You probably know a bit about India Responsible Business Index, but don’t understand it all. Now, we’ve made it easy for you. In this post, we explain all you need to know about IRBI.
What is responsible business?
Responsible business means doing business for good. It not only focuses on profits but also benefits people and the planet. It believes in creating thriving businesses in a just, equitable and sustainable world.
What is IRBI?
IRBI stands for India Responsible Business Index.
It is an index that analyses disclosures, policies, and mechanisms of the top 100 companies listed on the Bombay Stock Exchange (BSE).
IRBI uses the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) framework as defined by the Ministry of Corporate Affairs. The NVGs cover a set of 9 principles, which broadly include social inclusion, environment and product life cycle, ethics and transparency and consumer protection.
The index measures voluntary disclosures, policy commitments and mechanisms made by companies in line with the NVG principles.
Why is it needed?
The private sector in India has grown significantly over the last two decades and its size has increased steadily. As these private companies become more influential and important than ever before, they need to commit to responsible business practices and focus on their impact on society.
To ensure this, the Ministry of Corporate Affairs set up the National Voluntary Guidelines for Social, Environmental and Economic Responsibilities of Business (NVGs) in 2011. Soon after, the Securities and Exchange Board of India (SEBI) directed the top 100 companies to submit a Business Responsibility Report (BRR) every year.
Despite this, there was no reliable way to track and evaluate the disclosures of these companies and check if they were complying with the principles outlined in the NVGs.
The lack of such a system led to the creation of Indian Responsible Business Forum (IRBF) and India Responsible Business Index. The idea was to start talking about how responsibility is an integral part of any business.
Who created IRBI? When was the first index launched?
The index was developed by 6 civil society organisations – Corporate Responsibility Watch, Oxfam, Praxis, Change Alliance and Partners in Change. The first India Responsible Business Index was launched in October 2015.
What NVGS does it include?
It focuses on social inclusion. It is primarily based on NVG Principle 8, which states ‘businesses should support inclusive growth and equitable development’.
Since social inclusion also falls under other principles of NVGs, the index partly covers:
- Principle 2 – Product Life Cycle Sustainability
- Principle 3 – Businesses should promote the wellbeing of all employees
- Principle 4 – Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized
- Principle 5 – Businesses should respect and promote human rights
What data is the index based on?
IRBI uses data available in the public domain and BRR disclosures made by companies (mostly via their websites) to create the index. The index also looks at publicly available policies, annual reports, sustainability reports and corporate social responsibility reports of companies.
What does the index not include?
Though the index is derived from publicly available policies, sometimes companies consider certain policies ‘confidential’ and hence, such information remains unavailable. Also, it does not measure the compliance or performance of the companies in relation with the NVG principles. It examines publicly stated commitments and reported mechanisms only.
Which companies are featured in the index?
As per a 2012 circular of the Securities and Exchange Board of India (SEBI) top 100 companies as per market capitalization listed on Indian stock exchanges were directed to issue annual Business Responsibility Reports (BRRs) as part of their Annual reports. The index covers these top 100 companies listed on the Bombay Stock Exchange.
How often is the index updated?
The index is updated once a year. The next update is underway and will analyse the data for the financial year 2015-16.
When is the next index launch scheduled? How can I attend the event?
The next index will be launched at the India Responsible Business Forum (IRBF) on 14 February 2017 in New Delhi. To learn more about the IRBF and attend its launch, you can register here.