicts or differences
                                                              arising from the impact of business operations
                                                              or the sharing of the value generated by the
                                                              businesses should be resolved in a just, fair and
                                                              equitable manner.

                                               National Guidelines on Responsible Business Conduct         21
Principle 5:
Businesses should
respect and
promote human

22   National Guidelines on Responsible Business Conduct
Brief Description                                            Core Elements
This Principle recognizes that human rights are rights       1. The Governance Structure should ensure that
inherent to all human beings, and that everyone,                the business undertakes to make its employees
individually or collectively, is entitled to these rights,      aware of the human rights content of the
without discrimination. It further recognizes that              Constitution of India, relevant national laws and
human rights are inherent, inalienable, interrelated,           policies, and the International Bill of Human
interdependent and indivisible.                                 Rights and their application to businesses as
                                                                outlined in the United Nations Guiding Principles
The Principle is inspired, informed and guided by               for Business and Human Rights. It should further
the Constitution of India and the International Bill of         ensure that the responsibility for addressing
Rights and recognizes the primacy of the State's duty           such impacts is assigned to the appropriate level
to protect and fulfil human rights.                             and function within the business.
The Principle is further informed and guided by the          2. The Governance Structure should ensure that
UN Guiding Principles on Business and Human Rights              the business has in place such policies, structures
in its articulation of the responsibility of businesses to      and procedures that demonstrate respect for the
respect human rights. It affirms that the responsibility        human rights of all stakeholders impacted by its
of businesses to respect human rights requires that             business. This includes carrying out human rights
it avoids causing or contributing to adverse human              due diligence to identify, prevent, mitigate and
rights impacts, and that it addresses such impacts              account for how they address adverse human
when they occur. The Principle urges businesses to              rights impacts.
be especially responsive to such persons, individually
or collectively, who are most vulnerable to, or at risk      3. The Governance Structure should ensure that
of, such adverse human rights impacts.                          their business, where it is causing, contributing
                                                                or otherwise linked to adverse human rights
                                                                impacts, takes corrective actions to address such

                                                             4. Businesses should promote the awareness and
                                                                realization of human rights across its value chain.

                                                             5. Businesses should ensure that all individuals
                                                                and groups whose human rights are impacted
                                                                by them have access to effective grievance
                                                                redressal mechanisms.

                                                 National Guidelines on Responsible Business Conduct         23
Principle 6:
Businesses should
respect and make efforts
to protect and restore the

24   National Guidelines on Responsible Business Conduct
Brief Description                                           1. The Governance Structure should ensure that
                                                               the business formulates appropriate policies,
This Principle recognizes that environmental                   procedures and structures to assess, measure
responsibility is a prerequisite for sustainable               and address its adverse impacts on the
economic growth and for the well-being of society.             environment at all its locations, at all stages of its
                                                               life cycle from establishment to closure. Special
The Principle emphasizes that environmental issues             care should be taken where these impacts occur
are interconnected at the local, regional and global           in eco-sensitive areas.
levels, which makes it imperative for businesses to
address issues like pollution, biodiversity conservation,   2. Businesses should develop appropriate
sustainable use of natural resources and climate               strategies for sustainable and efficient use of
change (mitigation, adaptation and resilience) in a            natural resources and manufactured materials,
just, comprehensive and systematic manner. These are           giving due consideration to expectations and
aligned with SDGs 11, 13, 14 and 15.                           concerns of all stakeholders.

The Principle encourages businesses to assess               3. Businesses should define measurable key
environment impacts of its products and operations             performance indicators and targets to monitor
and take steps to minimize and mitigate its adverse            their performance on environmental aspects
impacts where these cannot be avoided.                         such as water, air, land-use, forest, energy,
                                                               materials, waste, biodiversity, built environment
The Principle encourages businesses to adopt                   and so on.
environmental practices and processes that minimize
or eliminate the adverse impacts of its operations          4. Businesses should focus on addressing climate
and across the value chain.                                    change through development of both mitigation
                                                               and adaptation measures, and build climate
The Principle encourages businesses to follow the              resilience and in line with India's Nationally
Precautionary Principle in all its actions.                    Determined Contributions to the Paris Climate
Core Elements                                                  Change Agreement and the National/State
                                                               Action Plans on Climate Change.

                                                            5. Businesses should learn from industry best
                                                               practices for promoting reduction, reuse,
                                                               recycling and recovery of material and resources,
                                                               and encourage and motivate its stakeholders,
                                                               particularly consumers and business partners, to
                                                               do the same.

                                                            6. Businesses should seek to improve their
                                                               environmental performance by adopting
                                                               innovative, resource-efficient and low-carbon
                                                               technologies and solutions resulting in lower
                                                               resource footprint, lesser material consumption
                                                               and more positive impact on environment,
                                                               economy and society.

                                                National Guidelines on Responsible Business Conduct           25
Principle 7:
Businesses, when engaging
in influencing public and
regulatory policy, should
do so in a manner that is
responsible and transparent.

26   National Guidelines on Responsible Business Conduct
Brief Description                                         Core Elements
This Principle recognizes that businesses operate         1. The Governance Structure should ensure that
within specified national and international legislative      its advocacy positions are consistent with the
and policy frameworks, which guide their growth              Principles contained in these Guidelines and
and also provide for certain desirable restrictions and      publicly disclosed.
                                                          2. Businesses should, to the extent possible,
The Principle recognizes the legitimacy of businesses        undertake policy advocacy through trade and
to engage with governments for redressal of a                industry chambers and associations, and other
grievance or for influencing public policy.                  similar collective platforms.

The Principle emphasizes that public policy advocacy      3. Businesses should ensure that its policy advocacy
must expand public good.                                     positions promote fair competition and respect
                                                             for human rights.

                                              National Guidelines on Responsible Business Conduct       27
Principle 8:
Businesses should promote
inclusive growth and equitable

28   National Guidelines on Responsible Business Conduct
Brief Description                                         Core Elements
This Principle recognizes the challenges of social and    1. The Governance Structure shall ensure that
economic development faced by India, and builds              the business takes appropriate actions to
upon the national and local development agenda as            minimize any adverse impacts that it has on
articulated in government policies and priorities. This      social, cultural and economic aspects of society
is particularly significant in zones affected by social      including arising from land acquisition and use,
disharmony and low human development.                        construction of facilities and operations.

The Principle recognizes the value of the energy and      2. Businesses should assess, measure and
enterprise of businesses and encourages them to              understand their impact on social, and economic
innovate and contribute to the overall development           development, and respond through appropriate
of the country with a specific focus on disadvantaged,       action to minimize and mitigate its negative
vulnerable and marginalized communities, as                  impacts on society.
articulated in Section 135 of the Companies Act,
2013.                                                     3. Businesses should innovate and invest in
                                                             products, technologies and processes that
The Principle also emphasizes the need for                   promote the well-being of all segments of
collaboration amongst businesses, government                 society, including vulnerable and marginalized
agencies and civil society in furthering this                groups.
development agenda in line with SDG 17.
                                                          4. Businesses should respond to national and
The Principle reiterates that business success,              local development priorities and understand
inclusive growth and equitable development are               the needs and concerns of local communities,
interdependent.                                              particularly vulnerable and marginalised
                                                             groups and in regions that are underdeveloped,
                                                             while designing and implementing their CSR

                                                          5. Businesses should make efforts to minimize the
                                                             negative impacts of displacement of people
                                                             and disruption of livelihoods through their
                                                             business operations and where displacement is
                                                             unavoidable, this process must be undertaken
                                                             in a humane, participative, informed and
                                                             transparent manner, where just and fair
                                                             compensation is paid to those impacted.

                                                          6. Businesses should respect all forms of intellectual
                                                             property and traditional knowledge and make
                                                             efforts to ensure that benefits derived from their
                                                             knowledge are shared equitably.

                                              National Guidelines on Responsible Business Conduct         29
Principle 9:
Businesses should
engage with and provide
value to their consumers
in a responsible manner.

