5/2/24, 10:26 AM Guide to ESG in India – Features | Principles | Reporting Requirements

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Guide to ESG in India – Features | Principles | Reporting Requirements

Guide to ESG in India – Features | Principles |

Reporting Requirements

Other Laws | Blog | 15 Min Read

By Taxmann | Last Updated on 6 March, 2024

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5/2/24, 10:26 AM Guide to ESG in India – Features | Principles | Reporting Requirements

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Table of Contents
1. ESG Evolution in India
2. Ten Point Charter
3. Voluntary Corporate Social Responsibility Guidelines
4. National Voluntary Guidelines
5. Business Responsibility Reporting (BRR)
6. Transition from NVGs to NGRBC
7. National Guidelines on Responsible Business Conduct (NGRBC)
8. Changes between NVG & NGRBC
9. Key Features of NGRBC
10. Nine Principles of NGRBC

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A detailed understanding on each Indian Instrument pertaining to ESG is presented while

describing it in the process of evolution only. Key ESG Trends and Issues in Indian Context have
also been presented. It is also pertinent to understand that when we consider evolution of ESG in
Indian Context, we study among others:
National Voluntary Guidelines on Social, Environmental, and Economic Responsibilities of
Business (NVGs), 2011
Business Responsibility Report (BRR), 2012
National Guidelines on Responsible Business Conduct (NGRBC), 2019
Business Responsibility and Sustainability Reporting (BRSR)
BRSR CORE and LITE Versions.
1. ESG Evolution in India
The National Voluntary Guidelines on Social, Environmental, and Economic Responsibilities of
Business (NVGs) were published in 2011 by the Ministry of Corporate Affairs, Government of
India. It offered guidance to companies on what constituted ethical business behaviour. SEBI
brought out the Business Responsibility Report (BRR) requirement in 2012 which was on
disclosures on responsible business, to be done based on the NVGs. Following global
developments, the NVGs were revised in 2018 in order to bring them in line with the Sustainable
Development Goals (SDGs), the United Nations Guiding Principles on Business & Human Rights
(UNGPs), as well as the emerging global issues. Hence, NVGs were revised and new guidelines
were released namely, National Guidelines on Responsible Business Conduct (NGRBC) in 2019
following extensive stakeholder con- sultations. The NGBRC was developed to help companies
adopt the concept of responsible behaviour beyond the requirements of regulatory compliance.

(https://taxmann.social/guZop)
A Committee on Business Responsibility was constituted for finalising Business Responsibility
Reporting formats for listed and unlisted companies. Report of this Committee recommended
that BRR be updated to BRSR. Based on the NGRBC and report of the Committee on Business
Responsibility Reporting, SEBI notified the BRSR format. The disclosures as per the BRSR
framework were made mandatory for the top 1000 listed companies (by market capitalisation) in
India from FY 2022-23, while the disclosures were voluntary for FY 2021-22 for these companies.
SEBI has also introduced the ‘BRSR Lite Framework’ for unlisted companies, which covers the
essential aspects of ESG reporting for any kind of businesses in country. It is expected that the
reporting requirement may be extended by the Ministry of Corporate Affairs to unlisted

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companies above a specified threshold of turnover or paid-up capital. Further, the Committee
recommends that smaller unlisted companies below this threshold may, to begin with, adopt a
Lite version of the format, on a voluntary basis.
The BRSR Core framework is a new regulatory framework for enhancing the ESG disclosures by
India’s top 1,000 listed entities. It was introduced by the Securities and Exchange Board of India
(SEBI) on March 29, 2023, as a subset of the wider Business Responsibility and Sustainability
Reporting (BRSR) framework that SEBI had launched in May 2021. The Gazetted notification came
on 12 July 2023 and it prescribes the disclosure and assurance requirements for BRSR Core ESG
disclosures for value chain, and assurance requirements. Now listed companies are also expected
to mandatorily undertake Reasonable Assurance of BRSR Core, it has been notified that 150 top
companies will undertake in FY 23-24, 250 in 24-25,
500 in 25-26 and 1000 in FY 26-27.
Table: Evolution of Business Responsibility Frameworks in India

