The Blind Spot in your BRSR reports: Why Principle 5 Could Be Your Biggest Risk and Opportunity

🧠 “People fix risks faster than policies do.”

That’s a lesson I’ve seen play out again and again in Indian factories—from Tamil Nadu to Gurugram, from automotive to agri.

And it’s exactly why Principle 5 of India’s National Guidelines on Responsible Business Conduct (NGRBC) is no longer optional.

Because Principle 5 isn’t just another ESG checkbox. It’s a mirror.

It reflects how your business treats the people who can’t afford to speak up—but who carry your brand, your risk, and your reputation on their shoulders.

⚠️ What Principle 5 Actually Demands

Let’s stop dressing it up.

Principle 5 asks companies to:

Respect and promote human rights—across their operations and value chains.

That includes:

• Factory workers in contract roles
• Migrant labourers in remote supply tiers
• Women who are often invisible in grievance systems
• Even informal workers supporting your distribution or logistics

This isn’t just about legal compliance—it’s about credibility.

And now, with BRSR reporting mandatory for the top 1000 companies in India, it’s also about visibility. Investors, regulators, and buyers are watching.

🔍 Human Rights Impact Assessments (HRIA): Your Early Warning System

Too many companies still believe:

“We have a policy. We’ve done training. We’re covered.”

But policies don’t find root causes. Only HRIA does.

A well-executed Human Rights Impact Assessment helps you:

• Identify risks before they escalate
• Surface unheard worker voices
• See where grievance systems exist only on paper
• Take corrective action that’s trackable and real

And here’s the kicker: HRIA isn’t a cost. It’s risk insurance.

🔄 Continuous Improvement > One-Time Compliance

Sustainability is not a project—it’s a process.

Principle 5 calls for:

• Ongoing assessments, not one-off audits
• Feedback loops with affected stakeholders
• Building trust with suppliers, not just contracts

Because the real risk isn’t when a grievance is raised. The real risk is when no one tells you until it’s too late.

🎓 Training Your Managers and Suppliers: The Missing Link

Kahneman reminds us that humans rely on fast thinking (System 1) unless they’re trained to slow down and reflect (System 2).

Most managers aren’t trained to spot early signs of human rights violations. Most suppliers aren’t equipped to build safe reporting systems. Most workers don’t feel safe enough to use them.

That’s why we need:

• Training that is practical, not just theoretical
• Engagement that builds ownership, not fear
• Communication that prioritizes trust, not control

📈 Principle 5 in BRSR: From Reporting to Reputation

The BRSR asks tough questions:

• Have you identified human rights risks in your value chain?
• Do your grievance redressal mechanisms work at all levels?
• How do you remediate harm if it occurs?

These aren’t checkboxes. They’re opportunities to lead.

💬 Final Thought

Principle 5 isn’t about being perfect. It’s about being honest—and taking action.

It’s what turns ESG from a report into a relationship. It’s what separates companies that react… from those that lead.

Want to make Principle 5 real in your business—not just words on a report? 👉 Drop me a message or comment below. We’re helping Indian businesses turn human rights risks into real action—and you don’t have to figure it out alone.

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