30   National Guidelines on Responsible Business Conduct
Brief Description                                        Core Elements
This Principle is based on the fact that the basic aim   1. Governance Structures should ensure that the
of a business entity is to provide goods and services       business minimizes and mitigates any adverse
to its consumers that are safe to use, and in a manner      impact of its goods and services on consumers,
that creates value for both. .                              the natural environment and society at large.

The Principle recognizes that consumers have the         2. Businesses should ensure that they do not restrict
freedom of choice in the selection and usage of             the freedom of choice and free competition in
goods and services, and that the enterprises will           any manner while designing, promoting and
strive to make available products that are safe,            selling their products.
competitively priced, easy to use and safe to dispose
of, for the benefit of their consumers.                  3. Businesses should disclose all information
                                                            accurately, through labelling and other means,
The Principle also recognizes that businesses               including the risks to the individual, to society,
should play a key role, along with other relevant           and to the planet, from the use of the products,
stakeholders, in mitigating the adverse impacts that        so that the consumers can exercise their freedom
excessive consumption of its products may have on           to consume in a responsible manner.
the overall well-being of individuals, society and our
planet, in line with SDG 12.                             4. Businesses should manage consumer data in a
                                                            way that does not infringe upon their right to

                                                         5. Businesses should make consumers aware of,
                                                            and provide information and guidance to them
                                                            on, safe and responsible usage and disposal of
                                                            their products (including reuse and recycling),
                                                            and to eliminate over-consumption.

                                                         6. Businesses should promote and advertise their
                                                            products in ways that do not mislead or confuse
                                                            the consumers or violate any of the Principles in
                                                            these Guidelines.

                                                         7. Businesses should provide appropriate grievance
                                                            redressal mechanisms that are transparent and
                                                            accessible, to address consumer concerns and

                                                         8. Businesses that provide essential services, e.g..
                                                            utilities, should enable universal access, including
                                                            to those whose services have been discontinued
                                                            for any reason, in a non-discriminatory and
                                                            responsible manner.

                                             National Guidelines on Responsible Business Conduct          31

32   National Guidelines on Responsible Business Conduct
Annexure 1:
Guidance on Adoption of NGRBC
What does adoption mean?                                    demonstrating the business benefit of being
The Principles and Core Elements contained in the
NGRBC are designed to enable businesses to conduct       · Employee engagement: The employees too
themselves responsibly. Therefore, adopting these          must be convinced of the need to be
guidelines refers to the integration of the Principles     responsible. Again, the Governance Structure
and Core Elements into the core business strategy          and top management must communicate
and operations of an enterprise including its value        this to all employees so that the Principles are
chain.                                                     fully understood across the organization and
So, how will the Governance Structure of a business        comprehensively implemented.
know whether it has successfully integrated these
                                                         · Stakeholder engagement: Recognizing that
NGRBC? Here are some indicators:
                                                           all stakeholders play a crucial role in a business's
· It should have in place, policies and guidance that      success, the top management of the company
  are approved at the highest level and cover all the      must map out its stakeholders and proactively
  Principles.                                              engage and build strong relationships with them
· The key performance indicators of the business           on a consistent and continuous basis.
  should incorporate all the Principles of the NGRBC     · Disclosure and reporting: In addition to
  and those Core Elements that significantly impact        engaging with stakeholders including employees,
  or are impacted by the business.
                                                           the proactive public disclosure by companies of
· The operating procedures of the business should          their impact on society and the environment is
  also cover those Core Elements that significantly        also essential.
  impact or are impacted by the business.
                                                         The Business Case for Adoption
The Business Responsibility Reporting Framework
                                                         That businesses are expected to conduct
(BRRF) provided in Annexure 3 of these guidelines
is designed as an internal tool to help businesses       themselves responsibly is an essential component
determine how well aligned they are to the NGRBC.        of the social contract between businesses
                                                         and society. Increasingly, businesses are also
Key Enablers                                             recognizing that responsible business conduct
Experience suggests that there are some key enablers     provides benefits to both the business and society
of businesses that help them successfully integrate      in the short term as well as in the long term. To help
sustainability principles into their core processes.     businesses determine these benefits, they may use
These include:                                           a tool called the Business Case Matrix, provided in
· Leadership commitment: The Governance                  Annexure 5. Every business can develop such a
  Structure of the business (Board in the case of        matrix, in its own context, for each Core Element,
  companies, owner(s)/partner(s) in other forms)         and thus determine which of them are a relatively
  needs to be convinced that the success of the          higher priority to the business. However, as stated
  business depends upon adopting the NGRBC. The          earlier, the Principles detailed in these guidelines
  Chairman/CEO/Owner-Manager needs to play               are interdependent, interrelated and non-
  a proactive role in convincing the Governance          divisible, and responsible businesses are expected
  Structure, which is most effectively done by           to adhere to all the Principles and Core Elements.

                                             National Guidelines on Responsible Business Conduct         33
                      ·   Vision, mission and values
                      ·   Business success factors
        Prioritize    ·   Material sustainability issues
          Core        ·   Laws, regulations, global covenants and good practices

                      ·   Map current policies, processes, guidelines vis-a-vis prioritized Core Elements
                      ·   Develop new policies where there are gaps (in consultation with stakeholders)
        Review and    ·   Get policies endorsed by the Governance Structure

                      ·   Determine performance level for each prioritized Core Element
                      ·   Two performance levels suggested in the Guidelines: Essential and Leadership

                      ·   Select indicators for each prioritized Core Element that reflects the ambition
                      ·   Set targets for each indicator / issue
        Set Targets

The Adoption Process                                               material sustainability issues must be treated
                                                                   as high priority. In cases where the business
The flowchart given below summarizes the process
                                                                   has not undertaken its own materiality
businesses may follow to adopt the NGRBC and
                                                                   assessment, it should go by suggestions
integrate them with the core business.
                                                                   found in globally accepted guidelines.
Some of the key steps are described in greater detail
                                                              4. Legal and voluntary compliances: Every
                                                                 business must know the specific laws and
· Prioritizing the Core Elements: The first step                 regulations, current and emerging, which
  is that the business must identify those Core                  pertain to each of the Core Elements. It is
  Elements that are priority. As a rule of thumb, it is          stressed that compliance with the laws and
  highly likely that each Principle will have at least           regulations of the land is non-negotiable. It
  one Core Element which is of higher priority for               may also be noted that those businesses that
  the business. In order to do this prioritization, a            are part of a supply chain are also subject to
  business must map all the Core Elements against:               codes and standards that their buyers may
                                                                 require them to comply with.
    1. Vision, mission and values: Those that
       align with or contribute to these must be          · Integrating Prioritized Core Elements into Core
       considered priority.                                 Business: All the prioritized Core Elements must
                                                            then be integrated into core business strategy. In
    2. Business success factors: These are
                                                            order to do this, the business must:
       typically articulated in the business strategy.
                                                              1. Review its current policies and guidelines
    3. Material sustainability issues: Many
                                                                 to ensure that they cover all the prioritized
       businesses conduct a materiality analysis to
                                                                 Core Elements. Where there are gaps, these
       determine the environment and social issues
                                                                 must be revised.
       that are of high concern to its stakeholders
       (ideally based on detailed stakeholder                 2. In the case of those Core Elements where
       engagements) and have a high impact on                    the Governance Structure has a role in
       business (based on detailed internal analysis             ensuring implementation, these policies
       on key business success factors). The Core                and guidelines must be endorsed by the
       Elements that align with or contribute to these           Governance Structure.