Year Initiative

2007 Ten Points Charter by the Hon’ble Prime Minister;

2009 Voluntary Corporate Social Responsibility Guidelines;

2011 Endorsement of United Nations Guiding Principles on Business & Hu

man Rights by India;

2011 Ministry of Corporate Affairs issued National Voluntary Guidelines (N

VGs) on Social, Environmental and Economic responsibilities of Busin
ess;

2012 SEBI mandates top 100 listed companies by market capitalization to f

ile Business Responsibility Reports (BRR) based on NVGs;

2014 Introduction of the CSR Provisions in the Companies Act, 2013;

2015 SEBI extends BRR reporting to top 500 companies by market capitaliz
ation;

2019 Ministry of Corporate Affairs released the National Guidelines on Res

ponsible Business Conduct (NGRBC).

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2. Ten Point Charter

In May 2007, the then Prime Minister of India, Shri Manmohan Singh, proposed a Ten Point
Charter for Business that included: the inclusive employment and humane treatment of workers,
investments in communities, ethical practices in all business dealings, investments in
environment-friendly practices and technology, promotion of socially-responsible media and
advertising, responsible consumption, and promotion of enterprise and innovation. This was in
response to contemporary media and civil society reports of high-profile cases of social,
environmental and economic violations by businesses and the resultant negative impacts on
different stakeholders and on economic activity. At the same time, business needed to positively
contribute more actively to the national goals of inclusive growth and sustainable development.
3. Voluntary Corporate Social Responsibility
Guidelines
All the issues in ten point’s charter remained relevant and found place in the voluntary Corporate
Social Responsibility Guidelines-released by the Ministry of Corporate Affairs in 2009. The
guideline, in its preamble, outlines the context, state that the 21st century is characterised by
unprecedented challenges and opportunities arising from globalisation, including the desire for
inclusive growth and the imperatives of climate change. The guidelines comprise six core
elements:
(a) Care for all stakeholders
(b) Ethical business practice
(c) Respect for Worker’s Rights and Welfare
(d) Respect for Human Rights
(e) Respect for the Environment
(f) Activities for Social and Inclusive Development.
Guidelines Drafting Committee
Based upon stakeholder feedback for a more comprehensive guideline, the Indian Institute of
Corporate Affairs (IICA) was tasked by the Ministry of Corporate Affairs to undertake the process
of ‘review and elaboration’ of the Guidelines, and a multi-stakeholder Guidelines Drafting
Committee (GDC) was constituted in 2009, its mandate was as under:
(a) To formulate a draft framework guideline for social, environmental responsibilities of
business, which would be offered to enterprises for voluntary adoption with wide
applicability across all enterprises, irrespective of their size, and that the guidelines serve to
ultimately enhance the performance of business.
(b) To specifically ensure that the framework addresses the concerns of Inclusive Growth
and Sustainability.

