The Ministry of Corporate Affairs, in July 2011, came out with the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ (NVG) , in recognition of the role of businesses in improving the quality of life and the significance and long-lasting impacts they have on people and the planet. The rationale was that businesses, when supported by an appropriate Government policy regime that encourages systematic movement towards responsible thinking, decision-making, would lead to progressive movement towards sustainability and the trajectory of overall growth and development takes a positive turn. The primary objective of these guidelines is to encourage adoption of sustainability reporting and mainstream disclosure on environmental, social and governance metrics. It is based on the premise that what cannot be measured, cannot be changed. Subsequently, a business responsibility report framework was created to enable reporting against each of the nine NVG principles. The Securities and Exchange Board of India (SEBI) initially made it mandatory for the top 100 companies listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) . Subsequently, the mandatory reporting on business responsibility was extended to top 500 companies listed on BSE and NSE in 2016 .
Effectively, at least 100 listed companies have reported on NVGs for the last five years from FY 2012-13 and currently 500 listed companies are reporting annually. Since the Companies Act, 2013 came into effect, reporting related to mandatory spending of 2% of profits on corporate social responsibility is also included in the business responsibility reporting framework. The elaborate structure of non-financial public disclosures by businesses is held to account by several ongoing dialogues in the national and international space. In 2017, the National Human Rights Commission initiated consultations to explore with businesses their role and commitment to human rights in line with India’s ratification of the United Nations Guiding Principles (UNGP) on Business and Human Rights . The UN Guiding Principles on Business and Human Rights are a set of guidelines for States and companies to prevent, address and remedy human rights abuses committed in business operations. The Indian Institute of Corporate Affairs (IICA), has also initiated an exercise to update the NVG that is currently under process. In parallel, India jumped up 30 spaces to rank 100 in the World Bank’s Ease of Business ranking. The Government of India celebrated it as a vindication of its economic reforms. However, the news is not equally good for everyone. Recent Oxfam report reveals that 82% of the global wealth generated in 2017 went to the richest 1% of the global population, while 3.7 billion people who made up the poorest half of the world saw no increase in their wealth. Economic inequality in India is also very alarming. India’s richest 1% bagged 73% of the wealth created last year while 67 crore Indians, comprising the country’s poorest half, saw their wealth rise by just 1%.