NGRBC
Also written National Guidelines on Responsible Business Conduct
National Guidelines on Responsible Business Conduct — nine MCA principles for businesses of every kind, the basis for BRSR reporting by the top 1,000 companies; criticised as not legally enforceable.
In plain language
NGRBC stands for the National Guidelines on Responsible Business Conduct.
They rest on a simple idea the workbook calls Responsible Business Conduct: businesses perform better when they help revitalise the society from which they draw resources. The guidelines encourage businesses to contribute to broader development goals while staying economically viable.
The guidelines come from the Ministry of Corporate Affairs. They set out nine principles that any business can adopt, whatever its size, sector, ownership or structure. On their own they are guidance, not law, and the workbook notes that they have been criticised for not being legally enforceable.
Their real force comes through reporting. Business Responsibility and Sustainability Reporting (BRSR), a compliance requirement for the top 1,000 companies in India, is based on NGRBC. And because NGRBC is dovetailed with the UN Guiding Principles on Business and Human Rights, BRSR disclosures are globally relevant.
For a Social Impact Assessor, NGRBC is part of the working toolkit.
How it works
How the guidelines evolved (Chapter 6, 6.2.1). In 2011 the Ministry of Corporate Affairs issued the National Voluntary Guidelines (NVGs) on the Social, Environmental and Economic Responsibilities of Business. They were revised in 2015 to align with international standards and the SDGs. The guidelines contain principles, each with core elements that make it operational.
The nine principles (Table 6.2). Businesses should:
| # | Principle |
|---|---|
| 1 | Conduct and govern themselves with integrity, ethically, transparently and accountably |
| 2 | Provide goods and services in a manner that is sustainable and safe |
| 3 | Respect and promote the well-being of all employees, including those in their value chains |
| 4 | Respect the interests of, and be responsive to, all stakeholders |
| 5 | Respect and promote human rights |
| 6 | Respect, and make efforts to protect and restore, the environment |
| 7 | Be responsible and transparent when influencing public and regulatory policy |
| 8 | Promote inclusive growth and equitable development |
| 9 | Engage with and provide value to consumers responsibly |
Why they exist. The workbook says forming them was a step by the government to meet India's international obligations under several treaty bodies. Companies are expected to recognise and prioritise the core elements and build them into business strategy.
Where an assessor uses them (Chapter 5).
- Competence: knowledge of management system standards and guidance documents, e.g. the SAS, ISO 26000, NGRBC and BRSR (5.3.4).
- Scope of work: align the objectives and goals being assessed with NITI Aayog's SDG India Index and NGRBC guidance (5.3.6).
A worked example
An illustrative company; figures are made up.
Kaveri Textiles Ltd, a listed Tiruppur garment exporter, is among India's top 1,000 companies, so it must file a BRSR. That report is built on NGRBC, so the company maps its activities to the nine principles:
| Activity | Spend | Principle |
|---|---|---|
| Wastewater recycling plant at its dyeing unit | ₹4.5 crore | 6 — protect and restore the environment |
| Minimum-wage and safety audits of 60 supplier units | ₹35 lakh | 3 — well-being of employees in the value chain |
| Skilling programme for 800 women from nearby villages | ₹1.2 crore | 8 — inclusive growth and equitable development |
| Board-approved anti-bribery policy | ₹10 lakh | 1 — integrity and accountability |
Total spend mapped: 4.5 crore + 35 lakh + 1.2 crore + 10 lakh = ₹6.15 crore.
A Social Impact Assessor reviewing the skilling programme would, as Chapter 5 requires, check whether its goals align with NGRBC guidance and the SDG India Index.
What NGRBC cannot do is compel Kaveri to run the recycling plant. The guidelines themselves carry no legal penalty. That is the non-enforceability criticism in Chapter 6. The pressure comes through the BRSR disclosure requirement built on them.
Why NISM asks about it
Chapter 5 (10% weightage) introduces NGRBC as the basis for BRSR for the top 1,000 companies, notes its link to the UN Guiding Principles, and lists it in the assessor's required knowledge and scope of work. Chapter 6 (10%) gives its history from the 2011 NVGs, the nine principles in Table 6.2 and the criticism that it is not legally enforceable. Expect "which of these is not an NGRBC principle?", "BRSR applies to the top ___ companies" (1,000), and "which ministry issued the guidelines?" (Corporate Affairs).
Common exam traps
- Nine principles, not ten and not seventeen. Seventeen is the number of SDGs.
- Ministry of Corporate Affairs, not SEBI and not NITI Aayog.
- Top 1,000 companies must file BRSR, and it is based on NGRBC.
- Guidance, not law. Chapter 6 records criticism that NGRBC is not legally enforceable.
- The dates don't line up in the workbook. Chapter 5 calls them the NGRBC, 2018. Chapter 6 tells the story only as the NVGs of 2011, revised in 2015, and never mentions 2018. Learn both: NVGs 2011, revised 2015; NGRBC dated 2018.
- Workbook typo. Chapter 6 writes "NGBRC" in Table 6.2's title and the text after it. It is the same thing as NGRBC.
- Linked to the UN Guiding Principles on Business and Human Rights (UNGP), which is why BRSR disclosures are called globally relevant. Not the UN Global Compact, which is a separate framework in 6.2.2.
Check yourself
1.Under the NGRBC, a business that is concerned about the working conditions of workers employed by its suppliers is applying which principle?
- a)Principle 2 — goods and services that are sustainable and safe
- b)Principle 3 — well-being of all employees, including those in their value chains
- c)Principle 4 — responsiveness to all stakeholders
- d)Principle 8 — inclusive growth and equitable development
Show the answer
Answer: (b) Principle 3 — well-being of all employees, including those in their value chains
Principle 3 asks businesses to respect and promote the well-being of all employees, including those in their value chains. Supplier workers are part of the value chain.
Principle 4 is tempting because suppliers are stakeholders, but the specific principle on workers is Principle 3. Principle 2 is about the goods and services themselves, and Principle 8 is about inclusive growth.
2.The ten principles of the UN Global Compact cover which four areas?
- a)Human rights, labour, environment and anti-corruption
- b)Governance, taxation, environment and consumer protection
- c)Human rights, education, health and gender
- d)Labour, finance, technology and anti-corruption
Show the answer
Answer: (a) Human rights, labour, environment and anti-corruption
The UNGC's ten principles fall under human rights (1–2), labour (3–6), environment (7–9) and anti-corruption (10).
The other options mix in areas such as taxation, education or finance that are not UNGC principle areas. Consumer responsibility appears in the Indian NGRBC (Principle 9), not in UNGC.
Where this is taught
Free preparation for NISM Series XXIIIRelated terms
- Impact Management ProjectThe framework, used by the GIIN's IRIS+ system, that describes impact in five dimensions — What, Who, How Much, Contribution and Risk — with defined data categories for each.
- Social Impact Assessment StandardsICAI's sixteen thematic standards, SAS 100 to SAS 1600, mirroring the SSE's eligible activities; compliance is mandatory for social impact assessments of social enterprises listed on an SSE.
- Social Impact AssessorAn individual registered with an SRO (under ICAI or another SEBI-specified agency) who has passed the NISM certification and holds a valid certificate; performs independent verification of impact reports.