1. SEBI’s sustainability reporting norms mandate ESG overview
Disclosures must on gender diversity, cybersecurity
The Securities and Exchange Board of India (SEBI) on Monday issued a circular notifying new disclosure norms on sustainability related reporting for the top 1,000 listed companies by market cap by FY23.
Such a reporting will now be under a new business responsibility and sustainability report (BRSR) format. The decision was first made at SEBI’s board meeting on March 25.
“The BRSR is a notable departure from the existing business responsibility report and a significant step towards bringing sustainability reporting at par with financial reporting,” SEBI said in the circular.
Now, the companies will need to provide an overview of their material environmental, social, governance risks and opportunities and approach to mitigate or adapt to the risks along with financial implications.
The social-related disclosures will cover the workforce, value chain, communities and consumers.
Companies will have to disclose the gender and social diversity of employees, including measures for differently-abled employees and workers, occupational health and safety and trainings. On the community front, companies need to make disclosures on social impact assessments (SIA), rehabilitation and resettlement and corporate social responsibility. For consumers, they have to make disclosures on product labelling, product recall and complaints in respect of data privacy and cybersecurity.
Business Responsibility and Sustainability Report
- SEBI, in 2012, mandated the top 100 listed entities by market capitalisation to file Business Responsibility Reports (BRR) as per the disclosure requirement emanating from the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ (NVGs).
- In 2019, the Ministry of Corporate Affairs revised NVGs and formulated the National Guidelines on Responsible Business Conduct (NGRBC).
- In December 2019, SEBI extended the BRR requirement to the top 1000 listed entities by market capitalisation, from the financial year 2019-20.
- Listed Entity: A company whose shares are traded on an official stock exchange.
- Market Capitalization: It refers to how much a company is worth as determined by the stock market. It is defined as the total market value of all outstanding shares.
- To calculate a company’s market cap, multiply the number of outstanding shares by the current market value of one share.
- About Business Responsibility and Sustainability Report (BRSR):
- BRSR, which is from an Environmental, Social and Governance (“ESG”) perspective, is intended to enable businesses to engage more meaningfully with their stakeholders.
- It will encourage businesses to go beyond regulatory financial compliance and report on their social and environmental impacts.
- The BRSR will be applicable to the top 1000 listed entities (by market capitalization), for reporting on a voluntary basis for FY 2021 – 22 and on a mandatory basis from FY 2022 – 23.
- Sustainability Reporting:
- It is the disclosure and communication of environmental, social, and governance (ESG) goals—as well as a company’s progress towards them.
- The benefits of sustainability reporting include improved corporate reputation, building consumer confidence, increased innovation, and even improvement of risk management.
- Environmental, Social, and Governance Goals:
- Environmental, social, and governance (ESG) goals are a set of standards for a company’s operations that force companies to follow better governance, ethical practices, environment-friendly measures and social responsibility.
- Environmental criteria consider how a company performs as a steward of nature.
- Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.
- Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
2. ‘Slow vaccination pace puts India at risk of more waves’
Disruption due to second COVID wave can hit growth: Fitch
Fitch Ratings has warned that India’s slow pace of vaccination means that the country could remain vulnerable to further waves of COVID-19 even once the current surge subsides. Just 9.4% of the population had received at least one vaccine dose as of May 5, it pointed out.
Last month, the firm had said that the second pandemic wave in the country could ‘delay’ but not ‘derail’ the economic recovery. However, it has now expressed concerns about the adverse implications of a longer disruption. “We expect the shock to economic activity from the latest wave of the pandemic in India to be less severe than in 2020, even though caseloads and fatalities are much higher. The authorities are implementing lockdowns more narrowly, and companies and individuals have adjusted behaviour in ways that cushion the effects,” Fitch said in a note on Monday.
