The Social Compact: Informal Workers' Rights in India

Summary:

In this episode of The Corporate Director Podcast, Sonvi Khanna, Associate Director of the Social Compact at Dasra, and Meher Pudumjee, Chairperson of Thermax Limited discuss the “S” in ESG and their work championing informal workers’ rights in India.

In this episode:

1. The Social Compact: Khanna and Pudumjee discuss the origin of the Social Compact and how Thermax and Dasra became involved.
2. Championing Informal Workers’ Rights: Khanna walks through the biggest challenges facing informal workers in India and what they are doing to help.
3. Advice for Corporate Leaders: Pudumjee gives advice to corporate leaders on how to start thinking and acting more deliberately on the “S” in ESG.

The Social Compact

Khanna provides an overview of Dasra, the organization that founded the Social Compact: “Dasra is a philanthropy advisory organization that engages with the private sector via their philanthropy. Post-pandemic, we leveraged those relationships and advisory capabilities to start advising businesses on how to play a greater role in creating better development outcomes for their workers engaged in farm work.”

Pudumjee sheds light on how her organization, Thermax, became involved: “We knew Dasra was a reputable NGO involved in strategic giving. When COVID hit India in March 2020 and we had a sudden lockdown, we saw thousands of migrant laborers walking to their homes with no money or food. Some died along the way carrying everything they possessed. Many of us were disappointed and deeply saddened when we saw this on the TV.”

She goes on, “It really made us question why this was still happening in a country like ours in the 21st century. Something was clearly wrong.” That was when Thermax contacted Dasra: “We knew so little about migrant workers. We reached out to Dasra to help us understand why this was happening and why the situation was so dire.”

Championing Informal Workers’ Rights

From there, Thermax became involved with the Social Compact. Khanna provides an overview of informal workers’ positions in the Indian economy: “As an informal worker, you could be on of 200 million Indians who are engaged for 8-12 hours of work for 2-4 dollars a day for seven days a week and still not have any sort of contract around this. When Meher and a few other industry leaders kickstarted the Social Compact, we had two challenges: the visibility of these workers, and helping the top companies take on accountability for a certain threshold of basic assurance of wellbeing for these workers.”

She goes on, “The Social Compact was envisaged as an industry and NGO co-solution and platform. Until the pandemic, workers organizations and companies saw themselves at odds; at two ends of the spectrum. But unless we come together, we will never solve this problem.”

Khanna reiterated that this this was going to require a massive shift in aspiration, mindset, policies and procedures in industry. She explains, “We needed to answer some foundational questions. What constitutes migrant work? What constitutes better conditions? We were able to carve out a basic and human-centric framework that was applicable across industries, and which really focuses on basic needs of human beings.”

Advice for Corporate Leaders

Pudumjee talks through how these mindset shifts in how organizations think about informal workers needs to start at the top, with the board. She breaks her advice down into three key pieces:

1. Business has to be based on growth and profits, but if a business is based on only these things, it will die, for it no longer has a reason for existence. There is way more to business than top and bottom line.
2. In the long run, no business can survive in a society that fails. If we do not emphasize society, we have no system to operate in.
3. A responsible business is truly successful in the long-run.

Also in this episode…

Both guests give their predictions for how they believe boards will adapt in the next decade. Pudumjee states, “Ten years ago, boards looked at purely shareholders as the only stakeholder. Today, the board is looking at the environment and employees. Ten years from now, probably all stakeholders, including the community and society writ large, will become even more important.”

Khanna adds, “I think we will see more conversation globally on inclusion overall. If boards play a great role in setting business aspirations and upholding those, the inclusion of diverse voices that constitute the business will become integral.”

Resources from this episode:

• The Social Compact