In 2017, 73% of the wealth generated in India went to the richest 1%. 67 crore Indians, who happen to be the poorest half of the population, had little to gain. Their wealth increased just by 1%.
In a country with such deep seated inequality that continues to grow unchecked, how can the private sector correct this imbalance? Will investors ever put their foot down and make companies take the equality and dignity of workers seriously?
At IRBF 2018, the panel discussion Investing in Equality and Dignity looked right into the heart of this matter. This session was chaired by Kiran Karnik, Chairperson, OXFAM India.
1. LGBT are an invisible minority in companies
Even today, 73 countries have serious criminal penalties for people with different sexual orientations.
“It is extremely hard for someone to come out and talk about their sexual orientation if there is an atmosphere of bullying, harassment, jokes and even violence at the workplace”, said Salil Tripathi, Senior Advisor, Global Issues, Institute of Human Rights and Business.
“LGBT is not a visible minority”, said Salil. He shared 3 principles that organisations can uphold to support LGBT rights at work. “Respect human rights, eliminate discrimination by allowing people to bring themselves fully into the office just as who they are and provide them support”, he said.
“As a business, you cannot deny a wedding cake or accommodation to a same sex couple. There should be complete absence of human rights abuse when you are offering a product to the public.”
“Any company that discriminates against a specific set of customers or employees is a loser…discrimination is always wrong and discrimination against an invisible minority like the LGBT is even more wrong”, said Salil.
2. Women are missing from the workforce – at all levels
Last year, India ranked 139th out of 144 countries in the Global Gender Gap Index. The poor rank was attributed low economic participation of women and lack of opportunities for them.
“Investing in girls and women is not just good for business, but it is also good for the country. 27% of the workforce comprises women. When we invest in women in the workforce, we invest in a higher GDP”, said Harpreet Kaur, Deputy Director, Genpact Centre for Women’s Leadership, Ashoka University.
She said, “85% of the global workforce in the garment manufacturing sector are women yet there is not even a single woman CEO among the top 15 apparel companies. This industry is largely run by women, for women and still there are no women in leadership positions in the garment sector.”
3. Investors are still shying away from ESG
23 trillion dollars of global assets are invested in ESG strategies. Out of these, 30 million dollars are directed towards responsible investment in India. How many investors take equality and dignity of people seriously?
Pavan Rao, Head of Finance (Utilities), Wipro Limited described 3 different categories of investors based on their approach to responsible investment.
“The first group of investors look at regular investment, with an added ESG criteria. The second category do ESG for value alignment and use it as a primary criteria in asset screening. They want their investment to make a difference in the world. The third category is investors who avoid sin goods but have the potential to evolve”, said Pavan.
“Despite the evidence that incorporating ESG strategies can result in above median returns, there has not been much traction in India.”
“It’s not that all major investors do not bother about ESG…but global investors are still grappling with social factors. Most of them only care about social issues if there are legal repercussions.”
4. There is very little data available on ESG
Salil mentioned how data on LGBT workers is hard to get particularly because of “social and legal pressure.”
He said, “Companies need to make information public but at the same time, they need to respect the privacy of their employees in case they don’t want such data to be shared. Most people in business will tell you that it is very hard to make decisions without data.”
Even data on gender is barely available. “To achieve the SDG for gender equality, only 20% data is available right now globally”, said Harpreet. She said that the lack of gender data impedes programme design and intervention.
“At Genpact Centre for Women’s Leadership, we are asking CEOs for three things – disclose gender data, empower women in leadership and in the organisation. Many of the CEOs are okay with signing on to two of these commitments but the data on gender is missing”, she said.
“There is a big fear of disclosing gender data. It is a huge problem not only in India but also globally.”
5. Women, LGBT and civil society are missing from boardrooms
A conversation on responsible investment is incomplete without looking at a company’s boardroom.
“There is a trend of boosting women’s participation in company boards but is it really moving in the right direction? You can provide women a seat on the table but what they need is an enabling environment to voice their concerns and be heard”, said Harpreet.
Harpreet also pointed out that having independent women directors on the board is very different from having the owner’s wives or relatives on the board. She said, “I think having independent directors is a good move but we are a long way from making gender diversity in boardrooms a reality.”
Salil spoke about how boardrooms could ensure LGBT representation. He said, “I think it can only work if there is legal and social acceptance of the LGBT community.”
Kiran Karnik drew the discussion to a close with some more food for thought. He said, “I don’t know how many companies in India have civil society representatives on their boards. That diversity, too, is missing.”