Understanding Sustainability is as simple as meeting the needs of the present without compromising the ability of future generations to meet theirs. So, if a company implements sustainable practices by reducing its consumption of limited resources or finds alternative resources with, for example, fewer environmental consequences, it understands the importance of Sustainability.
Since the inception of the CSR provision in 2014, the CSR ecosystem has improved by improving the disclosures, simplifying the compliances, bringing in more objectivity and transparency, and entrusting more responsibility to the company’s board. These amendments inter-alia include mandatory registration of implementing agencies with the Ministry, treatment of unspent amount, impact assessment of CSR projects, modalities for creating and acquiring capital assets through CSR, etc.
The Ministry of Corporate Affairs, Government of India, instituted the annual National Corporate Social Responsibility (CSR) Awards to recognize companies that have positively impacted society through their innovative & sustainable CSR initiatives. These awards are the apex of national-level recognition by the government of India.
The Ministry of Micro, Small and Medium Enterprises (MSME) implements the MSME Champions scheme in that series. The objective is to modernize MSMEs’ manufacturing processes, reduce wastage, encourage innovation, sharpen business competitiveness, and facilitate their national and global reach and excellence. Various financial incentives are being provided to MSMEs under the scheme. There are three components under the MSME Champions scheme, the details of which are as follows:
- MSME-Sustainable (ZED)
- MSME-Competitive (Lean)
- MSME-Innovative (Incubation, IPR, Design and Digital MSME)
The MSMEs registered under the MSME Sustainable (ZED) Certification Scheme have benefitted by assessing different parameters in Bronze, Silver and Gold certification levels. The MSME Sustainable (ZED)
Certification Scheme is based on an assessment model with various parameters that encourage MSMEs to improve their processes and systems to enhance quality and move towards Sustainability. Specific parameters to encourage MSMEs to adopt practices towards Sustainability are Energy Management, Environment Management, Natural Resource Management, Corporate Social Responsibility, etc. The scheme was launched on April 28, 2022, and more than 22,000 MSMEs have registered, out of which 734 Bronze, 32 Silver, and 25 Gold certifications have been awarded to the MSMEs. The remaining registered MSMEs are under process for accreditation, subject to fulfilment of assessment criteria.
Indian Institute of Technology Madras (IIT Madras) has launched a School of Sustainability. The School of Sustainability will teach new, interdisciplinary courses on Sustainability, synergize research to tackle grand challenges and provide a platform to host events and showcase technologies that can help drive practice and policy. Conceptualized as a Centre of Excellence, it will bring together faculty members from across the Institute’s departments and research centres.
In addition, the National Guidelines for Responsible Business Conduct (NGRBC) framework is a mandatory disclosure mechanism for the top 1000 listed companies or businesses to report their performance on environmental, social and governance (ESG) aspects and demonstrate their commitment to responsible business practices.
The Ministry of Corporate Affairs has also revised the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 (NVGs) and formulated the National Guidelines on Responsible Business Conduct (NGRBC). These guidelines urge businesses to actualize the principles in letter and spirit.
These principles are:
- Businesses should conduct and govern themselves with integrity in an Ethical, Transparent, and Accountable manner.
- Businesses should provide goods and services in a manner that is sustainable and safe
- Businesses should respect and promote the well-being of all employees, including those in their value chains.
- Businesses should respect the interests of and be responsive to all their stakeholders.
- Businesses should respect and promote human rights.
- Businesses should respect and try to protect and restore the environment.
- Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
- Businesses should promote inclusive growth and equitable development.
- Businesses should engage with and provide value to their consumers in a responsible manner.
As a first step towards mainstreaming the concept of business responsibility, the ‘Voluntary Guidelines on Corporate Social Responsibility’ were issued in 2009. After extensive consultations with business, academia, civil society organizations and the government, these guidelines were revised as ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 (NVGS)’. The NVGs were developed based on India’s socio-cultural context, priorities, and global best practices.
Various national and international developments in the past decade have nudged businesses to be sustainable and more responsible, prior most being the United Nations Guiding Principles on Business & Human Rights (UNGPs). These became the key drivers for further revision of the guidelines. Some of these include the Companies Act 2013 (Act), which forces businesses to be more mindful of their stakeholders. The Act casts fiduciary duties on the Directors of a Company, requiring them to promote the objects of the company for the benefit of its members as a whole and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. There was also a need to demonstrate more visibly India’s implementation of the UNGPs based on UNHRC’s ‘Protect, Respect & Remedy’ Framework and also make evident India’s commitment to Sustainable Development Goals (SDGs).
