A large infrastructure company, Vikas Constructions Ltd., is developing an industrial corridor project in a semi-rural area. The project involves…

CA Final · Advanced Auditing, Assurance and Professional Ethics · RTP · November 2026
A large infrastructure company, Vikas Constructions Ltd., is developing an industrial corridor project in a semi-rural area. The project involves land acquisition, construction activities, and possible relocation of a small local settlement. The company aims to align its actions with Principle 8 – Promote Inclusive Growth and Equitable Development. During the ESG compliance and CSR strategy meeting, the sustainability director proposes several actions to align the project with Principle 8. However, the internal audit team observes that one of the proposed actions is not consistent with the core elements of this principle. Which of the following actions is not aligned with Principle 8?
(A) (a) The entity should have systems in place to identify and address impacts of its activities on the social, cultural, and economic aspects of the people, including issues like land acquisition and construction activities for new facilities.
(B) (b) The entity should review, measure, and track the adverse impacts of its activities on society and environment and make action plans to mitigate them adequately.
(C) (c) The entity should ensure that business decisions primarily focus on maximising economic efficiency even if it results in business induced displacement or relocation of communities, without requiring participative or informed negotiations.
(D) (d) The entity should make efforts to bring up creative products, technologies, and business concerns that help marginalized communities to have well-being and a better quality of life.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

Principle 8 of the National Guidelines on Responsible Business Conduct (NGRBC) focuses on promoting inclusive growth and equitable development. This principle emphasizes that businesses should respect and promote the well-being of all stakeholders, especially those who are marginalized or vulnerable, and contribute to their development. Actions aligned with Principle 8 include: Having systems to identify and address impacts on social, cultural, and economic aspects of people, including land acquisition and construction. Reviewing, measuring, and tracking adverse impacts on society and the environment and making action plans to mitigate them. Making efforts to bring up creative products, technologies, and business concerns that help marginalized communities to have well-being and a better quality of life. An action that is not aligned with Principle 8 is ensuring that business decisions primarily focus on maximizing economic efficiency even if it results in business-induced displacement or relocation of communities, without requiring participative or informed negotiations. This directly contradicts the spirit of inclusive growth and equitable development, which requires businesses to prioritize the well-being of affected communities and engage in fair processes. Therefore, the action that is not aligned with Principle 8 is: The entity should ensure that business decisions primarily focus on maximising economic efficiency even if it results in business induced displacement or relocation of communities, without requiring participative or informed negotiations.

Topics: Emerging Areas: Sustainable Development Goals (SDG) & Environment, Social and Governance (ESG) Assurance

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