The importance of ISO 26000

Dr. Priyadarshani Talgaswatte -Deputy Director General Sri Lanka Standards Institution

In 2001 an ISO Committee started a feasibility study on standards for Corporate Social Responsibility in response to growing concerns about businesses social integrity.

Eight years later, a five month balloting period was just finished for voting on the draft ISO 26000 with a view to publishing this standard as a full-fledged standard in late 2010.

The aim is to provide the following:

"The future International Standard ISO 26000, Guidance on social responsibility, will provide harmonized, globally relevant guidance for private and public sector organizations of all types based on international consensus among expert representatives of the main stakeholder groups and so encourage the implementation of best practice in social responsibility worldwide" ISO, March 2010.

It will not be a management standard and not intended to be used for certification purposes, more of a first step to social responsibility (SR), for all organizations, of all sizes, across all sectors.

From a global perspective it has taken the biggest picture approach ensuring strong consistency with all associated standards and existing guidance from international Bodies including, International Labour Organization, UN Global Compact, OECD and many others.

Why is ISO 26000 important?

Sustainable business for organizations means not only providing products and services that satisfy the customer, and doing so without jeopardizing the environment, but also operating in a socially responsible manner.

Pressure to do so comes from the stakeholders, i.e. customers, consumers, governments, associations and the public at large. At the same time, far-sighted CEO's recognize that lasting success must be built on credible business practices and the prevention of such activities as fraudulent accounting and labour exploitation.

Figure 1 - Schematic overview of ISO 26000. Source:- ISO/DIS 26000

On the one hand, there has been a number of high-level declarations of principle related to Social Responsibility and, on the other there are many individual SR programmes and initiatives.

The challenge is how to put the principles into practice and how to implement SR effectively and efficiently when even the understanding of what "social responsibility" means may vary from one programme to another.

In addition, previous initiatives have tended to focus on "corporate social responsibility", while ISO 26000 will provide SR guidance not only for business organizations, but also for public sector organizations of all types.

ISO's expertise is in developing harmonized international agreements based on double levels of consensus - among the principal categories of stakeholder, and among countries.

ISO 26000 will distil a globally relevant understanding of what social SR is and what organizations need to do, to operate in a socially responsible way.

SLSI established the National Mirror Committee on SR in the latter part of year 2009 having a more representative body of stakeholders to contribute towards the development of ISO 26000.

How will ISO 26000 help organizations?

ISO 26000 will help all types of organizations - regardless of their size, activity or location - to -operate in a socially responsible manner by providing guidance on the following:

* Concepts, terms and definitions relating to social responsibility

* The background, trends and characteristics of social responsibility * Principles and practise relating to social responsibility

* Core subjects and issues relating to social responsibility

* Integrating, implementing and promoting socially responsible behaviour throughout the organization and its sphere of influence

* Identifying and engaging with stakeholders

* Communicating commitments and performance related to social responsibility.

What will ISO 26000 achieve?

ISO 26000 will integrate international expertise on SR , what it means, what issues an organization needs to address in order to operate in a socially responsible manner, and what is best practice in implementing SR tool to assist organizations to move from good intentions to good actions.

What is ISO 26000?

This is an international standard providing guidance and assistance to organizations in addressing their SR issues and also to provide practical guidance related to implementation of SR, identifying and engaging with stakeholders, and enhancing credibility of reports and claims made about SR. This is not intended for third party certification nor is it a management system standard. The scope is to;

i. Emphasize performance, results and improvements.

ii.Increase confidence and satisfaction in organizations among their customers and other stakeholders.

iii.Be consistent with and not in conflict with existing documents, international treaties and conversions as well as ISO standards.

iv.Promote common terminology in the SR field to broaden awareness of SR.

ISO 26000 - Guidance on SR

Introduction The introduction gives information on the content of the guidance standard and the objectives in promoting its preparation.

1.Scope

This section will define the subject of the guidance standard its coverage and the limits of its applicability.

2.Terms and conditions

This section will identify terms used in the guidance that require definitions and provide such definitions.

3.The SR Context in which all organizations operate

This section provides the historical and contemporary context for SR. The section also will address questions arising out of the nature of the concept of SR. In addition relevant stakeholder issues have been addressed.

4.SR principles relevant to organization

This section has identified 7 SR Principles drawn from a variety of sources and provides guidance on these principles. Relevant stakeholder issues have also been addressed.

5.Guidance on Core SR subjects/issues

This section has provided separate guidance on 7 Core subjects/issues and relate them to organizations; hence, relevant stakeholder issues have been addressed.