“Nonetheless, indicators show activity dropped in April-May, which is likely to delay the country’s recovery, and the number of newly recorded cases remains extremely high. There is a risk that disruption could persist longer and spread further than our baseline case assumes, particularly if lockdowns are introduced in more regions, or nationwide,” it added.
The latest COVID-19 infections’ wave would add to risks for financial institutions by sapping near-term momentum from the economic recovery and, the central bank’s relief measures announced last Wednesday would postpone the recognition of risky assets, the firm said. It had forecast 12.8% GDP growth in FY22.
3. Iran confirms that it is in talks with Saudi Arabia
They cut ties in 2016 after Iranian protesters attacked Saudi missions following execution of a Shia cleric
Iran’s Foreign Ministry on Monday for the first time confirmed the Islamic republic is holding talks with regional rival Saudi Arabia, but said it is “too soon” to discuss the results.
Media reports, later confirmed by diplomatic and Iraqi government sources, revealed that Iranian and Saudi officials met in Baghdad in April, their first high-level meeting since Riyadh cut diplomatic ties with Tehran in 2016.
“The purpose of the talks was both bilateral and regional,” Iran’s Foreign Ministry spokesman Saeed Khatibzadeh told reporters.
“But let us wait and see the results of these talks… it might still be too soon to talk about the details of the negotiations,” he added, noting that Iran has “always welcomed such talks at any level and in any shape”.
The neighbouring countries cut ties in 2016 after Iranian protestors attacked Saudi diplomatic missions following the kingdom’s execution of a revered Shiite cleric.
The talks in Baghdad, facilitated by Iraqi PM Mustafa al-Kadhemi, remained secret until the Financial Times reported that a first meeting was held on April 9.
An Iraqi government official confirmed the talks to AFP, while a Western diplomat said he had been “briefed in advance” about the effort to “broker a better relationship and decrease tensions”.
Iran on April 29 welcomed a “change of tone” from the Saudi Crown Prince Mohammad bin Salman towards it after he called for a “good and special relationship” with Tehran.
The regional rivals have backed opposite sides of several regional conflicts, from Syria to Yemen, where a Saudi-led coalition is fighting the Houthi rebels.
Iran backs the Houthis, who are battling the Saudi-led military that intervened in Yemen’s war in 2015.
“De-escalation and (establishing) ties between two great Islamic countries in the region is to the benefit of both nations,” Mr. Khatibzadeh said on Monday.
The Saudi Backing to Syrian Rebels working to overthrow the dictator Assad. The Iran, Russian alliance has been instrumental in helping Assad’s forces to continue their reign. Russia has blocked UN Security Council sanctions against Syria.
The Western allies to want to intervene against the Dictator but Russia has continually blocked this. The Syrian region is Sunni dominant but with a Shia leadership. Hence Saudi is backing the Sunni rebels against the Shia forces of Assad which are supported by Iran.
This has lead to a proxy war between the two.
Yemen is a muslim dominant state with Shia militia “Houthis” backed by the Iranian state and Yemen leadership backed by Saudi Arabia. Houthis had captured the Yemen capital and now had their parallel government running the Country. This had been a major embarrassment for Saudi Arabia.
This country has equal population of Shia and Sunnis. Here too the Shia dominated militia Hizbollah has managed to impose its leader as President of State.
It is Shia majority country now with good ties with Iran. The Islamic state is engaged in war with Shia rebels [supported by Iran].
Saudi Arabia closed diplomatic relations with Iran after its embassy in Iran was attacked. This was due to executions of Shia clerics by Saudi Arabia on accusations of spying for Iran.
The main source of income and power for Saudi Arabia was the export of oil. But with prices at all time low it can’t sustain its proxy war and funding of rebels engaged in conflicts. Already the Saudi favoring countries like Eqypt and Lebanon have now looked towards Iran as their free shipment of oil was cancelled by Saudi.
It needs oil to be above $80 per barrel for breaking even. Hence it agreed with Iran to cut production to increase prices.