   34        National Guidelines on Responsible Business Conduct
    3. The business must determine what its                    The map will enable the business to ascertain
       ambition is for each prioritized Core                   specific sustainability risks or opportunities
       Element, i.e. the performance level it wishes           that may reside in its value chain which may be
       to achieve for each. As mentioned earlier,              different from those faced by the business itself.
       the base performance has to be compliance
                                                           ·   Prioritizing Core Elements for value chain
       with the law or regulation, but a business
                                                               partners: Using the value chain map and as part
       may decide to be more ambitious and
                                                               of the materiality assessment referred to earlier
       take a leadership position by setting itself
                                                               in this annexure, businesses should prioritize
       a higher performance target. Annexure 3
                                                               the Core Elements which are important for their
       discusses this in greater details and suggests
                                                               value chain partners to align themselves with.
       two performance levels ­ Essential and
                                                               This is best done in consultation with their major
                                                               Tier 1 partners so that ownership is built from
                                                               the beginning.
    4. Annexure 3 outlines the performance
       indicators for relevant Core Elements at            ·   Setting policy frameworks: Businesses
       these two levels ­ Essential and Leadership.            should have in place, policies and guidelines
       Businesses may select the indicators for their          that facilitate adoption of the NGRBC across
       prioritized Core Elements that reflect their            their value chain partners. These policies and
       ambition and set 3-5 year targets.                      guidelines, where required, should be endorsed
                                                               by the Governance Structure of the business.
Covering Value Chains                                          Again, this will be most effective when done in
                                                               consultation with their Tier 1 partners.
Value chains, encompassing all upstream sourcing
channels and downstream distribution channels, are         ·   Establishing engagement processes: The
an integral part of all businesses, have a definitive          prioritized Core Elements should be embedded
role in their success, and feature in their core               in processes for all points of engagement
strategies. While integrating the NGRBC into their             with value chain partners including diligence,
core strategies and operations, businesses should              selection, monitoring, periodic engagement,
specifically encourage their adoption by their value           feedback, and recognition of good practice.
chain partners. Responsible businesses should be               Such processes are an effective means to build
well placed to understand the social, environment              actions around the prioritized Core Elements,
and economic impact their value chain partners have            signal the business' responsible intent, can be
on their own enterprise as well as on the external             used to incentivize integration of sustainability
world.                                                         principles across the value chain and, in the long
                                                               term, will enhance security of supply for the
Suggested steps for this include:
                                                               business through a stronger relationship with
·   Mapping the value chain: Businesses should                 their partners.
    create a map of their direct (or Tier 1) value chain
                                                           ·   Cascading responsibility: Businesses should
    partners and also cover, to the extent feasible,
                                                               recognize that their value chains partners, direct
    indirect members of the value chain who
                                                               and indirect, will range from large multinational
    transact with the Tier 1 value chain partners. A
                                                               corporations to Micro, Small and Medium
    value chain map, which traces the key activities
                                                               Enterprises (further details on the role of MSMEs
    involved in bringing a product from key inputs
                                                               in value chains are provided in Annexure 2),
    to the consumer, should be created for all major
                                                               who will have differentiated capacities and
    products of a business and requires collaboration
                                                               considerations while adopting the Principles
    among all functions within the business which
                                                               and Core Elements. Businesses should guide
    work on the specific products. This should
                                                               and support them in their efforts to adopt these
    provide visibility of physical locations, resource
                                                               guidelines including collaborating with other
    dependencies,             contractual/compliance
                                                               businesses. Businesses should also support their
    status, financial status and storage/logistics
                                                               Tier 1 partners to cascade this process to the
    arrangements for value chain partners as well
                                                               subsequent tiers in the value chain.
    as any interdependencies between the partners.

                                               National Guidelines on Responsible Business Conduct         35
Annexure 2:
Guidance for Micro, Small and
Medium Enterprises
Significance of MSMEs for NGRBC                                  distinct although not mutually exclusive sub-
MSMEs contribute significantly to the GDP,
employment and social equity of India. They are the              a. Global value chains linked: This group
2nd largest employer, after agriculture, employing                  accounts for increasing exposure of MSMEs
an estimated 100 million people which is almost ten                 to the global business environment since
times that of the employment in the government                      the 1990s. Those in product categories like
and large private sector put together. MSMEs are                    garments, sports goods, furniture, chocolates,
present in almost all economic activities, ranging                  beverages and other food products are well
from crafts to services and high-end industrial                     exposed to individual and collective buyer
activities. The product range spreads across sectors                standards across environment, labour and
including handicrafts, handlooms, textiles, garments,               other issues, and are hence reasonably in
leather, plastics, engineering, IT & IT enabled services,           tune with various responsible business
hospitality, tourism, health care and several others. In            guidelines, codes and standards.
terms of markets, these enterprises are connected
with rural markets to global value chains. Together              b. Vendors/suppliers for large buyers with
they contribute to 37% of industrial output, 40% of                 domestic base: The MSMEs in this group are
manufactured exports and 37.54% of the GDP for                      linked across several sectors where global
2012-13 (Annual report of Ministry of MSME, Govt. of                players have significant manufacturing or
India, 2015-16), with a considerable multiplier effect              sourcing base in India, such as automobiles,
on the economy.                                                     engineering goods, aerospace, defence,
                                                                    railways and large retail companies. There
Another remarkable feature of the MSMEs in India is                 is also a wide range of MSME suppliers for
that almost two-third of them are naturally organized               public procurement supplying to railways,
around approximately 6000 geographic clusters, as a                 engineering companies, power sector
part of local, regional, national and global value chains.          companies and a wide range of government
These clusters in groups of contiguous villages, blocks             services across hospitals, schools, etc.
or districts are known for a range of crafts, industrial
products or services.                                            c. Emerging high growth start-ups: The
                                                                    phenomenon of technology-based high
MSMEs are, therefore, not a residual segment but a                  growth start-ups is beginning to surge.
very significant component of the larger social and                 This is significant not only for the growth
economic system, interconnected with a variety                      of individual enterprises but also with their
of stakeholders. Hence, for the NGRBC to succeed,                   power to disrupt the way classical brick-
widespread buy-in and adoption by the MSME sector                   and-mortar enterprises function. With a
is necessary.                                                       more positive socio-economic environment
                                                                    for spawning start-ups with support from
Classification of MSMEs
                                                                    academic institutions, private funding
The Indian MSME sector can be broadly categorized                   for risk capital, and government support,
into two types:                                                     this group is fast emerging as a significant
                                                                    one. To illustrate there are technology-
1. MSMEs organized around local and regional value                  based aggregators of MSMEs that include
   chains: These comprise a large number of very                    independent taxi operators, e-commerce
   small enterprises and is estimated to contribute                 platforms and credit facilitators. These
   between half to two-thirds of the total MSME                     entrepreneurs have joined the bandwagon
   output. However, their share has been shrinking                  of globally integrated Indian MSMEs.
   over the years making way for integration across
   national and global value chains.                         The Business Case for MSMEs to adopt the NGRBC

2. MSMEs that are part of national & global value            There is no doubt that smaller businesses have fewer
   chains: These can be further broken into three            resources and abilities to adhere to multiple laws,

   36        National Guidelines on Responsible Business Conduct
regulations and guidelines. But the fact that several            fund them at a premium or do not fund them at all.
of them already do clearly suggests that not only are            The Indian Banks Association has recently come
they capable of doing so but it is worth their while ­ in        up with a set of National Voluntary Guidelines
other words, it makes business sense to do so. So, what          for Responsible Finance, which asks members to
are the business benefits of adopting these Principles           factor commitment to responsible business in
and Core Elements? Some of these are outlined here:              their lending and investment decisions. MSMEs
                                                                 that adopt the NGRBC may find themselves
·   Increased access to markets and customers:                   better placed to negotiate better financial terms
    MSMEs that are a part of national and global value           with banks and financial institutions to meet their
    chains know that for them to gain new customers              growth plans.
    and retain their existing ones, they have to
    conform to a number of sustainability codes and          Adopting the NGRBC
    standards that go well beyond compliance with
    local laws. These codes and standards, typically         Annexure 1 described (a) what "adopting" means and
    relating to issues regarding environment and             (b) identifying the "enablers" for successful adoption.
    labour, which are almost standard requirements           These are applicable in full measure to MSMEs as well.
    for those exporting to western countries, are            Owners and partners have to play a leadership role
    increasingly becoming universal, with several            in understanding the Principles and Core Elements
    Indian companies also expecting their supply             outlined in the NGRBC, adopting them and making
    chains to conform to sustainability requirements.        their employees, customers and funders aware so
    Adopting the Principles herein may enable MSMEs          that they derive full benefit from this commitment.
    to become preferred suppliers to the increasing          Reporting their commitments and activities is an
    number of customers who expect responsible               effective way of communicating their performance to
    behaviour from their value chains.                       these key stakeholders.