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Further, the GDC was encouraged to ‘draw insights from good-practices and international norms
and frameworks, as well as from national resources in as much as they help to address Indian
particularities. In particular, the GDC took cognizance of key international and national
resources focussing on business responsibility and sustainability issues which included:
(a) The International Standards Organisation (ISO)’s Corporate Social Responsibility
Guideline (ISO 26000), as an example of a voluntary, holistic and certifiable standard
(b) The UN Global Compact, as an example of a UN-sponsored voluntary code for companies
(c) The OECD Guidelines for Multinational Enterprises, as an example of State-sponsored
and supported initiative
(d) The Global Reporting Initiative (GRI), as an example of a holistic voluntary disclosure
and reporting framework for companies
(e) Bureau of Indian Standards (BIS): IS 16000, as an example of a domestic workplace
standard
(f) Department of Public Enterprises- CSR & (Community Development) Guidelines, as an
example of state-driven guidelines for community development initiatives by companies in
the public sector.
4. National Voluntary Guidelines
Ministry of Corporate Affairs released National Voluntary Guidelines (NVGs) on Social,
Environmental and Economic Responsibilities of Business in 2011. NVGs comprise inter-related
and inter-connected Nine Principles. Each of the nine Principles is explained through a Brief
Description and accompanied by attendant Core Elements. the principles can be broadly
aggregated as Social (P3, P4, P5, P8 and P9) Environmental (P2, P6 or Governance (P1 and P7). The
Social can be further sub-divided into stakeholder-specific principles (P3, P8 and P9) and cross-
cutting ones (P4 and P5).
Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and
Accountability
Principle 2: Business should provide goods and services that are safe and contribute to
sustainability throughout their life cycle
Principle 3: Businesses should respect and promote the well-being of all employees
Principle 4: Businesses should respect the interests of, and be responsive towards all its
stakeholders, especially those who are disadvantaged, vulnerable and marginalized
Principle 5: Businesses should respect and promote human rights
Principle 6: Businesses should respect, protect, and make efforts to protect and restore the
environment
Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so
in a responsible manner
Principle 8: Businesses should support inclusive growth and equitable development
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Principle 9: Businesses should engage with and provide value to their customers and consumers
in a responsible manner.
(Ministry of Corporate Affairs, 2011)
5. Business Responsibility Reporting (BRR)
Business Responsibility Report (BRR) was introduced in India as part of the Annual Reports for
the top 100 listed companies based on market capitalization in 2012. The format of BRR was
based on the National Voluntary Guidelines (NVGs) issued by the Ministry of Corporate Affairs.
The evolution of Business Responsibility Reporting in India can be traced back to the Corporate
Voluntary Guidelines in 2009 and the endorsement of United Nations Guiding Principles on
Business & Human Rights by India in 2011. The Committee on Business Responsibility Reporting
proposed two formats for disclosures: a comprehensive format and a Lite version is a disclosure of
adoption of responsible business practices by a listed company to all its stakeholders. This report
is applicable to all types of companies including manufacturing, services, etc. The report is
important considering the fact that these companies have accessed funds from the public, have
an element of public interest involved, and are obligated to make exhaustive disclosures on a
regular basis.
6. Transition from NVGs to NGRBC
The Ministry of Corporate Affairs (MCA), Government of India, released a set of guidelines in 2011
called the National Voluntary Guidelines on the Social, Environmental and Economic
Responsibilities of Business (NVGs). This was expected to provide guidance to businesses on what
constitutes re- sponsible business conduct. In order to align the NVGs with the Sustainable
Development Goals (SDGs) and the ‘Respect’ pillar of the United Nations Guiding Principles
(UNGP) the process of revision of NVGs was started in 2015. After, revision and updation, the new
principles are called the National Guidelines on Responsible Business Conduct (NGRBC). As with
the NVGs, the NGRBC has been designed to assist businesses to perform above and beyond the
requirements of regulatory compliance.
In 2017, Ministry of Corporate Affairs took a considered view, that given the various significant
international and national developments had taken place related to the business responsibility
domain and since sufficient time had elapsed since the NVGs were released 2011, the NVGs
should be updated to include such developments, which may include: the UNGPs, the UN SDGs,
Paris Agreement on Climate Change, Ratification in 2017 of ILO Core Conventions 138 and 182 on
child labour, SEBI’s 2012 notification for Annual BR Reports and the Ministry of Corporate
Affairs’ notification in the Companies Act, 2013 mandating companies to undertake CSR among
others. Emerging global risks in respect of ESG were also considered. Accordingly, the review
exercises and multi-stakeholders consultations were organized throughout the country and
comments were sought from public and stakeholders. After considering due processes, the
National Guidelines for Responsible Business Conduct (NGRBC) came into shape as an
update/new version to the NVGs.
The primary rationale for the update is to capture key national and international developments
in the sustainable development agenda and business responsibility field that have occurred since
the release of the NVGs in 2011. Some of the key drivers behind the emergence of NGRBC are
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listed below:
Core Conventions 138 and 182 on Child Labour by the International Labour Organization
(ILO)
SEBI Annual Business Responsibility Reports (ABRRs)
Section 135 of the Companies Act, 2013
The UN Guiding Principles for Business and Human Rights (UNGPs)
UN Sustainable Development Goals (SDGs)
Paris Agreement on Climate Change (2015).
The NGRBC are designed to be used by all businesses, irrespective of their ownership, size, sector,
structure or location. It is expected that all businesses investing or operating in India, including
foreign multinational corporations (MNCs) will follow these guidelines. Furthermore, the NGRBC
reiterate the need to encourage businesses to ensure that not only do they follow these guidelines
in business contexts directly within their control or influence, but that they also encourage and
support their suppliers, vendors, distributors, partners and other collaborators to follow them.
7. National Guidelines on Responsible Business
Conduct (NGRBC)
Government of India launched National Voluntary Guidelines on Economic, Social and
Environmental Responsibilities of Business in 2007 which were revised in 2009 and 2011. The
next revision was introduced as the National Guidelines on Responsible Business Conduct of
Business, replacing the earlier guidelines. (Ministry of Corporate Affairs, Govt. of India, 2018).
Nine principles for performance disclosures are:
(a) Ethical, Transparent and Accountable conduct
(b) Provide goods and services in sustainable and safe way
(c) Promote the well-being of all employees including those in value chain
(d) Respect the interests of all shareholders
(e) Promote human rights
(f) Protect and restore the environment
(g) Transparent engagement in public policy
(h) Inclusive growth and equitable development
(i) Provide value to their consumers responsibly
(Ministry of Corporate Affairs, 2019)
A notion about the NGRBC among the readers may be that NGRBC is a business responsibility
reporting tool. No doubt that NGRBC provide a framework of reporting also but it is not its mere
function. NGRBC is a step by step guide for adopting responsible business conduct by a business.
The NGRBC are designed to be used by all businesses, irrespective of their ownership, size, sector,
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structure or location. It is expected that all businesses investing or operating in India, including
foreign multinational corporations (MNCs) will follow these guidelines. Correspondingly, the
NGRBC also provide a useful framework for guiding Indian MNCs in their overseas operations, in
addition to aligning with applicable local national standards and norms governing responsible
business conduct.
Considering the national and international developments in the domain of RBC, the nine
principles of NVGs have been modified and words such as sustainable, integrity, and respect were
included in NGRBCs. This highlights the MoCA commitment towards the advancement of RBC.
While NVGs had 48 Core Elements in the updated NGRBC there are 53 Core Elements.
8. Changes between NVG & NGRBC
An overview of modifications is presented in the table below:

