NGRBC: the nine principles behind BRSR
Intuition
The National Guidelines on Responsible Business Conduct (NGRBC) were issued by the Ministry of Corporate Affairs in March 2019. They updated the National Voluntary Guidelines on the Social, Environmental and Economic Responsibilities of Business, first issued in 2011.
The NGRBC set out nine principles that describe what a responsible business looks like in India. They draw on international frameworks such as the UN Guiding Principles on Business and Human Rights, the Sustainable Development Goals and the Paris Agreement, but they are written for Indian conditions.
For analysts, the NGRBC matter because SEBI's Business Responsibility and Sustainability Report (BRSR) is built on them. Section C of every BRSR has one block of disclosures for each principle. Once you know the nine principles, you know where to find any piece of information in a BRSR.
Mechanics
The nine principles
| No. | Principle in short | What it covers | Examples of BRSR indicators |
|---|---|---|---|
| 1 | Ethics, transparency and accountability | Integrity, anti-corruption, conflicts of interest | Fines and penalties, anti-corruption policy, disciplinary action for bribery, training of directors and staff |
| 2 | Safe and sustainable goods and services | Product design, sourcing, life cycle | Spending on sustainable technologies, sustainable sourcing, extended producer responsibility, reclaimed products |
| 3 | Employee well-being, including in the value chain | Pay, benefits, health, safety, leave | Benefits coverage, parental leave, retention, safety incidents, spending on well-being |
| 4 | Respect for all stakeholders | Identifying and engaging stakeholders | Stakeholder groups, engagement channels, engagement with vulnerable groups |
| 5 | Human rights | Respecting and promoting human rights | Human rights training, minimum wages, complaints on harassment, discrimination and child labour |
| 6 | Protecting and restoring the environment | Energy, water, emissions, waste, biodiversity | Energy and water use, Scope 1 and 2 emissions, waste, operations in ecologically sensitive areas, green credits |
| 7 | Responsible public and regulatory policy engagement | Lobbying and trade associations | Memberships of trade bodies, anti-competitive conduct cases, public policy positions |
| 8 | Inclusive growth and equitable development | Communities, local economies | Social impact assessments, rehabilitation and resettlement, sourcing from small producers, jobs in smaller towns |
| 9 | Responsible consumer engagement | Customers, products, data | Consumer complaints, product recalls, data breaches, cyber security policy |
Essential and leadership indicators
Under each principle, the BRSR has two kinds of indicators:
- Essential indicators: mandatory for every company that files a BRSR
- Leadership indicators: voluntary, for companies that want to show more advanced practice
Beyond listed companies
The NGRBC apply to all businesses in India, not only listed ones, but they are guidelines. They become binding only through rules such as SEBI's BRSR requirement for the top 1,000 listed companies.
Sources
From the research
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