·   Better preparedness for compliance: India                The steps that MSMEs should take to adopt the NGRBC
    was a signatory to two global agreements in              are also described in Annexure 2. Recognizing that
    2015 ­ the Sustainable Development Goals                 some of these steps can be undertaken only by those
    and Paris Agreement on Climate Change. As a              businesses that are relatively larger and more mature,
    consequence, businesses will be expected to do           given below are what MSMEs must do at the bare
    more in the social and environmental spheres,            minimum:
    and this will, inevitably, lead to tighter regulations   1. Prioritizing the Core Elements. The first step in
    over the years. The MSME sector too will face this          adoption has to be prioritizing the Core Elements.
    challenge. Further, there are already multiple              In order to do this, the MSME must map all the
    buyer codes and standards that MSMEs are                    Core Elements against:
    expected to align themselves with and these will
    only increase. Adopting the NGRBC will enable                a. Its own vision, mission, values and business
    MSMEs to be better prepared for this future.                    success factors: Those that align with or
                                                                    contribute to these must be considered
·   De-risking operations: Adopting these                           priority.
    guidelines will enable MSMEs to reduce the risk
    of their operations being affected due to non-               b. Laws and regulations: All Core Elements that
    compliance with either regulations or customer                  are governed by a law or regulation, current
    expectations (as expressed in their own codes                   or emerging, have to be prioritized.
    and standards).
                                                                 c. Buyer/Customer codes: All codes adopted
·   Cost savings and increase in productivity: There                by buyers/customers, current and potential,
    is mounting evidence, even amongst MSMEs, that                  must be studied and understood and those
    investing in processes that reduce environmental                Core Elements that cover these requirements
    footprints, waste, and drudgery, and increase the               must be prioritized.
    quality of life of employees, provides benefits that
    pays back these investments quickly and in good          2. Embedding Prioritized Core Elements: All the
    measure.                                                    prioritized Core Elements must then be integrated
                                                                into the core business. This process has been
·   Access to funds: Several banks and financial                detailed in Annexure 2. All MSMEs must set their
    institutions, including in India, are increasingly          ambitions at the Essential level but those that set
    looking at businesses that do not conform to                themselves higher ambitions are likely to reap the
    responsible business practices as risky and either          benefits of this in the medium to long term.

                                                 National Guidelines on Responsible Business Conduct          37
Annexure 3:
Business Responsibility
Reporting Framework
This annexure details the reporting framework              framework to voluntarily disclose their commitment
associated with the National Guidelines for                to and performance against their economic, social
Responsible Business Conduct. It consists of three         and environmental impacts. A growing number of
sections: (a) Section A ­ General Disclosures,             businesses are already doing this and are reporting
covering operational, financial and ownership              several benefits, internal and external, as a result of
related information, (b) Section B ­ Management and        their commitment to disclosure and reporting.
Process Disclosures covering the structures, policies
                                                           Annexure 5 provides a note on how this framework
and processes to integrate the Guidelines, and (c)
                                                           may be used as a tool by businesses to assess their
Section C ­ Principle-wise Performance Indicators
                                                           alignment with the NGRBC.
covering how well businesses are performing in
pursuit of these Guidelines. Care must be taken to         Additional purpose of this reporting framework
identify measurable indicators and performance
against each Core Element of each Principle detailed       While this reporting framework is not meant to be
in Chapter 2.                                              a mandatory reporting format, a design principle
                                                           that was used in its development was that it can
Principal purpose of this reporting framework              be adapted into one by any legitimate authority or
                                                           regulator. This was done keeping in mind that there
The principal purpose of this reporting framework is
                                                           is an increasing trend globally to mandate greater
to serve as an internal tool for businesses wishing to
                                                           transparency from all organizations that impact the
align themselves with the NGRBC. It should not be
                                                           society and the planet, something that SEBI also did
seen as a mandatory reporting format as that is the
                                                           when it mandated Business Responsibility Reporting
domain of a regulator or law.
                                                           against the NVGs in 2012.
The Performance Indicators in Section C are divided
                                                           Aggregate Reporting ­ Useful methodology for
into two types ­ Essential Indicators and Leadership
                                                           MSMEs in clusters
Indicators. All businesses irrespective of size, sector,
or ownership structure, should be able to complete         MSMEs can now imbibe a method of preparing
the Essential Indicators to consider themselves            an aggregate report, i.e. the result of applying the
responsible at a base level ­ the extent to which          Aggregate Reporting (AR) methodology to combine
they are able to complete this indicates how mature        data from individual units that belong in the same
they are. The extent to which they can complete the        cluster (i.e. region/location) in order to create one
Leadership Indicators indicates how far down the           collective sustainability report. The small enterprises
path to leadership they have reached; the data gaps        of India can benefit from this reporting process, that
identify Opportunities for Improvement.                    can identify significant issues that may impact the
                                                           business, and can lead to business benefits through
Further, by comparing how much of this framework
                                                           the process of measurement, management and
a business has been able to complete in the current
                                                           change. The methodology is outlined in the learning
year vis-à-vis the previous year, will help a company
                                                           document for the project, "Scaling Up Sustainable
determine if it is on the path to leadership and
                                                           Development of MSME". A link to this learning
whether the pace is in line with its ambition.
                                                           document and examples of Aggregate Reports are in
Of course, businesses may use this reporting               Annexure 2.

   38       National Guidelines on Responsible Business Conduct
SECTION A: GENERAL DISCLOSURES                          Employees
Company details                                         10. Number of permanent employees:
1. Name of the Company:                                 11. Contractual employees (seasonal, non-seasonal):
2. Year of registration:
                                                        12. Temporary employees:
3. Corporate Identity Number (CIN) of the Company
   (if applicable):                                     13. Percentage of women:
                                                            a. On the Governance Structure:
4. Corporate      address,   telephone,   email   and
                                                            b. In top management, i.e. business and
                                                                function heads;
                                                        Associate entities
5. Sector(s) that the business is engaged in
   (industrial activity code):                          14. Names of subsidiary / associate companies;
6. Goods manufactured/services provided (top            15. Details of Trust/Society/Section 8 company to
   three by revenue):                                       further its CSR agenda:
7. Brands (top five by respective share of market)          a. Names;
   owned and percentage of revenue contributed:
                                                            b. Organization form (Trust, Society, Company)
Operations                                                     and year of establishment;
8. Location of plants (in case of manufacturing
                                                            c. Main objects/purpose;
    a. National (Districts and states ­ top five by         d. Amounts and sources of funds received in
       employee strength):                                     the reporting year;
    b. International (Country ­ top three by            16. Contact details of Nodal Officer for this report
       employee strength)):                                 (name, designation, email id, phone number).
9. Location of major offices (in case of service        SECTION B: MANAGEMENT             AND      PROCESS
   businesses)                                          DISCLOSURES
    a. National (Districts and states ­ top five by     This section is aimed at helping businesses
       employee strength):                              demonstrate the structures, policies and processes
    b. International (Country ­ top three by            put in place towards adopting the Principles and
       employee strength)):                             Core Elements.

