Transparency is the first and a crucial step for accountability. In 2005, India enacted the Right to Information Act67 (RTI Act) with the premise that an “informed citizen is better equipped to keep necessary vigil on the instruments of governance and make the government more accountable to the governed.” In the context of corporate transparency and accountability the same premise applies to companies as well as financial institutions. Customers who deposit their money in a bank can act to strengthen the bank’s governance and accountability by insisting on transparency in its policies. Communities whose lives and livelihoods are impacted by economic activities will be able to defend their rights and entitlements if they are fully informed about both the environment and social risks as well as opportunities in a fair and transparent manner.
In India, necessary actions by the Ministry of Corporate Affairs, SEBI and RBI have played a significant role in strengthening corporate nonfinancial disclosures on ESG issues. Voluntary initiatives such as the Global Reporting Initiative have also supported corporate reporting on sustainability. Stakeholder engagement and grievance mechanisms are crucial elements that help translate transparency into accountability, relating to Pillar 3 of the UNGPs which focuses on ‘Access to Remedy’.
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