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Social responsibility and sustainable development

23 Aug 2010
Topics: Social responsibility, ISO 26000, CSR, Sustainable development

Later this year, the International Organization for Standardization (ISO) will publish its first social responsibility standard, ISO 26000. Why is this new standard necessary, what will it accomplish and how will it impact the way the average company will be doing business in the years to come?

The term "social responsibility" was first coined in the 1970s. Since then, on the whole, social responsibility has been understood as a somewhat amorphous idea that organizations ought to take responsibility for their impacts on society and the environment in the course of their activities. But how and indeed why they should take responsibility has not been particularly clear.

However in the intervening decades global thinking has evolved. Concern around environmental degradation, climate change and subsequently the urgent need to adopt sustainable development has crystallized. And successive international fora (Kyoto, Bali, Copenhagen) have called for increasingly radical efforts to halt and reverse global warming and to embed sustainable development measures.

And it is in this regard that social responsibility has now come into a much sharper focus. People have come to understand that no development can be "sustainable" if it leaves irrevocable social or environmental damage in its wake.

As ISO 26000 itself explains: "The objective of social responsibility is to contribute to sustainable development." The reason why organizations should pay attention to social responsibility has become clear and pressing - because it's an inextricable part of sustainable development.

Why an international standard?

On the face of it, it's a fair question - after all there is no shortage of standards under the social responsibility heading.

From the AA1000 Series, via CERES Principles, FTSE4Good Criteria and OECD Guidelines to UN Human Rights Norms (among others), there is almost literally an entire alphabet of codes, frameworks, norms, declarations, guidelines and standards which enshrine how social responsibility activity can be undertaken. Who needs another one?

First, ISO points out that the guidance in ISO 26000 actually draws on best practice developed by existing public and private sector social responsibility initiatives and is consistent with and complements all relevant declarations and conventions, notably that of the International Labour Organization.

ISO also argues that while a wealth of codes exist on individual issues within social responsibility, nothing put in place so far gives a comprehensive view of the subject.

ISO 26000 will be the first to provide accessible guidance for every organization - from the smallest SME to the largest multinational, in developed, developing and transitional countries alike - on how they can address any and all aspects of social responsibility.

Moreover, a key intention of ISO 26000 is that, via the influence and reach of ISO's 162 country members, the standard will provide universal clarity on what social responsibility is. Notes ISO Secretary-General Rob Steele: "Global agreement on social responsibility definitions, principles and core subjects, and guidance on how to integrate social responsibility throughout an organization would simplify things for everyone."

Miles Watkins, director of Sustainable Construction at Aggregate Industries, a leading player in the UK construction industry, agrees: "[ISO 26000] will provide a level playing field of common understanding, common framework and common vocabulary for people in the supply chain to exchange knowledge and ideas on social responsibility."

He adds: "This is a developing field where there is not necessarily a common understanding - so an international standard in that area will make a real step forward for organizations grappling with that agenda."

And universality is also important at the macro level. Globalization means that people's expectations around how organizations and enterprises should act are becoming increasingly homongenized. This puts greater demands on every organization to meet what are fast becoming universally accepted norms of behaviour, conduct, openness and responsibility.

Jorge Cajazeira, the chair of ISO's social responsibility working group explains: "ISO 26000 will provide organizations in both the public and private sectors with a new paradigm for helping them to operate in the socially responsible way that society now expects. It will assist them in achieving long-term economic benefits with minimal social costs and minimal harmful impacts on the environment."

ISO 26000 begins by defining social responsibility as: "the responsibility of an organization for the impacts of its decisions and activities on society and the environment."

Thereafter the standard cites the seven core subjects that are essentially what organizations should be paying attention to in order to be socially responsible. They are: organizational governance; human rights; labour practices; the environment; fair operating practices; consumer issues; and community involvement and development.

So in fact the environment is only one out of seven considerations. Monika Green, committee manager at BSI observes: "This is one area in which I think this standard is going to make a difference. At the moment people still largely think of the environment as their main area of concern. What the standard will bring to the table is awareness beyond that; people will look at their supply chains, the people they employ, their transparency and the way they do business. That's what's going to be powerful about ISO 26000."