Iran meanwhile obtained a greater bargain by getting the OPEC to increase Iran’s quota so that it could recover from the sanctions imposed by US.
4. Pakistan government to set new rules to meet FATF requirements
Specialised agencies to take over money laundering cases
Pakistan, keen to exit from the grey list of the FATF, is set to introduce new rules relating to anti-money laundering cases and change the prosecution process to meet its remaining tough conditions, a media report said on Monday.
Pakistan was put on the grey list by the Paris-based Financial Action Task Force (FATF), the global watchdog for money laundering and terror financing in June 2018 and the country has been struggling to come out of it.
The Dawn newspaper reported that the changes being made also include the transfer of investigations and prosecution of anti-money laundering (AML) cases from police, provincial anti-corruption establishments (ACEs) and other similar agencies to specialised agencies.
This is part of two sets of rules, including the AML (Forfeited Properties Management) Rules 2021 and the AML (Referral) Rules 2021 under the “National Policy Statement on Follow the Money” approved by the federal Cabinet meeting a few days ago, the report said.
These rules and related notifications for certain changes in the existing schedule of Anti-Money Laundering Act 2010 (AMLA) would come into force immediately, to be followed by the appointment of administrators and special public prosecutors for implementation.
Based on these measures, the FATF would conclude if Pakistan has complied with three outstanding benchmarks, out of 27, that blocked its exit from the grey list in February this year.
5. Editorial-1: Decoding inequality in a digital world
Technological changes in education and health are worsening inequities
Virginia Eubanks’ widely acclaimed book, Automating Inequality, alerted us to the ways that automated decision-making tools exacerbated inequalities, especially by raising the barrier for people to receive services they are entitled to. The novel coronavirus pandemic has accelerated the use of digital technologies in India, even for essential services such as health and education, where access to them might be poor.
Economic inequality has increased: people whose jobs and salaries are protected, face no economic fallout. The super-rich have even become richer (the net worth of Adani has increased. The bulk of the Indian population, however, is suffering a huge economic setback. Several surveys conducted over the past 12 months suggest widespread job losses and income shocks among those who did not lose jobs.
Worse than the immediate economic setback is that well-recognised channels of economic and social mobility — education and health — are getting rejigged in ways that make access more inequitable in an already unequal society.
The switch in learning
For a few, the switch to online education has been seamless. Notwithstanding the Education Minister’s statement in Parliament that no one had been deprived of education because of online learning, at least two young students took their own lives because they could not cope — a college student studying in Delhi and a 16-year-old in Goa whose family could not afford to repair the phone he used.
According to National Sample Survey data from 2017, only 6% rural households and 25% urban households have a computer. Access to Internet facilities is not universal either: 17% in rural areas and 42% in urban areas. Sure, smartphones with data will have improved access over the past four years, yet a significant number of the most vulnerable are struggling. Surveys by the National Council of Educational Research and Training (NCERT), the Azim Premji Foundation, ASER and Oxfam suggest that between 27% and 60% could not access online classes for a range of reasons: lack of devices, shared devices, inability to buy “data packs”, etc. Further, lack of stable connectivity jeopardises their evaluations (imagine the Internet going off for two minutes during a timed exam).
Besides this, many lack a learning environment at home: a quiet space to study is a luxury for many. For instance, 25% Indians lived in single-room dwellings in 2017-19. If between two and four people share a single room, how can a child study? For girls, there is the additional expectation that they will contribute to domestic chores if they are at home.
Peer learning has also suffered. When students who did not study in English-medium schools come to colleges where English is the medium of instruction, they struggled. Yet, surrounded by English speakers, however falteringly, many managed to pick up the language. Such students have been robbed of this opportunity due to online education.
While we have kept a semblance of uninterrupted education, the fact is that the privileged are getting ahead not necessarily because they are smarter, but because of the privileges they enjoy.