                   Disclosure Questions                      P 1 P 2 P 3 P 4 P5 P 6 P 7 P8 P9
Policy and management processes
1. Names of the policy / policies that covers each Principle
2. Core Elements related to the Principle that the policy/
    policies cover
3. Policy/ policies relating to each principle that has been
    translated into guidelines and procedures
4. Extent to which manpower, planning and financial
    resources have been allocated for the implementation
    of the policy/ policies relating to each Principle
5. National and International codes and standards
    adopted mapped to various Principles
Governance, leadership and oversight
6. Names of the above policies that have been approved
    by the Board/top management
7. Name of the specified committee(s) of the Board/
    Director/Officer and processes to oversee the
    implementation of the policy/ policies
8. The process for board/ top management to review
    performance against the above policies and
    incorporating inputs (100 words)

                                             National Guidelines on Responsible Business Conduct      39
                   Disclosure Questions                      P 1 P 2 P 3 P 4 P5 P 6 P 7 P8 P9
9. Process for board/ top management to review
    compliance with statutory requirements of relevance
    to the Principles and rectify any non-compliances (100
10. Frequency of the reviews of the business's alignment
    with the Principles and Core Elements conducted by
    the board/ top management
Stakeholder Engagement
11. Description of the process to identify your business's
    key stakeholders (100 words)
12. Description of the process to engage with your
    stakeholders on the Principles (100 words)
13. Description of the processes to identify groups that are
    vulnerable and marginalized stakeholders (100 words).
14. Description of the processes to identify issues related
    to inclusion and impact of adopting the Principles on
    vulnerable and marginalized stakeholders (100 words).
15. Description of process to communicate to stakeholders,
    the impact of your policies, procedures, decisions and
    performance that impact them (100 words)
16. Description of how the business communicates the
    results of stakeholder engagement in the public
    domain (100 words)
17. Description of the process of communicating
    performance against these Guidelines to relevant
    stakeholders (100 words)
18. Note on how disclosures and reporting helped in
    improving business performance / strategy (50 words)
If answer to question (1) above is "No" i.e. not all Principles are covered by a policy, reasons to be stated:

                     Questions                  P1             P2     P3     P4     P5     P6    P7     P8       P9
The company has not understood the Principles
The company is not at a stage where it finds
itself in a position to formulate and implement
the policies on specified Principles
The company does not have financial or
manpower resources available for the task
It is planned to be done within next 6 months
It is planned to be done within next 12 months
Any other reason (please specify)

This section is aimed at helping businesses demonstrate their performance in integrating the Principles and
Core Elements with key processes and decisions. The information sought is categorized as "Essential" and
"Leadership". While the Essential level is expected from every business that has adopted these Guidelines,
the Leadership level is expected of businesses which aspire to progress to a higher level in their quest to be
socially, environmentally, and ethically responsible.

   40       National Guidelines on Responsible Business Conduct
                 Essential Indicators                                   Leadership Indicators
1. Month/year of last review by Governance               1. % coverage of all employees by awareness
   Structure/ top management of performance                 programmes for the Guidelines:
   of the business across the Principles and Core           a. In reporting year
   Elements of the Guidelines?                              b. Total to date
2. % Coverage of leadership team by awareness            2. % of suppliers and distributors (by value)
   programmes on the Guidelines:                            covered by social and environmental audits:
   a. In reporting year                                     a. In reporting year
   b. Total to date                                         b. Total to date
3. % of suppliers and distributors (by value), in        3. Was report on responsible business conduct
   the year:                                                made, in the year:
   a. Covered by awareness programmes for the               a. As per mandatory/global reporting
        Guidelines?                                              frameworks.
   b. Had        responsible/sustainable   business         b. Available in the public domain.
        policies in place?                                  c. Assured by a third party
4. Number of meetings/ dialogues with minority           4. Details of non-disputed fines/penalties
   shareholders that were organized in the year?            imposed on your business by regulatory and
5. Number of complaints received on any aspect              judicial institutions in the year available in public
   of the NGRBC in the year from:                           domain.
   a. Shareholders/investors                             5. Provide examples (up to three) of corrective
   b. Lenders                                               action taken on the above fines/penalties
6. Number of the above complaints pending                   imposed.
   resolution at close of year?                          6. Provide examples (up to three) of corrective
7. Value of non-disputed fines / penalties                  action taken on the complaints / cases of
   imposed on your business by regulatory and               corruption and conflicts of interest to prevent
   judicial institutions in the year?                       recurrence.
8. Number of complaints / cases of corruption
   and conflicts of interest that were registered in
   the year?
9. Details of unmet obligations (fiscal, social,
   etc.) arising out of any benefits or concessions
   provided by the central, state, or local
   governments (100 words).

                  Essential Indicators                                      Leadership Indicators
1. List top three goods /services (revenue in the         1.   For goods and services that incorporated
   year) which incorporate environmental and social            environmental and social concerns, give details of:
   concerns, risks, and/or opportunities in their design.           a. Resource use (energy, water, raw material)
2. Details of investments in specific technologies to                    per unit produced in the year.
   improve the environmental and social impacts (top                b. Reduction in resource use covering
   three by value).                                                      sourcing, production, and distribution in
3. % of input material and services (by value), in the                   the year.
   year, sourced from suppliers adhering to internal or             c. Sustainability standards/codes/ labels
   external sustainability standards / codes / policies /                adhered to.
   labels.                                                          d. Product life cycle assessment completed.
4. % of total raw material consumed in the year (by       2.   Information on the impacts of your products across
   value) that consisted of material that was recycled or      the value chain communicated to:
   reused (provide details in 50 words):                            a. To which stakeholder groups?
              a. <5%                                                b. By which channels for each group?
              b. between 5% and 25%,                                c. At what frequency?
              c. > 25%.                                   3.   Provide examples (up to three) on how the
5. Describe the process in place to safely collect,            feedback received from stakeholders is used for
   reuse, recycle and dispose of your products at end-of-      improvements?
   life (100 words)

                                              National Guidelines on Responsible Business Conduct            41
                Essential Indicators                                  Leadership Indicators
1. Complaints received on cases arising out of         1. Categories of employees (list up to three)
    discrimination:                                        supported by affirmative action, and has there
    a. Number received in the year                         been any change from the previous year?
2. Number of the above complaints pending              2. % of non-permanent employees that are
    resolution at end of the ear?                          linked to any standing platform/association
3. % of permanent employees who are members
                                                       3. % of children identified as employed in your
    of the employee association(s) recognized by
                                                           establishments / value chain that have been
    the management?
4. % of your establishments / value chain that
    has been audited in the year for:                      a. In reporting year
    a. Child labour                                        b. Total to date
    b. Forced/involuntary labour                       4. % of forced/involuntary labour identified in
5. Number of cases of child labour in your                 your establishments / supply remediated:
    establishments/ value chains identified to date:       a. In reporting year
    a. Resolved
    b. Pending resolution                                  b. Total to date
6. Number of cases of forced / involuntary             5. % of your suppliers (by value) that paid
    labour identified to date:                             minimum wages to their employees last year
    a. Resolved                                        6. Examples of steps taken (up to three)
    b. Pending resolution                                  to prevent adverse consequences to the
7. % of your employees that were paid above the            complainant in the case of harassment cases.
    legal minimum wage in the last year?               7. % of supply chain partners (by value) that
8. Ratio of the highest salary paid to the                 were assessed for adherence to health and
    lowest salary paid amongst your permanent              safety practices.
9. Number of cases of delay in payment of              8. % of accident-affected persons integrated
    wages during the year:                                 back into employment.
    a. Resolved                                        9. Describe the work-life balance issues (up to
    b. Pending resolution                                  three) that were brought up by employees (100
10. Number of complaints related to harassment             words).
    to date:                                           10. Examples (up to three) of identified work-life
    a. Resolved                                            balance topics that have been implemented.
    b. Pending resolution
11. Number of the following occurred during the
    a. Accidents at the workplace
    b. Fatalities caused
    c. Disability caused
12. % of employees (all categories) trained on
    health and safety issues and measures:
    a. In the year
    b. Total to date
13. % of employees provided training and skill
    a. In the year
    b. Total to date

  42       National Guidelines on Responsible Business Conduct
                Essential Indicators                              Leadership Indicators
1. List stakeholder groups that have been           1. Frequency of engagement with each
   identified as key to your business?                 stakeholder group?
2. Positions / departments / functions              2. Examples (up to three) of how the business has
   responsible for engagement with each                incorporated inputs from stakeholders.
   stakeholder category identified above?           3. List of the vulnerable and marginalized
3. Number of stakeholder groups that were              groups in each stakeholder group.
   formally engaged on environment and social       4. Examples of decisions and actions taken
   issues in the last year?                            by the business to address the interests of
4. % of input material and services (by value),        vulnerable/marginalized groups.
   in the year, that were procured from local and
   small vendors / producers?