6.Guidance for organizations on implementing SR

This section provides practical guidance on implementing and integrating SR in the organization, including, for example, policies, practices, approaches, issues, identification, performance assessment, reporting and communication. Relevant stakeholder issues have been addressed here.

7.Guidance annexes

This section has identified a set of SR Principles drawn from a variety of sources and provides guidance on these Principles.

8. Bibliography

Relationship between SR and sustainable development

Although many people use the terms SR and sustainable development interchangeably and there is a close relationshipbetween the two, they are different concepts.

Sustainable development is a widely accepted concept and guiding objective that gained international recognition following the publication in 1987 of the report of the World Commission on Environment and development: Our Common Future.

Sustainable development is about meeting the needs of society while living within the planet's ecological limits and without jeopardizing the ability of future generations to meet their needs.

Sustainable development has three dimensions-economic, social and environmental-which are interdependent; for instance, the elimination of poverty requires both protection of the environment and social justice.

Numerous international for have reiterated the importance of these objectives over the years since 1987, such as the United Nations Conference on Environment and Development in 1992, and the World Summit on Sustainable Development in 2002.

Social Responsibility has the organization as its focus and concerns the responsibilities of an organization to society and the environment.

Social responsibility is closely linked to sustainable development. Because sustainable development is about the economic, social and environmental goals are common to all people, and they can be used as a way of summing up the broader expectations of society that need to be taken into account by organizations seeking to act responsibly.

Therefore, an overarching goal of an organization's SR should be to contribute to sustainable development.

The seven principles, practices and seven core subjects described in the International Standard (Please see the Schematic Diagram) form the basis for an organization's practical application of social responsibility and its contribution to sustainable development. The decisions and activities of a SR organization can make a meaningful contribution to sustainable development.

The objective of sustainable development is to achieve sustainability for society as a whole and the planet we live in. It does not concern the sustainability or ongoing validity ofany specific organization.

The sustainability of an individual organization may, or may not, be compatible with the sustainability of society as a whole, which is attained by addressing social, economic and environmental aspects in an integrated manner.

Sustainable consumption, sustainable resource use and sustainable livelihoods relate to the sustainability of society as a whole.

The State and social responsibility

This International Standard cannot replace, alter or in any way change the duty of the State to act in the public interest because the State has the unique power to create and enforce the law, and it is different from organizations.

For instance, the duty of the state to protect human rights is different from those responsibilities of organizations with respect to human rights that are addressed in this International Standard.

The social responsibility of organizations is not and cannot be a substitute for the effective exercise of state's duties and responsibilities. In particular, ensuring the effective application of laws and regulations so as to foster a culture of compliance with the law, is essential in order to enable organizations to be socially responsible.

This International Standard does not provide guidance on what should be subject to legally binding obligations; neither is it intended to address questions that can only properly be resolved through political institutions.

However, the State can assist organizations in their efforts to operate in a socially responsible manner in many ways. Governmental organizations, like any other organization, may wish to use this International Standard to inform their policies, decisions and activities related to aspects of social responsibility.

Core Subjects Vs State Governance

Seven core subjects and 171 issues of SR have been defined in the ISO/DIS 26000. In this context it is clearly evident that a comprehensive study has been carried out by the WG of ISO in determining and achieving sustainable development.

Core subjects are:

1 Organizational governance

2 Human rights

3 Labour practices

4 The environment

5 Fair operating practises

6 Consumer issues

7 Community Involvement & Development

The State machinery in a country has to develop strong and practical government mechanisms to address human and political rights in order to resolve grievances. The organization has to function in relation to such an environment hence, considered a satisfactory situation.

However, the organization should address their employees and other stakeholder rights and requirements in the field of socio- economic and cultural areas and their fundamental rights and at work.

This directly compares with labour practices, of the organization, where wages, health and safety balance between work lives: family, training and social dialogue is vital elements of this core subject.

The Labour Department of Sri Lanka has developed all the important laws and statutes in this regard. Sri Lanka has very strict child labour laws in comparison to the South East Asian countries and its high literacy rate has undoubtedly contributed to this situation.

Further, government policy of free education is the key function in developing this core subject.

Spearheaded by the Central Environmental Authority (CEA), the relevant government machinery is appropriately positioned by implementing required laws to ensure safe environment for the people of Sri Lanka to live- in.

SR will further support prevention of pollution and encourage organizations to achieve use of sustainable resources and their protection.

Standards emphasize on fair operating practices for all organizations in order to achieve sustainable development. Though this is relevant, organizations may opt for competitive advantages over each other to achieve their organizational goals and objectives.

