In its draft report for the Business Responsibility and Sustainability format, 2020 (BRSR), the Securities and Exchange Board of India (SEBI) states that, ‘the philosophy of responsible business is based on the principle of business being accountable to all its stakeholders towards global developments which are increasingly seeking firms to be responsible and sustainable towards their environment and society’. The new reporting aimed at bringing greater transparency through disclosures on Environmental, Social and Governance (ESG), is huge step in the right direction by the regulator.
Amongst the various ESG disclosures, the BRSR has sought various levels on gender disclosures that are essential for the businesses to report – including female representation in management as well as employee level. While the disclosures aimed at gender front are definitely better than before, the use of the term ‘workmen’ in the BRSR format itself is thought provoking.
According to the World Bank Databank, less than one-quarter (20.3%) of women aged 15 and older in India, participate in the labor force as of 2020 (compared to 76.0% of men). This low rate of participation in India can be attributed to various factors including, to restrictive cultural norms regarding women’s work, the gender wage gap, an increase in time spent for women continuing their education, and a lack of safety policies and flexible work offerings. Given this data, it is important to emphasize the importance of changing the conditioning at the policy level and use gender neutral terms. A simple approach could be defined ‘workmen’ as ‘workers’ and make the document itself more inclusive.
The terminology is however a small issue as compared to the actual responsibility the business including financial institutions have towards making their operations more inclusive. A bank policy assessment undertaken by Fair Finance India in 2019, using the Fair Finance Guide International methodology, showed that the assessed banks just scored 10% on the gender indicator. This indicator was only limited to the disclosures by these banks on representation of women in the management position. None of the banks had any policies in the public domain, that mandated businesses to have gender inclusive policies.
Not having policies extending to the entire business supply chains has an adverse impact on the working conditions of women. In a recent case of gender based violence for a women worker in Tamil Nadu, a women worker was murdered after being sexually harassed by her supervisor. The supplier in question, Natchi Apparels, is owned by Eastman Exports Global, who did not take any active action against the perpetrator. This is indicative of the lack of safe work places for women with limited grievance and sexual redressal mechanisms, especially for informal sector workers in India. Both the subsidiary and the parent company question supply to brands like H&M. Though H&M has indicated that it is working with the suppliers and would set up its own internal investigation, the broader question is to develop accountability mechanisms that are beyond Tier 1 suppliers for the brands.
It in these areas, that effective implementation of the BRSR can play important role. The modified format now includes the disclosures of complaints and grievance redressal mechanisms in the businesses. Since the comprehensive format is to be followed by listed companies in the National Stock Exchange (NSE), based on the disclosures, the investors can push the listed businesses to have contractual clauses to ensure safe working spaces for women.
This is here where financial institutions can have a critical role to play. They can link their lending operations to the non-financial ESG disclosures to businesses and promote the adoption of BRR light format on non-listed businesses like Eastman. For instance, there are ground-level reports that Eastman instead of addressing the issue despite complaints by the local trade unions, Eastman took no action and maintained an internal complaints committee focused on repressing rather than exposing serious and ongoing violations. As per the disclosure to Ministry of Corporate Affairs, Eastman has received renewed funding from banks like State Bank of India (SBI), HDFC Bank, The Federal Bank, RBL, to name a few. SBI, HDFC and the Federal Bank are part of the banks policy assessment of Fair Finance India and the 2019 assessment showed that all the three banks scored very low on the gender score – 7%, 7% and 10% respectively. None of the banks had the gender inclusive policies as part of their core lending operations.
A 2018 McKinsey study had estimated that increasing women’s labor force participation by 10 percentage points could add $770 billion to India’s GDP by 2025. The goal is not merely to increase female labor force participation, but to provide opportunities for decent work that will, in turn, contribute to the economic empowerment of women.
The author, Shreya Kaushik. is the Project Coordinator, Responsible Finance at Oxfam India. She has written this blog on behalf of Fair Finance India, a civil society initiative that seeks to strengthen the commitment of financial institutions to environmental, social and governance standards. The views are personal.
World Bank Group, “Labor Force Participation Rate, Female (% of Female Population Ages 15+) (Modeled ILO Estimate) – India,” The World Bank Databank (2020)
 Wheebox, India Skills Report 2020: Reimagining India’s Talent Landscape for a $5T Economy (2020): p. 23, 60
 Business and Human Rights Resource centre, Article- India: AFWA & TTCU publish case summary of murder of Jeyasre Kathiravel & gender-based violence at H&M supplier factory Natchi Apparels
 Index of Charges database of Ministry of Corporate Affairs, Government of India.
 Jonathan Woetzel, Anu Madgavkar, Kevin Sneader, Oliver Tonby, Diaan-Yi Lin, John Lydon, Sha Sha, Mekala Krishnan, Kweilin Ellingrud, and Michael Gubieski, The Power of Parity: Advancing Women’s Equality in Asia Pacific (McKinsey Global Institute, April 23, 2018): p. 99.