Identifying the core issues

Subsequently within each subject, the standard identifies the 'core issues' likely to have economic, environmental and social impacts which should be addressed.

For instance, 'consumer issues' includes fair marketing, protecting consumers' health and safety, and consumer data protection and privacy. 'Fair operating practices' includes anti-corruption and fair competition. 'The environment' comprises: prevention of pollution; sustainable resource use; climate change mitigation and adaptation; and protection of the environment, biodiversity and restoration of natural habitats.

The standard goes on to provide guidance on each issue, including actions that the organization can take and expectations on the way the organization should behave. It also discusses how to identify and engage with stakeholders and finally how to communicate commitments and performance related to social responsibility. Organizations that actively use ISO 26000 are encouraged to make a declaration that they've done so.

Lastly, it's worth pointing out what ISO 26000 doesn't do. ISO makes it clear that the new standard is for guidance only; it does not form the basis of a certification scheme and it isn't a management system standard.

Steele comments: "Our aim is to encourage voluntary commitment to social responsibility - today and in the future. Our focus now is to complete the process, publish the standard and ensure there is awareness amongst ISO membership and customers to encourage widespread uptake of the document."

Why should organizations use ISO 26000?

For social responsibility to make business sense, a business case has to be made for it. In this respect the standard begins by making an explicit link between an organization's social responsibility performance and its market performance.

As the introduction to ISO 26000 puts it: "An organization's performance in relation to the society in which it operates and to its impacts on the environment has become a critical part of measuring its overall performance and its ability to continue operating effectively."

In other words it's increasingly clear that organizations which engage with and authentically respond to the issues of social responsibility are likely to find market advantage.

As the standard points out, business benefits range from developing better decision making capabilities and generating innovation, to enabling new market access, helping recruit and maintain staff, and minimizing customer complaints. There's also money to be saved from better resource and energy use.

In addition, stellar performance in social responsibility will lead to recognition from analysts, investors, consumers, stakeholders and NGOs. It leads to higher customer and stakeholder confidence and the abolition of concerns around reputational risk. It enhances competitiveness.

Moreover in common with all voluntary standards, ISO 26000 provides guidance which will undoubtedly help organizations get on top of existing regulatory requirements and ahead of future legislation.

What will the impact be on organizations?

As mentioned above, ISO 26000 makes social responsibility accessible to all - and really none of the existing codes do that because they are essentially all focusing on single issues at a high level: be that labour practices, the environment, fiscal probity etc. Nowhere till now was there a comprehensive document which brings all the elements into one place, helping to develop an international consensus on what social responsibility means and the social responsibility issues which organizations need to address.

Additionally, and for the first time, ISO 26000 puts social responsibility practice within the grasp of anyone who's interested by providing guidance that translates principles into effective action.

In this way, the hope is that the standard disseminates understanding of social responsibility widely and therefore enables social responsibility practice to permeate more deeply, broadly and quickly.

However, in the final analysis, the impact on organizations is really for organizations to decide. As Watkins notes: "The standard is the easy bit. Organizations in their own right really need to make the commitment to implement some fairly substantial change in order to move forward."

Furthermore, he cautions: "Be it towards the community or be it towards the environment, those who do not engage with social responsibility will have a difficult time going forward as society becomes more aware of climate change and resource depletion."

He concludes: "My advice is to engage to move forwards and survive to a place which is more sustainable." And it looks like ISO 26000 is set to be a useful tool in helping organizations do just that.

For more information on social responsibility.

Business Standards © 2010. Editorial produced by Caspian Publishing in association with The British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.

Question: Given the state of the environment, should issues like energy management in business be more regulated and closely monitored instead of voluntary?

Climate change is such an urgent issue that some might argue the only answer to this question is "Yes". However, creating laws that achieve their goals in precisely the right way is challenging and time consuming at the best of times. And when it comes to climate change, the factors involved are varied - too many for any one law or set of laws to cover adequately.

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