Latest Article published December 2012
Update on Publication of ISO 26000
- Guidance on Social Responsibility
by Eva Cahill, Director, Kinelea Ltd
Social Responsibility (SR) has come a long way from organisations making some charitable donations at the end of the year. These philanthropic endeavours are extremely important and commendable but are only one element in the much wider sphere of activity covered by Social Responsibility today.
Though there are many different terms for SR such as Corporate Social Responsibility (CSR), Triple Bottom Line (3BL) management or Environmental, Social and Governance (ESG) performance, the common goal for organizations adopting any of these strategic initiatives is sustainability, transparency and improved governance.
The economic downturn has increased organisations drive for cost efficiency and expansion into new markets. When executing their cost reduction and market expansion initiatives in the current economic climate, organisations may be inclined to reduce their focus on ethics, governance and sustainable business practices. Recent and well publicised corporate ‘irresponsibility’ examples have stripped reputations from organisations and contributed to increased and continuous scrutiny of their strategies and operating practices by customers, investors, the media and other stakeholders as well as negatively impacting their financial performance.
The negative consequences of failing to adopt and adhere to SR principles are evidently not in the best interest of the company and its shareholders. The benefits are detailed in a recent AT Kearney1 report stating that companies committed to corporate responsibility practices are continuing to perform above average in financial markets. SR performance directly impacts an organisation’s ability to expand into new markets, attract talented workers and access key resources - all areas that influence the future financial performance of the organisation.
Some benefits of incorporating social responsibility into an organisation’s strategy
- Financial – uncovers opportunities to retain and increase market share and reduce costs
- Supply Chain Management – enhanced and transparent relationship with suppliers
- Operations – identifies opportunities for increased efficiency and waste reduction
- Human Resources - increased employee health, satisfaction , productivity and retention
- Marketing - brand awareness, positioning, reputation, transparency and credibility
- Sales - increased customer satisfaction and retention
- Risk - reduced risk profile through comprehensive risk management
- Investor Relations - provides information key to current and potential investor decisions
Organisations are increasingly under pressure from consumers and legislators to provide more sustainable products and services which are sourced, manufactured, packaged, transported, used and disposed of in a more environmentally and socially responsible manner. Responsible Supply Chain Management, Green Public Procurement, Life Cycle Analysis, ‘Cradle to Cradle’ Product Design, ‘Chain of Custody’ traceability, Sustainable Key Performance Indicators (KPI) and other standards and practices are increasingly expected from suppliers and demanded by customers.
ISO 26000 - Guidance on Social Responsibility
The International Standards Organisation (ISO)
recognised the need for guidance in this area with the development of a new standard, ISO 26000 - Guidance on Social Responsibility. During the six year development of this standard, ISO identified and sought input from key stakeholder groups including representatives from industry, labour, government, consumers and NGOs.
The standard provides guidance on the following core SR subjects: organizational governance, human rights, labour practices, the environment, fair operating practices, consumer issues, community involvement and development. To give further guidance on the topics covered by the clauses of ISO 26000, Annex A of the standard provides an informative list of current cross-sector initiatives and tools such as:
- The Global Reporting Initiative (GRI),
- CSR 360 – Global Partner Network (Business in the Community UK),
- EFQM Framework for CSR & Excellence Model,
- Social Accountability International (SAI – SA8000 standard).
The final draft was recently approved by ISO members (September 2010) for publication in November 2010 and adoption as an Irish Standard. It should be noted that ISO 26000 is not intended for certification purposes and is a guidance standard.
Measuring and Reporting Success
Today, organisations must not only be ‘doing things right’ but also be ‘doing the right thing’. Reporting on SR performance using the ISO standard for guidance allows them to be ‘seen to do the right thing’. Many progressive organisations already publish their performance in dedicated SR reports using internationally recognised Performance Indicators and Reporting Frameworks such as those developed by the Global Reporting Initiative (GRI). These reports provide long term valuable information and direction on an organisation’s SR strategy and operations to both internal and external stakeholders by communicating its values, targets and culture.
Social Responsibility is fundamental for an organisation’s immediate and long term success in today’s global economy. ISO have recognised the need to provide a guidance standard to assist organisations initiate and develop their SR strategies and operations with the forthcoming publication of their standard, ISO 26000 - Guidance on Social Responsibility. The standard identifies the core topics an organisation needs to address in developing an SR strategy and compliments many of the existing SR initiatives and tools that some have already adopted.
About the author:
Eva Cahill is a Director of Kinelea Ltd
, a CSR and Procurement Services Company. She is a member on the NSAI’s Corporate Social Responsibility Committee which provides a representative and strategic forum through which Ireland's participation in International Standards Organisation working group (ISO/TMB/WG Social Responsibility) is co-ordinated.
- “Green” Winners- The performance of sustainability -focused companies during the financial crisis
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