               Essential Indicators                                Leadership Indicators
1. % of employees that have been provided           1. % of contractual employees and value
   training on human rights issues:                    chain partners that have been made aware /
   a. In the year                                      provided training on human rights issues:
   b. Total to date                                    a. In the year
2. Employee categories that are covered by             b. Total to date
   the human rights policies of the business ­      2. External stakeholder groups and
   Permanent/Contract/Casual.                          representatives that are covered by the human
3. Number of business agreements and                   rights policies of the business?
   contracts with third party partners that were    3. Stakeholder groups that have been made
   reviewed in the year, to avoid complicity with      aware of the grievance mechanisms for
   adverse human rights impacts in the previous        human rights issues:
   year.                                               a. During the year
4. Stakeholders groups governed by the                 b. Total to date
   grievance committee for human rights issues.     4. List (up to three) corrective actions taken to
5. Number of stakeholders that reported                eliminate complicity with adverse human rights
   human rights related grievances and/or              impacts in the last year.
   complaints:                                      5. Provide (up to two) examples of a business
   a. Received in the year                             process being modified / introduced as a
   b. Pending resolution                               result of addressing human rights grievances/
                                                    6. Provide details of the scope and coverage of
                                                       any human rights due-diligence conducted
                                                       during the year.

                                          National Guidelines on Responsible Business Conduct    43
                Essential Indicators                                  Leadership Indicators
1. Material risks of potential or actual adverse       1. Information on environmental impact
   impacts upon the environment and                       assessments undertaken in the year:
   communities by the business:                           a. Have the results been communicated in the
   a. Identified in the year                                  public domain?
   b. Mitigation and adaptation measures put in           b. Provide details of any actions taken to
        place for the above environmental risks?              mitigate any negative social impacts.
2. Good practices (up to three) in reduction,          2. Risk management strategies and measures for
   recycling, and reuse initiatives that contributed      each material environmental risk identified for
   to lowering the adverse environmental footprint        the business:
   of your business activities.                           a. Details of measures (100 words).
3. Examples of any collective action by your              b. Targets and achievement values.
   business with other businesses / NGOs /             3. Details of your specific contribution to
   government agencies / international partners /         India's Nationally Determined Contributions
   development institutions undertaken to address         (submitted at UNFCCC COP21 in 2015)
   any of the environmental risks opportunities        4. New businesses-products-services created
   identified above.                                      to address the material environmental risks
4. Details of any adverse orders in respect of any        identified:
   show cause / legal notices from CPCB/NGT/SPCB          a. Information on businesses created (100
   received during the year.                                  words)
                                                          b. % of revenue contributed by these
                                                       5. Details of good practices cited in reduction,
                                                          recycling, and reuse initiatives benchmarked
                                                          against industry best practice (100 words).

                  Essential Indicators                               Leadership Indicators
1.    Review public policy advocacy positions by
                                                       1. The public policy positions available in the
      the governance structure for consistency with
                                                          public domain.
      Principles of these Guidelines:
                                                       2. Examples (up to three) of any policy changes
      a. Frequency
                                                          in the past year as a result of your advocacy
      b. Month/year of last review.
2.    Names of trade and industry chambers and
                                                       3. Details of corrective action for anti-
      associations that you are a member/affiliate of.
                                                          competitive conduct, taken by the business
3.    Details of any adverse orders received from
                                                          based on adverse orders from regulatory
      regulatory authorities for anti-competitive
      conduct by your business.
4.    Monetary contributions (if any) that have been
      made to political parties.

     44     National Guidelines on Responsible Business Conduct
                       Essential Indicators                                       Leadership Indicators
   1. Social impact assessments of your business               1.   With respect to these social impact assessments:
      operations conducted:                                         a. Results made available in the public domain
      a. Number completed in the year?                              b. Details of any actions taken to mitigate any
      b. Number conducted by an independent external                     negative social impacts (100 words).
            agency.                                            2.   Numbers benefitting from such beneficial products,
   2. Examples of products, technologies, processes                 technologies or processes.
      or programmes (up to three) that contribute to           3.   With respect to projects during the year for which
      the benefit of the vulnerable and marginalized                R&R is applicable:
      sections of society                                           a. Was the R&R package developed in consultation
   3. With respect to projects during the year for which                 with project-affected people?
      R&R is applicable:                                            b. Information on gross amounts, maid available in
      a. Number of persons that were affected displaced                  the public domain
            by these projects?                                 4.   Channels/platforms used to communicate
      b. Gross amount paid out to project-affected and              information regarding resolution of grievances /
            displaced persons?                                      complaints from communities.
   4. Grievances / complaints received from local              5.   Examples (up to three) of economic and social value
      community:                                                    addition in these underdeveloped regions (100
      a. Number received during the year                            words).
      b. Number pending resolution                             6.   Examples where benefits of this local traditional
   5. Details of investments (top three by value) in regions        knowledge being used by the business are shared
      which are underdeveloped (100 words).                         with the community.
   6. Examples of goods and services up to 3) that             7.   Number of beneficiaries covered under your CSR
      incorporate local traditional knowledge.                      projects (as per Section 135 of Companies Act 2013),
   7. Details of adverse orders or judgments in                     disaggregated by the vulnerable and marginalized
      intellectual property rights disputes related to              group categories.
      traditional knowledge during the year (100 words).       8.   Examples of how the impact of your community
   8. Summary of the key themes covered by CSR                      initiatives contribute to local and national
      initiatives (as per Section 135 of Companies Act 2013)        development indicators?
      or linked to the CSR Policy of the business (up to 100

                    Essential Indicators                                       Leadership Indicators
   1. Examples (up to three) where adverse impacts of          1. Corrective actions taken on adverse impacts of
      goods and services of your business have been raised        goods and services of your business:
      in public domain.                                           a. Details (100 words).
   2. % by value of goods and services of the business that       b. Communicated in the public domain.
      carry information about:                                 2. List of national-international product labels /
      a. Environmental and social parameters relevant to          certifications being used by the business.
           the product.                                        3. Channels platforms where information on goods
      b. Safe and responsible usage.                              and services of the business can be accessed.
   3. Number of consumer complaints in respect of data         4. Steps taken to inform and educate vulnerable
      privacy:                                                    and marginalized consumers about safe and
      a. Received during the year.                                responsible usage of products (100 words).
      b. Pending resolution.                                   5. On complaints received in respect of data privacy
   4. Number of consumer complaints in respect of                 and advertising, indicate what corrective actions
      advertising:                                                were taken to ensure that these do not get repeated
      a. Received during the year.                                (100 words).
      b. Pending resolution.                                   6. Processes in place to inform consumers of any risk of
   5. Number of consumer complaints in respect of                 disruption/discontinuation of essential services (100
      delivery of essential services:                             words).
      a. Received during the year.
      b. Pending resolution.

Signature of the designated official responsible for this report.
Telephone number:
Email id:
                                                  National Guidelines on Responsible Business Conduct             45
Annexure 4:
SDGs Mapped Against NGRBC

The chart demonstrates the alignment between the SDGs and relevant Principles of the NGRBC. It may be
noted that this is indicative.

   46      National Guidelines on Responsible Business Conduct
Annexure 5:
Business Case Matrix
The Business Case Matrix (BCM) is designed as a tool to map the business benefits of integrating these
Guidelines. The BCM here highlights some significant benefits which may accrue to businesses from integrating
the Principles from these Guidelines. This is not exhaustive and it is critical for each business to assess the
benefits in their respective contexts.

