Social Compact: Co-creating Socially Responsible Businesses the Indian Way

 From Vikalpa: The Journal for Decision Makers

Like never before the COVID-19 pandemic highlighted the plight of India's informal and migrant workers. This led to the genesis of the Social Compact. The Social Compact is a unique indigenously designed voluntary initiative to stimulate positive social change in Indian industry. It is a multi-stakeholder initiative that brings together Indian industry, civil society and academics to drive socially sustainable practices across the production value chains.  The colloquium presents the necessity of a ‘human-centric’ approach to business and builds a case for why fair and equitable treatment of informal workers aids a business. Twelve articles from experts representing the industry, civil society, developmental organisations and academia explain the inception of the Social Compact and share the journey of various stakeholders from diverse sectors.

In India, the environmental, social, and governance (ESG) landscape is slowly evolving, with many companies now adopting ESG norms. While the focus of the ESG integration practices has mostly been on the ‘E’ and ‘G’, the COVID-19 pandemic brought into focus the ‘S’. This colloquium presents a facet of this changing narrative focusing on the ‘S’ parameter of ESG. The Social Compact is a unique indigenously designed voluntary initiative to stimulate a positive change in Indian industry. It was conceptualized because of the migrant crisis during the pandemic, which brought the structural vulnerabilities and uncertainties of informal workers’ lives to public attention.

In their article, Jain, Puri, and Misra draw a vivid picture of the challenges faced by migrant women workers, illustrated through a variety of experiences that include transwomen facing discrimination in finding employment. The next article by Misra and Shah further highlights the inequalities faced by the vulnerable workers employed in the construction sector. The authors discuss the critical breakpoints across various stakeholder groups and how these can be transformed into opportunities to ensure inclusion. However, there are many ambiguities in labour registration due to the recent labour law reforms. In the article, ‘Transitioning in Vacuum’, the authors Patel, Joshi, Khuman, Premila, Anusha, and Anahita outline the changes taking place in the labour registration regime. They also highlight the challenges faced at the ground level representing the experience of four organizations working in Gujarat, Chhattisgarh, Maharashtra, and Madhya Pradesh.

Next, Bhargava and Forbes draw on their vast industry experience to clear the misconception that ensuring the well-being of informal workers will make a business uncompetitive or unviable. Supported by data and illustrations from practice, they make a compelling argument to focus on worker well-being practices in the principal company and the supply chain. The case for fair and equitable treatment of informal workers gets further support in the article, ‘Nine Reasons Why Businesses Should Invest in the Rule of Law’. The authors James, Gandhi, and Sethi state that businesses are often averse to taking action or investing in the rule of law for various reasons. However, they outline specific benefits to businesses from a society with greater adherence to the rule of law. Through all of these articles, the need for an initiative like Social Compact is firmly established.

Khanna and Shah explain the journey of the Social Compact and how it brings together a variety of stakeholders, from NGOs to established business houses to young emerging businesses across diverse sectors. The authors state that the stakeholders worked together to identify gaps and co-create solutions that can be implemented. Each company can carve out their individual journey and make changes in key gap areas. Following this, Varma and Bharadkar, in their article, share their field experiences from visits and interactions at sites and locations identified for implementing Social Compact. The assessment generated several data points about the situation on the ground that helped define the outcomes. In the article, ‘Industry-Based Workers Facilitation Centres’, the authors explain the need for such centres, their role, and the challenges an industry-based WFC may face. The authors emphasize the collaborative role the stakeholders need to play for a WFC.

This is illustrated in the next article by Rati Forbes, where the authors share the experiences of a WFC running in partnership with an NGO and two prominent business houses. The author also shares the Forbes Marshall experience of Social Compact. After this, Pudumjee, synthesizing from the Social Compact journey at Thermax Ltd, argues about the importance of a collective buy-in by the management and a unit-level autonomy to decide priorities as a critical component to succeed in this endeavour. Further, Mehra, in her article, extends this experience by sharing the realities of informally engaged workers in the construction sector. The author lists out the actionable milestones being adopted by GPL for ensuring an equitable future for workers. The colloquium ends with a comprehensive article that brings together the perspectives of young business leaders (Nag, Tejani, Tejani, Sharma, and Jain) on social sustainability in businesses and the need for embracing a mission like Social Compact today.

Click here to read the complete article