The powerful role of business in India’s development cannot be denied. In fact, the story of India’s businesses has always been closely intertwined with the country’s socio-economic history. For instance, during the Tata Group’s 150-year existence it has played a key role in developing the heavy manufacturing and industrial sector in India. Examples of this include steel production in Jamshedpur and Tata Airlines (which went on to become Air India). In 1944, three years before Independence, a group of eminent industrialists that included JRD Tata, GD Birla, Lala Shri Ram, and economists such as John Mathai and Ardeshir Dalal came out with the Bombay Plan that laid the foundations of the first two Five-Year Plans India adopted for its economic development.
More recently, the philanthropic contributions of organisations towards COVID-19 relief—Tata Sons along with Tata Trusts (INR 1,500 crores), Wipro along with Azim Premji Foundation (INR 1,125 crores), and Aditya Birla Group 1 (INR 500 crores)—continue this legacy of businesses contributing to societal development. Importantly, this is not just through philanthropy but also through business practice.
Now more than ever, given the COVID-19 crisis, we need companies to step up, and lead the charge on ‘building back better’. In this moment of transition lies a chance for businesses across every state to reimagine their purpose and role in creating the ‘new normal’ that we need to see. We suggest five points to consider:
Informal workers form nearly 90 percent of India’s 500 million workforce, yet they are excluded from many legal or contractual protections that form a crucial safety net in times of crisis.
Businesses need to ensure that the most vulnerable—and most essential—workers in their value chains are protected, by creating a radically different social contract with informal workers. A good place to start is by seeking out and supporting current initiatives in your region or sector to protect informal workers, such as Kerala’s efforts led by the labour commissioner Pranabjyoti Nath to document migrant labourers to protect their rights, or Rajasthan-based Aajeevika Bureau that works to solve the legal and socio-economic problems that migrant workers face. Being part of leading initiatives can help you create a better understanding of the complex issues facing the informal work sector, understand the evolving options, and build on best practices.
Next, bring insights back into your organisation to ensure that you have an effective, well-implemented, and comprehensive human rights policy that focuses on tenure security, fair wages, and investment in upskilling contract labourers. Since 2011, the Indian government has introduced guidelines such as the National Guidelines on Responsible Business Conduct (NGRBC) that begin to articulate business’ social responsibility towards all key stakeholders, including but not limited to shareholders. These form an effective starting point for creating or refining your organisational human rights policy, and will help your business to be prepared for the upcoming publication of the Business and Human Rights National Action Plan.
In recent years, labour and environmental laws and regulations have become unfortunate casualties in the race for economic progress. These have been further eroded this year. For instance the lockdown period has seen the controversial introduction of the Draft Environment Impact Assessment 2020 which proposes a dilution of existing norms for protecting ecosystems. In a similar spirit, at least ten states (including Uttar Pradesh and Madhya Pradesh) brought out ordinances to claim exemption from certain labour laws, a move that some experts fear risks both the enterprise and the worker, with other states planning to follow their footsteps. With such dilution and weakening of regulatory norms, businesses are left to being self-accountable in the matters of labour and environmental compliance.
It is in the interest of business to make sure protection for workers and the environment is stronger, rather than weaker.
The interest of business is fundamentally tied to public interest. Companies depend on an underlying public confidence that the business is not harmful to the people and planet, to be able to sell any goods or services, and it serves them to not undermine it. As the field of sustainability has matured, good investment is increasingly flowing to good governance and environmental and social practice. Hence, in these times, it is in the interest of business to make sure protection for workers and the environment is stronger, rather than weaker; and business leaders need to rise above the relaxation of labour and environmental norms and standards. To do this, two fundamental shifts in the business mindset are required. The first is to move from perceiving regulation as the standard to rise to, to seeing it as an absolute minimum bar to beat by far. The second is moving from simply aiming to do less bad, to acting with net positive intent: Aiming to be regenerative and just towards the communities and environments your organisation operates in.
This mindset shift will enable your organisation to set meaningful and ambitious targets, which are commensurate with the science on climate change, biodiversity, and human survival. The UN’s Sustainable Development Goals and Guiding Principles on Business and Human Rights, as well as India’s nationwide commitments to the 2015 Paris Climate Agreement are a good place to start as they are almost universally accepted as necessary standards to meet. Going public with your commitments will also help to make a strong statement of intent and purpose. In this process you can join high profile, global initiatives to stand alongside pioneering companies and demonstrate your leadership. Some examples include RE100, which brings together the world’s most influential businesses committed to 100 percent renewable electricity and EV100, focused on accelerating the transition to electric vehicles (EVs).
Before lockdown, working remotely from home was simply not part of the working culture in India, with the exception of some tech companies. The lockdown, having necessitated online working for much of the country’s office-bound staff, has changed that. Senior managers and leaders who may have been reluctant to allow remote working within their teams previously, now have no choice but to trust their employees to maintain productivity at home. While a recent HBR study indicates early hiccups emerging in the form of trust issues between remote managers and workers, the same study observes that practical support, training and a genuine commitment to flexible working from the company appears to increase managers’ self-efficacy for leading remote workers. A number of companies such as Tata Consultancy Services have announced plans to keep remote working an option for their employees, even after the lockdown is fully lifted. Anecdotally, many business leaders have also remarked on the levelling and trust-building effect that online working has enabled.