NGRBC 2019 NVG 2011

1. Businesses should conduct and Businesses should conduct and govern

govern themselves with integrit themselves with Ethics, Transparency
y in a manner that is ethical, tra and Accountability
nsparent and accountable

2. Businesses should provide good Businesses should provide goods and s

s and services in a manner that ervices that are safe and contribute to
is sustainable and safe sustainability throughout their life cyc
le

3. Businesses should respect and p Businesses should promote the well be

romote the well-being of all emp ing of all employees
loyees, including those in the va
lue chain

4. Businesses should respect the i Businesses should respect the interest

nterests of and be responsive to s of, and be responsive towards all stak
all its stakeholders eholders, especially those who are disa
dvantaged, vulnerable and marginalise
d

5. Businesses should respect and p Businesses should respect and promot

romote human rights e human rights

6. Businesses should respect and Business should respect, protect, and

make efforts to protect and rest make efforts to restore the environme
ore the environment nt

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7. Businesses, when engaging in i Businesses, when engaged in influenci

nfluencing public and regulator ng public and regulatory policy, should
y policy, should do so in a mann do so in a responsible manner
er that is responsible and trans
parent

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8. Businesses Businesses should support inclusive gr
usive growth and equitable deve owth and equitable development
lopment
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9. Businesses
[Analysis] should
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mers in a responsible manner sumers in a responsible manner
Other Laws, Blog

The NGRBC are the framework that companies can use to integrate RBC practices into their
operations and strategy in order to keep pace with the rapidly changing business environment
and thrive in the uncertain world we live in.
9. Key Features of NGRBC
The NGRBC consist of two chapters and an expanded set of annexures*
NGRBC Principles have been updated, but they have retained the articulation and
description of NVGs.
More emphasis on Core elements of the principles
Practical guidance to businesses to adopt NGRBC
Practical guidance on implementation of NGRBC
Business case for MSMEs has been given
Updated Business Responsibility Reporting (BRR) Framework
Serves as a tool for the companies to assess company’s initiatives towards responsible
business conduct
Serves as tool to identify opportunities to improve responsible business conduct
Serves as a framework for regulators to develop disclosure formats.
*The Guidance has following annexure:
Digital Marketing
Guidance on–adoption
StrategiesofforNGRBC
Content Creation | Viral Campaigns | Social Media Advertising
(https://www.taxmann.com/post/blog/digital-marketing-strategies-for-content-creation-viral-
Guidance for Micro, Small and Medium Enterprises
campaigns-social-media-advertising/)
Business Responsibility Reporting Framework
Latest from Taxmann
SDGs mapped against NGRBC
Business Case Matrix

