India Responsible Business Index (IRBI) can be a bit challenging to figure out initially, even if you’re well-versed in business jargon. If you want to understand what this index does and how it acts as a catalyst for responsible business, read this short guide we’ve prepared for you.
What is India Responsible Business Index in a nutshell?
The India Responsible Business Index (IRBI) is a tool that measures:
- voluntary disclosure by companies
- policy commitments of companies to NVG principles
By measuring the performance of companies on the parameters set by National Voluntary Guidelines (NVGs), the index motivates them to make greater levels of disclosures and policy commitments.
What are the aims of IRBI?
The India Responsible Business Index aims to:
- Make companies transparent & accountable – The NVG principles covered in the index look at ‘community’ and ‘wider public’ as important stakeholders. It simply means any policies made by the company which affect these groups should be available publicly.
- Encourage companies to create good policies – By measuring the commitment of companies to the NVG principles, the index encourages them to be more proactive with their policy-making.
Who created IRBI?
The Index was co-created by 5 organisations – Corporate Responsibility Watch (CRW), Oxfam India, Change Alliance, Praxis Institute for Participatory Practices (Praxis) and Partners in Change (PiC).
What does IRBI measure?
The Index measures how aligned the policies of the top 100 companies are with the National Voluntary Guidelines. It analyses the disclosures made by companies according to these 5 parameters:
- Non-discrimination in the workplace
- Employees’ dignity and human rights
- Community development
- Inclusiveness in supply chain
- Community as business stakeholders
What areas does IRBI not measure?
The IRBI does not measure the compliance or performance of any of the companies against the parameters mentioned above. The index uses company information available in public domain. This information is assumed to be true and is not verified by IRBF externally.
What are the sources of information used for IRBI?
The index uses data provided by companies in the form of:
- Business responsibility reports (also called BRRs)
- Annual reports
- Sustainability reports
- CSR reports
- Policies of companies available in the public domain (for example, on their websites)
- Any other relevant data displayed on their website
What companies are analysed in the index?
The index analyses the business responsibility data of top 100 companies listed on the Bombay Stock Exchange (BSE).
Why does India need IRBI?
The rise of corporate India is not a new phenomenon. After the economic reforms of privatisation, liberalisation and globalisation were implemented in 1991, India soon became one of the fastest growing economies in the world. Today firms like Indian Oil Corporation and Tata Motors are listed in the top 500 corporations worldwide.
With rapid economic growth, businesses need to be more responsible than ever before.
Yet most companies in India think their responsibility is limited to CSR (corporate social responsibility) as directed by the law. Sometimes they even fail at that.
Usually, a company’s compliance with CSR is misunderstood as a sign of the company being responsible. It’s time that the private sector realises that 2% CSR is not enough.
Inequality is stark in India. India’s richest 1 per cent now hold a huge 58 per cent of the country’s total wealth. As corporate India continues to grow, responsible business is the need of the hour. IRBI plays a crucial role in encouraging Indian corporations to do business responsibly.
India has a progressive business responsibility framework in the form of NVGs (National Voluntary Guidelines) which many people do not know about. The Top 500 companies listed on Indian stock exchanges are publishing disclosures according to NVGs. IRBI uses this large and valuable data source to understand how Indian companies perform on sustainability issues.
How is IRBI different from other indices?
If you follow the developments in the business world closely, you might know of several indices and reports out there. But IRBI is a one-of-a-kind index because:
- It looks at social responsibility holistically rather than just CSR based indices
- It is based on the quality of disclosure data which means it looks at its associated policies and mechanisms. Most other indices/ analysis just stop at the quantity of disclosures.
How can the India Responsible Business Index be useful?
Currently, India Responsible Business Index is a tool to analyse policy commitments, mechanisms and systems that companies have created towards responsible business.
The index also looks deeper into certain areas of a company’s policies. For instance, how a company performs when it comes to social inclusion. A company can use such an insight to improve its existing policies and operations.
IRBI also helps companies, consumers and stakeholders to make informed choices about a company, its products and services.
In the long run, the index intends to measure responsible business practice in a systematic manner.
How often does the index come out?
When will the next version of the index come out?
The next index will analyse the data for financial year 2016-17. It will be released in February 2018.
How can you attend the launch of IRBI ?
The next IRBI will be launched in New Delhi in February 2018. If you’re interested in attending the event, stay tuned. The registration link will be up very soon.