Need a bed? Have an app
Something similar is happening with health care. India’s abysmally low public spending on health (barely 1% of GDP) bears repetition. Partly as a result, the share of ‘out of pocket’ (OOP) health expenditure (of total health spending) in India was over 60% in 2018. Even in a highly privatised health system such as the United States, OOP was merely 10%. Moreover, the private health sector in India is poorly regulated in practice. Both put the poor at a disadvantage in accessing good health care.
Right now, the focus is on the shortage of essentials: drugs, hospital beds, oxygen, vaccines. In several instances, developing an app is being seen as a solution for allocation of various health services. It is assumed that these will work because of people’s experience with platforms such as Zomato/Swiggy and Uber/Ola. We forget that those work reasonably well because restaurants/food and taxis/drivers are available for these platforms to allocate effectively.
Patients are being charged whatever hospitals like, and a black market has developed for scarce services (such as oxygen). The sensible response to such corrupt practices would be to clamp down on the handful who indulge in them. Instead, those in power are looking for digital options such as making Aadhaar mandatory.
Digital “solutions” create additional bureaucracy for all sick persons in search of these services without disciplining the culprits. Along with paper work, patients will have to navigate digi-work. Platform- and app-based solutions can exclude the poor entirely, or squeeze their access to scarce health services further.
In other spheres (e.g., vaccination) too, digital technologies are creating extra hurdles. The use of CoWIN to book a slot makes it that much harder for those without phones, computers and the Internet. There are reports of techies hogging slots, because they know how to “work” the app. The website is only available in English.
It is also alarming if the pandemic is being used to create an infrastructure for future exploitation of people’s data. The digital health ID project is being pushed during the pandemic when its merits cannot be adequately debated. Electronic and interoperable health records are the purported benefits. For patients, interoperability (i.e., you do not have to lug your x-rays, past medication and investigations) can be achieved by decentralising digital storage (say, on smart cards) as France and Taiwan have done. Yet, the Indian government is intent on creating a centralised database. Given that we lack a data privacy law in India, it is very likely that our health records will end up with private entities without our consent, even weaponised against us (e.g., private insurance companies may use it to deny poor people an insurance policy or charge a higher premium). There are worries that the government is using the vaccination drive to populate the digital health ID database (for instance, when people use Aadhaar to register on CoWIN). No one is asking these questions because everyone is desperate to get vaccinated. The government is taking advantage of this desperation.
The point is simple: unless health expenditure on basic health services (ward staff, nurses, doctors, laboratory technicians, medicines, beds, oxygen, ventilators) is increased, apps such as Aarogya Setu, Aadhaar and digital health IDs can improve little. Unless laws against medical malpractices are enforced strictly, digital solutions will obfuscate and distract us from the real problem. We need political, not technocratic, solutions.
More than 10 years ago, we failed to heed warnings (that have subsequently come true) about exclusion from welfare due to Aadhaar. Today, there is greater understanding that the harms from Aadhaar and its cousins fall disproportionately on the vulnerable. Hopefully, the pandemic will teach us to be more discerning about which digital technologies we embrace.
6. Editorial-2: A national health service in India
It is time to revive a plan that is modelled on the British National Health Service
“When we fall sick, we die.” The villager who said that to a student of mine may have got unpleasantly close to the truth about the condition of healthcare in India. The current surge in COVID-19 infections has exposed problems amounting to near-chaos throughout Indian healthcare, even if the pandemic has also brought to light Herculean attempts by medical staff, patients’ families, and governments to try and cope with what has been called a tsunami, one which is rapidly getting worse.
While those involved in the clinical response are clearly doing their often-desperate best — care staff are at high risk of contracting COVID-19 — the Central and State governments are now coordinating measures within and across their respective jurisdictions. For example, the railways are running special trains carrying oxygen supplies, and the military is also involved in supply chains. The Karnataka government has ordered private hospitals above a certain size to reserve 75% of their beds for COVID-19 patients who will be paid for under a public scheme. Other States have taken similar measures. The Supreme Court has, suo motu, called for a national plan to deliver oxygen and vaccines.