                         Revenue                                                                                           Brand
                                         Cost savings and                         management/
      Principle         growth and                        Access to capital                            Human capital       value/
                                           productivity                              license to
                       market access                                                                                     reputation
1.    Integrity,     New customers;                           Good governance Positively seen         Attract and        Positively
      Ethics,        Business partner                         practices are     by communities,       retain quality     seen by
      transparency, of choice                                 attractive to     NGOs, local           employees          customers,
      accountability                                          investors, banks, governments,                             regulators,
                                                              financial markets regulators                               media
2.    Safe and        New customers;     Efficiency gains in Lower risk         Reduced risk          Attract and        Enhanced
      sustainable     Customer loyalty   supply chain and perception is         of action from        retain quality     brand value
      goods and                          production           attractive to     regulators            employees
      services                                                investors and     and consumer
                                                              lenders           activists
3.    Well-being of                      Increased                              Improved labour       Attract and        Employer of
      employees                          productivity; high                     relations leading     retain quality     choice
                                         morale; reduced                        to less disruptions   employees
4.    Respect and     New customers;     Efficiency           Good governance Positively seen         Attract and        Positively
      responsive-     Customer loyalty   gains across         practices are     by stakeholders       retain quality     seen by
      ness to all                        procurement,         attractive to     - communities,        employees          customers,
      stakeholders                       production           investors and     NGOs,                                    regulators,
                                         distribution, after- banks             governments,                             media
                                         sales                                  regulators
5.    Respect and     Access to          Enhanced             Good governance Positively seen         Attract and        Positively
      promote         international      productivity         practices are     by communities        retain quality     seen by
      Human rights    capital and                             attractive to     and NGOs; Lower       employees          customers,
                      developed                               investors, banks, risk of non-                             regulators,
                      country markets                         financial markets compliance                               media
6.    Respect,        Business partner   Lower operating Lower risk             Positively seen       Attract and        Positively
      protect and     of choice,         costs in the long perception is        by communities,       retain quality     seen by
      restore the     especially for     term; less danger attractive to        NGOs,                 employees          customers,
      Environment     sustainability-    of"externalities"    investors, banks, governments,                             regulators,
                      oriented buyers    emerging as          financial markets regulators; Lower                        media
                                         liabilities.                           risk of non-
7.    Responsible                                                               Positively seen                          Positively
      and                                                                       by governments,                          seen by
      transparent                                                               regulators, NGOs                         customers,
      policy                                                                                                             regulators,
      advocacy                                                                                                           media
8.    Promote         Potential          Lower costs of    Lower risk        Enhanced                 Potential source   Positively
      inclusive       for market         ensuring business perception is     governmental             of trained         seen by
      growth and      expansion and      continuity        attractive to     support to               employees          customers,
      equitable       acquisition of                       investors and     initiatives;                                regulators,
      development     new customers                        lenders           improved                                    media
                                                                             relations with
 9.    Provide value New customers;                         Growth prospects Lower risk of            Talent will be     Customers
       to consumer Customer loyalty                         attractive to    consumer action          drawn towards      perceive
       responsibly                                          investors                                 growing firm       brand
                                                                                                                         and firm

                                                      National Guidelines on Responsible Business Conduct                      47
Annexure 6:
Guidance for Businesses on Using
the BRRF as a Self-Assessment
The Business Responsibility Reporting Framework (BRRF) is a tool for businesses to assess how well-aligned
they are to the National Guidelines for Responsible Business Conduct (NGRBC), and identify opportunities for
improvement. This note provides guidance on how this can be done.

To begin with, it must be understood that there are two dimensions to alignment. The first may be referred to
as "completeness", which measures the extent to which the Principles and Core Elements are tracked by the
business. The second, which may be referred to as "Ambition", measures how evolved and challenging the
performance targets that the business sets for itself are, and what to extent these are achieved.

Given the stage of evolution of the NGRBC, this tool focuses on the Completeness aspect of alignment.

Completing the BRRF

Each business must attempt to complete all the three sections of the BRRF. Sections A and B have indicators
that all businesses are expected to complete. Section C has indicators divided into two categories ­ Essential
Indicators and Leadership Indicators ­ the latter being those indicators, that companies which are more
familiar and experienced in business responsibility and sustainability should be able to complete.

Once the business has completed this, it must identify all the specific questions and indicators that it has not
been able to complete. This forms the basis for it to determine where it is in terms of completeness.

Assessing Completeness

The following grid can assist companies in knowing what is the level of completeness, High being the highest
level of completeness and, Other, being the lowest. Businesses may choose to rate themselves against Section B
on each of the Principles.

Section/Sub-           High (20)              Medium (15)            Low (10)              Other (5)
 Section B             All complete           Qs 1, 5, 7, 8 and      Q 1 complete, Q       Q 1 and five of
                                              ten of the others      5 OR 7 OR Q 8         others complete
                                              complete               and seven of the
                                                                     others complete
Section C ­            All complete           All Essential and      All Essential         Some but not all
Principles 1 to 9                             some Leadership        complete              Essential complete
Overall                Above 180              150 ­ 180              120 ­ 180             Below 120

Businesses that wish to arrive at an overall score can do this by assigning scores to the level of completeness
against each of the sections and sub-sections. As an example, scores for each of the completeness levels range
from 20 for, High, and 5 for, Other, (and businesses are free to choose whatever score they want). Businesses
that wish to arrive at an overall score can do this by adding the score for each of Section B and the 9 Principles
of Section C. It is advisable to give equal weightages for each Principle since, as was stated earlier, all the
principles are inter-dependent, inter-related and non-divisible.

   48       National Guidelines on Responsible Business Conduct
Annexure 7:
Indian Laws and Principles
This annexure is only an indicative/suggestive mapping of each of the Principles against laws enacted in India.

                                  Principle 1     Principle 2    Principle 3      Principle 4       Principle 5    Principle 6    Principle 7    Principle 8     Principle 9
       Principles(briefs)          Integrity,      Safe and     Well­ beingof   Respect for and    Respect and      Respect,     Responsible      Promote      Provide value
   List of Laws(indicative)         Ethics,      Sustainable     Employees      responsiveness       Promote       protect and       and          inclusive    to consumer
                                Transparency      goods and                          to all       Human Rights     restore the   transparent     growth and     responsibly
                                       &           services                      stakeholders                     Environment       policy        equitable
                                Accountability                                                                                     advocacy     development
Factories Act,1948                                                                                                                   
Companies Act,2013                                                                                                                                  
Bureau of Indian Standards
Act, 2016
Prevention of Corruption Act,
Trade Marks Act, 1999                                                                                                                                               
Patents Act, 1970                                                                                                                                   
Designs Act,2000                                                                                                                                                    
Competition Act, 2002                                                                                                                                               
Prevention of Money
Laundering Act,2002
Right to Information Act,
Micro, Small and Medium
Enterprises Development                                                                                                                             
Act, 2006
The Lokpal and Lokayuktas
Act, 2013
Industrial Disputes Act,1947                                                                                                         
Trade Union Act, 1956                                                                                                                
Plantations Labour Act, 1951                                                                           
Equal Remuneration Act,
Consumer Protection Act,
Commission for Backward                                                                                                                             
Classes Act, 2017
Persons with Disabilities
(Equal Opportunities,
Protection of Rights and Full
Juvenile Justice (Care and
Protection of Children) Act,                                                                                                                                        
National Commission for
Minority Educational                                                                                                                                
Institutions Act, 2004
Commissions for Protection of
Child Rights Act,2005
National Rural Employment
Guarantee Act, 2005
Protection of Women from
Domestic Violence Act,2005
The Scheduled Tribes and
Other Traditional Forest
Dwellers (Recognition of
Forest Rights)Act,2006
Protection of Human Rights

                                                                   National Guidelines on Responsible Business Conduct                                              49
                                     Principle 1     Principle 2    Principle 3      Principle 4       Principle 5    Principle 6    Principle 7    Principle 8     Principle 9
       Principles(briefs)             Integrity,      Safe and     Well­ beingof   Respect for and    Respect and      Respect,     Responsible      Promote      Provide value
   List of Laws(indicative)            Ethics,      Sustainable     Employees      responsiveness       Promote       protect and       and          inclusive    to consumer
                                   Transparency      goods and                          to all       Human Rights     restore the   transparent     growth and     responsibly
                                          &           services                      stakeholders                     Environment       policy        equitable
                                   Accountability                                                                                     advocacy     development
Right to Fair Compensation
and Transparency in Land
Acquisition, Rehabilitation and
Resettlement Act, 2013
The Scheduled Castes And The
Scheduled Tribes (Prevention                                                                              
Of Atrocities) Act, 1989
The Protection Of Women
Against Sexual Harassment At                                                             
Work Place Bill, 2010
Act, 1986
Public Liability Insurance Act,
Biological Diversity Act 2002                                                                                                                          
Hazardous and Other
Wastes (Management and
Transboundary Movement)
Rules, 2016
E-waste (Management), Rules,
Laws in `Section A' (Labour
Laws in `Section B'
(Environmental Laws)
Laws in `Section C' (Economic/
Finance Laws)