Consider modelling leadership behaviour to be more open and flexible, to help soften traditionally rigid hierarchies.
So, how can businesses build and maintain the mutual trust that remote working thrives upon, and even extend it to other staff, for instance, contractual or informal staff recruited for housekeeping or cleaning services? Consider modelling leadership behaviour to be more open and flexible, to help soften traditionally rigid hierarchies. It’s possible to ensure that all voices are heard, even with simple steps like creating awareness of our implicit biases and differences in conversational style. For example, seeing who might be comfortable speaking up in groups, who may need little or no silence before raising their hands, or who may speak out easily without waiting to be recognised. These seemingly small steps can go a long way towards building trust in and amongst your workforce.
Even office layouts can help with this. For example, with more spaces designed for collaborative working, enable more opportunities for interaction across hierarchy, and for shifts in culture. Providing the tools and freedom for employees to mix physical and remote working will not only lead to greater staff satisfaction, but also increase flexibility for organisations to manage further disruption to their operating contexts. Other positive knock-on effects include reduced traffic, which means your supply chain logistics are faster and more reliable, and air pollution, which leads to fewer hours lost to illness, and interestingly, for the talent pipeline, better cognitive development. The recent lockdown, which reduced work commuting, had a positive impact on air quality in many Indian cities.
The clear skies over Mumbai and Delhi during lockdown were a telling reminder of how much human activity—and business activity above all—influences the environment we live in. Unfortunately, we can already see that familiar haze creeping back.
Air quality is directly linked to human health, to staff productivity, and organisational health. It is the responsibility of every business to play its part in ensuring the improved air quality is here to stay, by taking action across the organisational footprint to reduce polluting outputs. For example, far-sighted companies such as Accenture, Wipro, Tesco, and E&Y have already begun to deploy electric vehicles for their employee transport, supply chain, and logistical needs. Being open and flexible with staff’s remote working arrangements, and—when it’s safe—encouraging public transport, cycling, and walking to work, can also play a big part in reducing the number of vehicles on the road.
Now is the time to put clean technology firmly at the centre of capital investment decisions, by backing technologies like Carbon Capture and Storage (CCS), renewable energy and storage at scale, and EV ventures. Opportunities abound not just in direct investment, but also in supporting infrastructure such as growing networks of EV charging outlets and in nature-based solutions like urban green infrastructure.
Now is the time to put clean technology firmly at the centre of capital investment decisions.
Businesses also need to take proactive action to ensure products do not enter our waterways and oceans as plastic waste and debris. For instance, if you take a walk along the shore or the street in urban India, it is clear that Personal Protective Equipment (PPE) items are frequently discarded irresponsibly, not only posing a public health hazard, but also making their way into India’s water system. Is it possible to work with local municipal authorities on advisory campaigns educating residents on how to dispose of their PPE safely?
And, what is the role businesses can play in addressing the dual issues of water supply and quality in their own footprint, and the value chain in which they operate?
Auditing the impact of your organisation’s water footprint doesn’t have to be done in isolation. Organisations such as ZDHC can—and already do—play a strong supporting role in helping businesses improve water management. This includes implementing Zero Liquid Discharge (ZLD) and other closed loop systems to remove liquid waste and preserve water volume, and quality, as well as putting rainwater harvesting systems in place to replenish groundwater. Factory processes need to be appropriate or net positive for the watershed they sit within, and should not run counter to the water needs of locals.
Every business has the potential to move beyond its organisational boundaries to play a more proactive role in advocating change, both in governmental policy and with other organisations in their value chains.
As a company, if you make public your commitments to better employee and worker rights, environmental protection, the reduction of emissions, and better water quality, it can send a powerful message to government and provide leadership for others to follow. With their IPO last year, Levi Strauss became proof of the importance of a strong public stance on sustainability to investors and access to capital. They are now part of the growing pool of ESG investments—funds or investments where environment, social, and governance considerations are incorporated—that are outstripping the mainstream market in terms of performance. Even in the current situation, WBCSD found that their members, who typically fall under the ESG investment banner, are navigating the COVID-19 crisis more successfully than the broader market. More than ever before, we can be sure that a public stance on sustainability can pay.
As the country decides how it rebuilds from the COVID-19 crisis, the next six to 18 months will be critical in setting India on a path towards achieving its climate and sustainable development goals. It has never been more important for business to play its traditional leadership role and spearhead transformative change, both at a grassroots and policy level. It is up to us to now create the future that we want to see.
- Disclaimer: Aditya Birla Group (ABG) is a long-term partner of Forum for the Future India, which advises ABG on its sustainability strategy.
- Read this report about the future pathways and pressure points emerging from the COVID-19 crisis, and what leaders across society can do to navigate current uncertainty and work for a more just and regenerative economy.