Feb 27, 2018

Companies must move beyond compliance to broader responsibility for inclusion

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·    Public Sector Units continue to disclose higher commitment on India Responsible Business Index 3 year in a row as compared to private sector

 

·    The index findings indicate that there is consistent improvement in non-discrimination and community development elements but inclusiveness in supply chain and community stakeholder engagement elements continue to be lagging

 

Third edition of an IRBI ranking top 100 companies listed on Bombay Stock Exchange was released at the India Responsible Business Forum (IRBF) in New Delhi today.

 

The index analyses policies of the top 100 companies listed on the Bombay Stock Exchange from the lens of inclusion, following the principles laid in the National Voluntary Guidelines for Social, Environmental and Economic Responsibilities of Business (NVGs), which were developed by the Ministry of Corporate Affairs in collaboration with civil society organisations and introduced in 2011.

 

This index was developed through a collaborative partnership between Corporate Responsibility Watch, Oxfam India, Praxis and Partners in Change, and was launched at the IRBF 2018 conference in New Delhi on Feb 27, 2018. IRBF is a platform to promote adoption of inclusive and responsible business practices among Indian companies.

 

“India is seeing high and rising levels of economic inequality in a country that is already fractured along lines of caste, religion, gender and other social inequalities.  If the private sector wants to contribute to a more equal opportunity society, it will need to go beyond the minimum compliance of laws. The sector must take bolder decisions towards closing the pay gap between men and women, addressing the issues of employee dignity and human rights, go beyond minimum wages to a fair living wage, focus on community development in backward regions, ensure inclusiveness in their supply chain, and recognize the rights of communities to natural resources. 

Many of these measures are already included in the National Voluntary Guidelines and SEBI has mandated reporting against these for the top 500 listed companies. As a first step, companies need to adopt policies in these respects and make them available for public scrutiny,”said Oxfam India Chief Executive Officer Nisha Agrawal.

 “The Index findings unfortunately points out that voluntary guidelines are incapable of pushing even policies let alone practice. The companies are doing well in labour well-being and CSR, and not in supply chain because there is no legal backing for extending policies to supply chain” said Praxis Chief Executive and Corporate Responsibility Watch Convenor Tom Thomas.

 

The 100 companies were scored on the basis of five elements: Non-discrimination in the workplace, Respecting Employee Dignity and Human Rights, Community development, Inclusiveness in supply chain and Community as business stakeholders. The index measures existence of public disclosures on policy commitments (Policy) and of knowledge systems (Knowledge) to monitor and assess the policy commitments.

 

Key highlights of the index are as follows:

 

·        The overall data, especially when seen alongside the profits of corporate India, continue to reflect a distance between the interests of business and shareholders and those of communities and of workers.

·        The FMCG sector is leading the way in the Community Development element with an average score of 0.65. Further, while Non Discrimination in employment across various categories is high on the agenda in most sectors, the Pharmaceutical sector lags. Interestingly, in Respecting Employee Dignity and Human Rights element, two sectors i.e. Finance and IT, Telecom, Media and Publishing score the least in comparison to other sectors.

·        In line with the previous rounds of IRBI, PSUs disclose higher levels of commitment on the index elements than their private counterparts. On elements such as Inclusiveness in Supply Chain and Community Development, private companies score marginally higher.

      1. Non-discrimination:

a)      More than 50 companies have identified women, persons with disabilities, scheduled caste and religious minorities as vulnerable groups. While 32 companies indicate sexual minorities, only 18 companies explicitly mention scheduled tribes;

b)      The Rights of People with Disabilities Act, 2016 does not seem to have had a significant influence on companies as far as disclosing related policies in the public domain. Only 19 companies have answered in the affirmative to disclosures in this area, one more than that last year

      2. Respecting Employee Dignity and Human Rights:

a)      68 companies recognise freedom of association of employees as against 66 in IRBI 2016. 54 companies even recognise the principle of collective bargaining as compared to 52 in IRBI 2016

b)      Only 24 companies, six less than last year, have explicitly stated their commitment to ensuring Minimum Wage and 6 companies have actually committed to providing fair living wage.

      3. Community Development:

a)      81 companies have not disclosed identification of backward regions as a key aspect for implementing their CSR projects

b)      86 companies have disclosed identifying specific marginalised groups for targeted CSR interventions as compared to 81 last year

 

      4. Inclusiveness in Supply Chain:

a)      34 companies have not disclosed extending their child labour policy to their supply chain

b)      Only 4 companies disclosed assessing issues related to workers’ rights in the supply chain

 

      5. Community as business stakeholders:

               a)    70 companies, 8 up from last year, state acknowledgement of judicious use of local resources, with almost 44 providing for systems for the same

               b)    In total 54 companies recognised the need for conducting impact assessment while only 9 mentioned public hearing or communication with communities about the impact

              c)    An overwhelming number of companies, i.e. 95 and 96 respectively, do not disclose their commitment for providing similar or better living conditions to project affected people neither do they commit to free and prior commitment through discussions for land acquisition and displacement

 

About Oxfam India

Oxfam India, which is leading the India Responsible Business Forum, works towards creating an equal, just and sustainable society by empowering the vulnerable and underprivileged.

Oxfam India’s focuses its work in some of the poorest states of India, which include -- Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Uttar Pradesh and Uttarakhand.

Our humanitarian teams have responded to 18 natural disasters and conflict in the last 5 years, such as floods in Jammu & Kashmir, Uttarakhand, Odisha and Assam, and we provide long-term rehabilitation interventions.

About Praxis India

Praxis - Institute for Participatory Practices (www.praxisindia.org), the secretariat of Corporate Responsibility Watch, leads on the methodology and analysis of India Responsible Business Index, and hosts the principal research team of the index. Praxis is a knowledge organisation specialising in participatory approaches to sustainable development and is committed to social inclusion.

 Read the report here

For further information, please contact:

Himanshi Matta, 8860182310, himanshi@oxfamindia.org

Media Coordinator, Oxfam India