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Guidance for businesses on using BRRF as a self-assessment tool

Indicative Mapping of Indian Laws and Principles against NGRBC
Resources and reference list.
10. Nine Principles of NGRBC
Principle 1 – Businesses Should Conduct and Govern Themselves with Integrity, and in a
Manner that is Ethical, Transparent and Accountable
This Principle recognizes that ethical behaviour in all operations, functions and processes, is the
cornerstone of businesses guiding their governance of economic, social and environmental
responsibilities. The Principle emphasizes that disclosures on business decisions and actions
that impact stakeholders form the fundamental basis of operationalizing responsible business
(https://taxmann.social/Qr6a3)
conduct and should be accessible to all relevant stakeholders. It recognizes that businesses are
an integral part of society and that they will hold themselves accountable for the effective
adoption, implementation, and the making of disclosures on their performance with respect to
the Core Elements of these Guidelines. The Principle further emphasizes that the governance
structure of the business should ensure this, in line with SDG 16 i.e. peace, justice, strong
institutions. Essential indicators of this principle are based on awareness generation in the value
chain and among multi-stakeholders, complaints arise, their disposal and unmet fiscal and social
obligations. The leadership indicators support in disclosures and disseminating the disclosures.
Principle 2 – Businesses should provide goods and services in a manner that is sustainable
and safe
This Principle recognizes the proposition of SDG 12, that sustainable production and
consumption are interrelated, contribute to enhancing the quality of life and towards protecting
and preserving earth’s natural resources. The Principle further emphasizes that businesses
should focus on safety and resource efficiency in the design and manufacture of their products,
and use their products in a manner that creates value while minimizing and mitigating its
adverse impacts on the environment and society through all stages of its life cycle, from design to
final disposal. Over time, businesses should embrace the idea of circularity in all its operations.
In order to do so, the Principle encourages businesses to understand all material sustainability
issues across their product life cycle and value chain. The performance disclosure indicators for
this principle includes goods and services incorporating environmental and social concerns, risks
and opportunities, investment, raw material and processes adopted and impact of products
across value chains.
Principle 3 – Businesses should respect and promote the well-being of all employees,
including those in their value chains
This Principle encompasses all policies and practices relating to the equity, dignity and well-
being, and provision of decent work (as indicated in SDG 8), of all employees engaged within a
business or in its value chain, without any discrimination and in a way that promotes diversity.
The principle recognizes that the well-being of an employee also includes the well being of
her/his family. Some of the Disclosure indicators under this principle are – complaints received

