Framework that Governance Professionals should know about (Part II)
Part II of the series deals with Private sector integration with SDGs: The Indian Context:
The magnitude and complexity of the challenges to achieving sustainable development is enormous. World over partnerships and collaborative actions form the framework of the world community's action plan for a sustainable future. As a result, at the heart of the Sustainable Development Goals (SDG) NITI Aayog has taken concrete steps to drive partnerships with diverse stakeholders to quicken the progress on SDGs.
2030 Agenda for Sustainable Development titled "Transforming our World: the 2030 Agenda for Sustainable Development" was adopted by 193 United Nation Member countries, including India, in the year 2015. We have now entered into the “Decade of Action” with less than ten years left to achieve the Global Goals.
What is important is that it is partnership among various stakeholders - government, academia, civil society, businesses, development partners, international organizations and of the individual actors that pursue certain specific objectives within the outlines of the Goals.
As Governance Professionals it becomes vital that we understand the current framework in India and also work progressively with Government plans and strategies. These Blogs are a serious endeavor to decode the SDG framework in India.
Part II of the series highlights Private sector integration with SDGs. We have seen various changes in Government policies that are actually aligning with world policies for attaining sustainable development goals. This is a new world language and we are adopting it in our businesses by regulatory and voluntary approaches. Sustainability practices in core business operations have been focused upon globally and emphasized upon during the adoption of the 2030 Agenda.
SDGs provide the framework and direction to firms wherein they can create and protect value for themselves by promoting and integrating sustainability measures in their core business and across the whole value chain; and in turn enhance brand value, increase operational efficiency, and improve staff and customer loyalty (Wynn, M., & Jones, P., 2019).
What the SDGs have provided is a horizon for new business solutions and therefore while some businesses are motivated by their vision to contribute to the overall agenda, for others, contribution towards achieving the Global Goals provide them with social legitimacy and license to operate and with an opportunity to build relationships with all stakeholders through the common language of the SDGs (Schönherr,N., & Martinuzzi, A., 2019).
Government actions in India have been steered towards the SDGs through government policy such as Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013 which stipulates that every company covered by the inclusion criteria of net worth of INR 5 billion or more, or a turnover of INR 10 billion or more, or a net profit of INR 50 million or more should spend at least two percent of their average net profit in the previous three years on CSR activities.
Schedule VII of Companies Act 2013 details the priority areas for utilization of the resources raised for CSR activities which correspondingly map to 15 of the 17 SDGs (Mitra N., Chatterjee B.; 2020). Thus CSR in India will raise financial resources from businesses, and network of NGOs, CSOs and community organizations and will conceptualize and implement many of the SDG projects. CSR is institutionalized through government mandate.
In 2011 Ministry of Corporate Affairs (MCA) issued the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs). The Business Responsibility Reporting (BRR) framework complementing the NVGs was developed through expansive and extensive consultations and as a partnership among businesses, academia, civil society organizations, and the government.
The Securities and Exchange Board of India (SEBI), mainstreamed the BRR framework and its adoption by making Business Responsibility Report filing mandatory for top 100 listed companies by market capitalization. Non-financial disclosures in the BRRs were aimed at institutionalizing reporting on environment and social dimensions of businesses and was extended to the 500 listed companies by 2015-16 and top 1,000 listed companies by December 2019.
In 2015 SDG’s were introduced and the process of updating NVGs began in the same year to better reflect the thrust on sustainable and business responsibility reporting provided by the adoption of the 2030 agenda.
Released in 2019 as the “National Guidelines for Responsible Business Conduct” (NGRBCs), it laid down nine guiding principles which emphasized that business operations were in line with SDGs. The formulation of the NGRBCs which were aligned to the SDGs also necessitated a revision of the SEBI BRR framework to reflect the NGRBCs.
The revised frameworks were brought through the release of the Business Responsibility and Sustainability Report (BRSR) formats in the report of the Committee on Business Responsibility Reporting in 2020.
SDG Investor Map for India is a market intelligence tool which provides localized data and specific information on investment and business opportunities that align with the SDGs. It provides direction and enables an environment for forging impactful partnerships among investors, industry, policy makers, and elected representatives.
It has identified five key sectors as Investment Opportunity Areas (IOAs): education, healthcare, renewable resources and alternative energy, food and beverages, and financials.