 `Section A'                                                                                                                   `Section B'
 Workmen's Compensation Act, 1923                                                                                              Wildlife Protection Act, 1972
 Children (Pledging of Labour) Act, 1933                                                                                       Water (Prevention and Control of Pollution)
                                                                                                                               Act, 1974
 Payment of Wages Act,1936                                                                                                     Water (Prevention and Control of Pollution)
                                                                                                                               Cess Act, 1977
 Industrial Employment (Standing Orders) Act, 1946                                                                             Air (Prevention and Control of Pollution)
                                                                                                                               Act, 1981
 Employees State Insurance Act, 1948                                                                                           Forest (Conservation) Act, 1980­
                                                                                                                               Amendments in 1988
 Minimum Wages Act, 1948                                                                                                       National Environment Tribunal Act, 1995
 Employees Provident Fund and Miscellaneous Provisions Act, 1952                                                               National Environmental Appellate
                                                                                                                               Authority Act, 1997
 Maternity Benefits Act, 1961                                                                                                  Energy Conservation Act, 2001
 Payment of Bonus Act, 1965                                                                                                    Coastal Aquaculture Authority Act, 2005
 Contract Labour (Regulation & Abolition) Act, 1970                                                                            Special Economic Zones Act, 2005
 Payment of Gratuity Act,1972
 Bonded Labour System (Abolition) Act, 1976
 Inter-State Migrant Workmen (Regulation of Employment and
 Conditions of Service) Act,1979
 Child Labour (Prohibition & Regulation) Act, 1986
 Building and Other Construction Workers (Regulation of Employment and Conditions of Service)
 Vishaka State of Rajasthan, (1997) 6SCC241
 `Section C'
 Essential Commodities Act, 1955
 Union Duties of Excise (Distribution) Act, 1979
 Central Excise Tariff Act, 1985
 Customs (Amendment) Act, 1985
 Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986
 Direct Tax Laws (Amendment) Act, 1988
 Foreign Trade (Development and Regulation) Act, 1992
 Securities and Exchange Board of India Act, 1992
 Customs and Central Excise Laws (Repeal) Act, 2004
 National Tax Tribunal Act, 2005

    50          National Guidelines on Responsible Business Conduct
Annexure 8:
    National Resources
1. A Guidebook for Biodiversity Management ­ IBBI and CII-ITC CESD
    Insights on biodiversity and its links with businesses across seven major sectors.
    WEB.pdf )
2. Affirmative Action for Scheduled Castes & Scheduled Tribes: A CII-ASSOCHAM Action Plan
    Proposed concrete steps by Indian industry on affirmative action.
3. Aggregate Reports ­ Samples from Ajmer and Punjab clusters
    ( |
4. Constitution of India
5. Corporate Governance in India @ 2016: Where Do We Stand - FICCI
    A report on the state of corporate governance in India post introduction of Companies Act, 2013
    ( )
6. Guidelines on Corporate Governance for Central Public Sector Enterprises
    Issued by the Ministry of Heavy Industries and Public Enterprises in May 2010
    ( )
7. Inclusiveness and Accessibility Index - FICCI
    A Toolkit to promote Inclusiveness of Persons with Disabilities.
8. Indian Companies with Solutions that the World Needs: Sustainability as a Driver for Innovation and
    Profit - WWF & CII-ITC CESD
    Report focusing on climate change and how businesses develop strategic responses.
    That_the_World_Needs.pdf )
9. India's Nationally Determined Contribution
    Intended contribution of India towards the international climate agreement signed at the UNFCCC Con-
    ference of the Parties (COP21) in Paris in December 2015.
    TO%20UNFCCC.pdf )
10. IS 16010: Guidance on Good Governance by Bureau of Indian Standards
    Standard specifies principles and governance structures for a value based management approach.
    ( )
11. National Action Plan on Climate Change
    NAPCC, under the Prime Minister's Council on Climate Change, brings together the existing national plans
    on water, renewable energy, agriculture and others into a set of eight missions.
    ( )
12. Scaling Up Sustainable Development Of MSME Clusters In India: Learning Document
    ( )
13. Stakeholder Engagement: Good Practice Handbook - IFC
    Overview of good practices in stakeholder engagement, with a focus on groups that are "external" to the
    core operation of the business.

                                            National Guidelines on Responsible Business Conduct       51
14. The Companies Act, 2013
    Base regulation for incorporation of a company in India including responsibilities of the Board, and, Section
    135 on corporate social responsibility mandated for companies.
    ( )
15. The Micro, Small and Medium Enterprises Development Act, 2006
    Base regulation for promotion and development of MSMEs in India.
    ( )

International Resources
    1. Beyond Supply Chains - Empowering Responsible Value Chains - World Economic Forum
       Report on the case for and issues within sustainable supply chains of businesses

    2. Children's Rights and Business Principles
       Guidance on how businesses can take action to respect and support children's rights
       Business_Principles.pdf )

    3. Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW)
       UN International Treaty bill of rights for women

    4. Corporate Responsibility: Private Initiatives and Public Goals by OECD
       Analysis of the results of an OECD fact-finding project on business approaches tocorporate

    5. Developing Value by Sustainability and IFC
       Report on identifying opportunities to increase profits by making progress on sustainability.

    6. ISO 26000: International Standard
       Guidance on how businesses and organizations can operate in a socially responsible way.

    7. Forging a path for business in the UN 2030 development agenda
       Resources for businesses to map their initiatives within the UN 2030 development agenda including
       the SDGs.

    8. Global Reporting Initiative (GRI) Standards
       Guidance for businesses to prepare and publish sustainability reports as per the GRI Standards.

    9. Linking the GRI Standard and the SEBI BRR Framework

    10. ILO Declaration on Fundamental Principles and Rights at Work
        Declaration commits Member States to respect and promote principles and rights in four categories

    11. International Covenants on Civil and Political Rights and Economic, Social and Cultural Rights
        Multilateral treaty adopted by the UN, committing its parties to work toward the granting of
        economic, social, and cultural rights.

   52       National Guidelines on Responsible Business Conduct
12. International Integrated Reporting Council (IIRC) Guidelines
    Guidance for businesses to prepare and publish an Integrated Report as per the IIRC framework.
    FRAMEWORK-2-1.pdf )

13. Natural Capital Protocol and Sector Guides - Natural Capital Protocol
    Draft framework to help inform and support business decisions by including their impact on natural

14. OECD Guidelines for Multinational Enterprises
    Guidelines on recommendations addressed by governments to multinational enterprises for
    responsible business conduct
    ( )
15. Public Sector Roles in Strengthening Corporate Social Responsibility - World Bank
    Report on roles that public sector agencies have played in providing an enabling environment for
    ( )

16. Social Capital Protocol - WBCSD
    A collation of tools for businesses to measure and value their interactions with people and society.

17. Strengthening Implementation of Corporate Social Responsibility in Supply Chains ­ IFC
    A World Bank commissioned study on barriers to the achievement of better sustainability
    performance in suppliers
    ( )

18. Towards Responsible Lobbying: Leadership and Public Policy - Accountability and UNGC
    A study to understand how organizations influence goals of sustainable development through
    lobbying processes
    ( )

19. UN Guiding Principles on Business and Human Rights
    Implementing the United Nations "Respect, Protect and Remedy" Framework
    ( )

20. UN Guidelines on Consumer Protection
    A set of principles for setting out the main characteristics of effective consumer protection legislation,
    enforcement institutions and redress systems

21. UN Guiding Principles Reporting Framework
    Guidance for businesses to report on how they respect human rights
    ( )

22. Universal Declaration of Human Rights
    Adopted by the UN General Assembly as a common standard of achievement for all peoples and all

23. UN Sustainable Development Goals
    17 goals with 169 targets adopted by the UN as part of its sustainable development agenda and
    replacing the erstwhile Millennium Development Goals.

                                          National Guidelines on Responsible Business Conduct          53

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