Linked to a BSR initiative, this three-part series asks guest experts from emerging economies for their opinions on the role and future of business in sustainability. The second post explores the notion of a "well-off society" in China, and the third explores focusing on more than profits for responsible growth.
While in a meeting with senior government officers, I posed the question, “What has changed in the government in the last decade?” Among the many changes they mentioned, engaging with the private sector for public-private partnerships emerged as a significant area of opportunity and concern.
When I posed the same question to directors of nonprofit organizations, they mentioned that they had to deal with the business sector not only for funding but increasingly, also for program delivery. One of the participants explained, “The role of the corporate sector in India is all-pervasive, and all of us need to learn to work with them. They have deep pockets, have good networks, possess strong competence in many areas, and their influence transcends the geographical boundaries of a nation state.” For a country with wide disparities in income, access to education, maternal health outcomes, and employment, this statement is quite telling.
Compared with the rest of the world, businesses in India are viewed favorably by the general public, which widely recognizes their contribution to society through philanthropy. There is an expectation from the public, however, that the private sector will play a significant role in economic and social development—not just through employment generation but more importantly, by “being good citizens.”
The performance of businesses on the social agenda and in living up to this expectation is mixed. Only a few corporations tend to play a positive role in complying with and being champions for good governance, environmental stewardship, and ethical conduct. A large number of businesses continue to have a dominant charity orientation, with very little awareness of stakeholder expectations. In the small and medium sector, there is a need for greater awareness and action to make businesses responsible.
Several recent initiatives are likely to drive organizations to behave more responsibly going forward. The recent National Voluntary Guidelines on the Social, Environmental, and Ethical Responsibilities of Business in India, created through a process of consultation by the Indian Institute of Corporate Affairs, is a case in point. These guidelines provide opportunities for businesses to understand the impact of their actions and embed responsible behavior in operations and strategy. Additionally, political activism has contributed significantly to environmental management and sustainability discourse in India. In recent years, several civil society organizations are effectively playing both an activist and a policy support role for responsible business. We believe that such actions and initiatives by varying stakeholders will put pressure on businesses to demonstrate higher standards of ethical conduct and social responsibility.
In a diverse country such as India, where states are in different stages of economic and social development, to expect that a single model of corporate responsibility will work effectively is naïve. Approaches to building responsibility must be plural, contested, and negotiated. In this context, one initiative by one stakeholder will be a drop in the ocean. Multiple initiatives working in tandem, however, will set the stage for enhanced responsible behavior on the part of the private sector in India.