However, difficult, organizations should strive to achieve these criteria. As per this standard in Sri Lanka consumer issues are addressed and all relevant areas are covered by the State legislature.

Then consumer issues become somewhat familiar to the public and consumers in any organization. However, strong Consumer Associations are not yet a reality.

Community development is not new to the Sri Lankan Nation, as from ancient times, people have supported the less privileged. In the SR context organizations are required to focus attention on wealth creation and employee skill development through education and investment. Many multi-national organizations have engaged in this endeavour and community development has taken place.

Road Map for SR in Sri Lanka

Charity is not a new concept for Sri Lankans. Inherited through Buddhist culture donations for the needy have been practised since the times of ancient history. Even in the present day, philanthropy has been practised by many organizations in consideration of their community.

But this was very clearly shown to the whole world during the 'tsunami' of 2004. But SR is not only philanthropy. SR is the comprehensive study of identifying stakeholders and in consideration with them to identify the core subjects and taking appropriate action to develop the community.

In the last few years, a large number of Companies has appeared in the Market place of the world. Concentration of entrepreneurs in the new dimensions is the basic factor of success.

As compared to the previous years, entrepreneurs have acquired more awareness regarding their social responsibilities. Now companies not only focus on the needs of their customers but also the needs of society and the environment, we live in.

SR popularity is growing day by day, as more and more Companies around the globe focus towards the sustainability of environment and resources at large.

Companies now have come to realize that their future as successful, large Companies is dependent upon the future of the environment and the society to which they belong and the in which they exist.

It has been observed that customers are showing a keen interest in buying the products of that Company which is fulfilling its social responsibility.

Social Responsibility (SR), simply means that companies should spend some proportion of their profit on the betterment of the society by plantation of trees, proper disposal of waste, using alternate sources of electricity, proper utilization of raw material and, if possible, using renewable resources of energy.

The following ten point road map is suggested to start the SR program in any organization.

Step 1

Conduct a Rapid Preliminary Assessment of the potential for SR in the organization

Conducting a rapid preliminary assessment with the involvement of all stakeholders or cross section of your worker community would bring immense results. Initially this could be done through a questionnaire and discussed thereafter like any other survey. After identifying required SR areas for implementation, a dedicated action team can be appointed to further identify detailed requirements and recommend implementation with cost analysis. In this way all vital SR issues could be identified with the implementation of an action plan

Step 2

Determine Preliminary SR Strategy and Identify Potentate Partners

Data for the preliminary assessment will provide inputs for developing a strategy.

If there are more action plans you may develop multiple strategies. Thereafter GAP analysis could be carried out. Identifying similar SR projects will lead to identifying potential partners for selected strategies and then implementation could be more feasible. Partnership can be made with these identified partners for financial contributions and expert advice. The partners may be State backed or aid Agencies as identified in this selection process.

Step 3

Evaluate each Partnership Opportunity for Risks and Benefits

It may be necessary to conduct promising introductory meetings with prospective partners in order to exchange ideas for selected SR initiatives. To ensure transparency it may be prudent to arrange for a cross section of stakeholders to participate in such meetings.

Step 4

Hold in-depth Discussion with Prospective Partners

After selecting partners, it is necessary to conduct in-depth discussions on the SR intentions for implementation.

Step 5

Re-asses the potential for a SR partnership.

Step 6

Structure and fully develop the SR initiative and strategic plan with the partnership.

Step 7

Engage the stakeholder in developing the SR initiative.

Step 8

Close the deal and formalize the partnership agreement.

Step 9

Launch, Manage and Implement the SR initiative.

Step 10

Build the partnership, communicate, evaluate and disseminate the SR initiative and success.

It would be necessary to engage all stakeholders in discussion at all times during the SR initiative and implementation. This is of prime importance to ensure that the organization is fulfilling its needs as communicated. In this context organizations will strive for a win-win situation at all times.

ISO 26000 aims to be holistic with no specific responsibility focus area. However, SMEs in developing countries face difficulties such as fewer opportunities to benefit from social protection, lower access to formal credit supplies and have limited subsidies from their governments. Also SMEs cannot be considered as a homogeneous group because it encompasses a wide variety of business and according to International Chamber of Commerce, SMEs account for 90 percent or more of all forms in both industrialized and emerging economics.

Also, SMEs are reported to provide around 70 percent of productive employment in Asia. SMEs are viewed as a challenge in the sustainable development debate.

It is likely that SMEs require external expertise to interpret and implement ISO 26000 in a manner that is best suited for them in their business context.

(Concluded)