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and resolved, status of the employee associations, child and forced labour in value chains, wages
and wage ratio, harassment and safety at workplace, skill upgradation of employees among
others.
Principle 4 – Businesses should respect the interests of and be responsive to all its
stakeholders
This Principle recognizes that businesses operate in an eco-system comprising a number of
stakeholders, beyond shareholders and investors, and that their activities impact natural
resources, habitats, communities and the environment. The Principle acknowledges that it is the
responsibility of businesses to ensure that the interests of all stakeholders, especially those who
may be vulnerable and marginalized, are protected. The Principle further recognizes that
businesses have a responsibility to maximize the positive impacts and minimize and mitigate the
adverse impacts of its products, operations, and practices on all their stakeholders. Essential
disclosure indicators are related to the list of stakeholder groups, processes, local engagements,
frequency of engagement, marginalized groups etc.
Principle 5 – Businesses should respect and promote human rights
This Principle recognizes that human rights are rights inherent to all human beings, and that
everyone, individually or collectively, is entitled to these rights, without discrimination. It further
recognizes that human rights are inherent, inalienable, interrelated, interdependent and
indivisible. The Principle is inspired, informed and guided by the Constitution of India and the
International Bill of Rights and recognizes the primacy of the State’s duty to protect and fulfil
human rights. The Principle is further informed and guided by the UN Guiding Principles on
Business and Human Rights in its articulation of the responsibility of businesses to respect
human rights. It affirms that the responsibility of businesses to respect human rights requires
that it avoids causing or contributing to adverse human rights impacts, and that it addresses
such impacts when they occur. The Principle urges businesses to be especially responsive to such
persons, individually or collectively, who are most vulnerable to, or at risk of, such adverse human
rights impacts. Some of the indicators in reporting under this principle are – training on human
rights, human rights policies and their coverage, stakeholders groups for reporting human rights
violations, corrective actions, human rights due diligence etc.
Principle 6 – Businesses should respect and make efforts to protect and restore the
environment
This Principle recognizes that environmental responsibility is a prerequisite for sustainable
economic growth and for the well-being of society. The Principle emphasizes that environmental
issues are interconnected at the local, regional and global levels, which makes it imperative for
business- es to address issues like pollution, biodiversity conservation, sustainable use of natural
resources and climate change (mitigation, adaptation and resilience) in a just, comprehensive and
systematic manner. These are aligned with SDGs 11, 13, 14 and 15. The Principle encourages
businesses to assess environment impacts of its products and operations and take steps to
minimize and mitigate its adverse impacts where these cannot be avoided. The Principle
encourages businesses to adopt environmental practices and processes that minimize or
eliminate the adverse impacts of its operations and across the value chain. The Principle
encourages businesses to follow the Precautionary Principle in all its actions. Essential
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disclosure indicators for the principle are – potential risks on environment and good practices in
reuse, recycling and reduction the risks, collective action, specific contribution, and creation of
new business product/service etc.
Principle 7 – Businesses, when engaging in influencing public and regulatory policy, should
do so in a manner that is responsible and transparent
This Principle recognizes that businesses operate within specified national and international
legislative and policy frameworks, which guide their
growth and also provide for certain desirable restrictions and boundaries. The Principle
recognizes the legitimacy of businesses to engage with governments for redressal of a grievance
or for influencing public policy. The Principle emphasizes that public policy advocacy must
expand public good. Disclosures related to the affiliations with trade bodies, industry
associations, political parties, monetary contributions, public policy advocacy positions, and
corrective actions related indicators are done.
Principle 8 – Businesses should promote inclusive growth and equitable development
This Principle recognizes the challenges of social and economic development faced by India, and
builds upon the national and local development agenda as articulated in government policies and
priorities. This is particularly significant in zones affected by social disharmony and low human
development. The Principle recognizes the value of the energy and enterprise of businesses and
encourages them to innovate and contribute to the overall development of the country with a
specific focus on disadvantaged, vulnerable and marginalized communities, as articulated in
Section 135 of the Companies Act, 2013. The Principle also emphasizes the need for collaboration
amongst businesses, government agencies and civil society in furthering this development
agenda in line with SDG 17. The Principle reiterates that business success, inclusive growth and
equitable development are interdependent. Disclosure indicators are – social impact of business
operations, contribution to vulnerable and marginalized sections of society, relations with local
communities, CSR interventions as per the Companies Act, 2013, etc.
Principle 9 – Businesses should engage with and provide value to their consumers in a
responsible manner
This Principle is based on the fact that the basic aim of a business entity is to provide goods and
services to its consumers that are safe to use, and in a manner that creates value for both. The
Principle recognizes that consumers have the freedom of choice in the selection and usage of
goods and services, and that the enterprises will strive to make available products that are safe,
competitively priced, easy to use and safe to dispose of, for the benefit of their consumers. The
Principle also recognizes that businesses should play a key role, along with other relevant
stakeholders, in mitigating the adverse impacts that excessive consumption of its products may
have on the overall well-being of individuals, society and our planet, in line with SDG 12. Some of
the disclosure indicators are – adverse impact of goods or service in public domain, consumer
complaints, advertising, delivery, corrective actions, international/national product label and
certifications, etc.

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