The responses to the worsening COVID-19 crisis are, nevertheless, not free of tensions. Some private healthcare providers have objected to public authorities’ orders on widened patient access, and the Supreme Court’s call for a national supply plan has been publicly criticised in the political sphere. Some of the problems have occurred on previous occasions. At least one private hospital chain has lost a court action over its failure to treat a government-specified quota of poorer patients; the quota was a condition of help with land allocation to build a hospital.
System under strain
Yet the current crisis may well redirect national attention to what is only barely recognisable as a system of healthcare. India’s fragmented, often corrupt, urban-centred, elite-focused and wretchedly underfunded agglomeration of clinics, hospitals, and variably functional primary health centres can look like no more than an accidental collection of institutions, staff, and services. India’s public spending on health is set to double in the 2021-22 financial year, but that is from a figure that has long been only a little over 1% of GDP. In certain rural areas, the doctor-population ratio is over 1:40,000.
India’s healthcare providers, however, have the task of serving 1.4 billion people, for the overwhelming majority of whom sickness or serious injury of any kind is a matter of lifelong dread. Medical expenses constitute the major reason for personal debt in India, whether the causes are episodic afflictions or, for example, those caused by environmental conditions which none can escape, such as air pollution (which the journal Lancet Planetary Health says this accounted for 1.7 million deaths in India in 2019; the annual business cost of air pollution is currently estimated at $95 billion, which is about 3% of India’s GDP).
An idea whose time has come
In effect, COVID-19 may bring about serious consideration of an Indian national health service. National public discussion of that would be almost unprecedented in India, but the idea itself is not new. In 1946, the civil servant Sir Joseph Bhore submitted to the then government a detailed proposal for a national health service broadly modelled on the British National Health Service or NHS, which was on the way towards legislative approval in Britain. Bhore went further by recommending that preventive and curative medicine be integrated at all levels. The British plan had been drafted in the 1930s, as problems worsened in healthcare services. The fact of the Second World War, in the darkest hours of which a plan was prepared to transform Britain into a post-war social democracy with a comprehensive welfare state and a universal free public health service supporting a mixed economy, may therefore have been catalytic rather than decisive in the creation of the NHS.
The result is a mighty achievement in public policy, politics, and the provision of top-class universal healthcare, including training, research, and changing engagement with the public as society changes. The service is funded entirely from general taxation. The budget includes payment to general practitioners, most of whom remain private providers but are paid by the state for treating NHS patients. Items listed in general practitioners’ prescriptions incur no charges in the devolved regions of Scotland, Wales, and Northern Ireland, and in practice only a proportion of patients in England have to pay for prescription items. All hospital treatment and medicines are free, as are outpatient and follow-up appointments. The British public share the costs through their taxes, and almost without exception receive treatment solely according to their clinical needs. With about 1.1 million staff, the NHS is the largest employer in the U.K. Its current budget is about 7.6% of GDP, but despite its size and scale, it provides highly localised access to care.
Problems in the NHS
Of course, problems have arisen. Among them are largely unintended inequalities in the time and attention given to patients of different social classes (this discovery resulted in substantial changes), huge and frequent reorganisations imposed by Central government, and often ideologically driven underfunding. Nevertheless, many senior hospital consultants who were opposed to a public health service when the NHS started have declared unreserved support for it in at least one national conference resolution. An authority on the NHS has said that it is the most loved and trusted institution in the country and is held in even higher regard than the monarchy.
India now faces a very serious health crisis, possibly the worst since Independence. By all accounts, several areas of the Indian healthcare provision are under severe strain. The precise structure envisaged by Bhore may need some adaptation for today’s society and conditions but dealing effectively with the pandemic may itself require the urgent creation of an Indian National Health Service.