A new common framework for corporate social responsability the international standard iso 26000

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Insight Corporate Excellence

The ISO 26000 guidelines manifest a break-through in the field of certification. This is the only “not for certification” regulation in which essential consensus was achieved based on the nature of CSR: the standard can be used only as a recommendation, it is voluntary and cannot be used for obligatory certification purposes.

The International Organization for Standardization (ISO) set up a working group, which reached an agreement in November 2010 and issued guidelines setting a conceptual and structural framework for Corporate Social Responsibility (CSR). The guidelines were adopted by non-unanimous votes, but with no strong opposition to its fundamental premises. Led by the Swedish and Brazilian ISO teams, more than 2,000 experts with different backgrounds (consultancy, NGOs, associations) and from different countries took part in developing this document. They recognised existence of different national standards and were united by the common goal: promote the brand, the vision and common terminology.

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A new common framework for corporate social responsability the international standard iso 26000

  1. 1. InsightsStrategy DocumentsI02/2011Public AffairsA new commonframework for CorporateSocial Responsibility:the international standardISO 26000 The publication of the ISO 26000 guidance is an important advance in an area where so far there have been many efforts to establish several different standards of certification. It is the only norm not requiring certification on which a consensus has been reached, perhaps because it possesses one of the essential qualities of CSR: it is a completely voluntary standard. The International Organization for Standardization The norm can be understood as a standard to be (ISO) initially appointed a working group, that adopted internationally even though at present the arrived at a consensus in November 2010, to Europeans have shown more interest in it and in launch this guide-line which establishes a stable, putting it into effect than the Americans. conceptual, and structural framework for CSR, and which, although it was not unanimously The fact that the norm is non-compulsory is perhaps adopted, was approved without a great deal of its most striking feature, in so far as it focuses on the opposition to the basic points. voluntary nature of CSR as far as organizations are concerned, as opposed to the view of those experts It was drawn up with the cooperation of 2,000 and professionals who strongly feel that it should be experts from different areas (consultants, NGOs and compulsory and that rules should be strictly binding, associations), and countries, headed by the teams within a framework similar to that of legislation. from Brazil and Sweden and associated with ISO, after the organization had noticed that there were The advantage of a voluntary standard different national standards, although all involved In the opinion of Antonio Argandona, professor professed a common goal: that of promoting a of Economics and holder of the Chair in CSR and common framework, vision, and terminology. Corporate Governance at IESE Business School,Document prepared by Corporate Excellence with reference to, among other sources, the intervention of Antonio Argandona (professor of Economics andholder of the ‘la Caixa’ chair in CSR and Corporate Governance at IESE) during the sessions of the Executive Education Program “Making Social ResponsibilityWork: The Cornerstone of Sustainable Business” organized by IESE Business School in Barcelona in July 2011.
  2. 2. A new common ISO 26000’s non-compulsory nature is its great The seven core subjects at a glanceframework for advantage. It is merely a suggestion, a guide-line orCorporate SocialResponsibility: advice on how to behave and is one of the basic Thethe international tenets of CSR; it depends on each company and Labour environment Fair operatingstandard ISO 26000 on each individual, so that we are able to speak practices practices of the principle of personal rather than just legal Human Consumer responsibility: It allows for innovation, different rights. issues ways of implementation and improvements in how the standard is put into practice. Community Organizational Social involvement governance and Responsability developments The question of a voluntary guideline is central in the on-going debate on CSR. It shows that CSR has come about as a result of the important realization Source: Desarrollo Humano Sostenible. 2011 by business of the knock-on effects of economic and corporate activity. It demonstrates the acceptance by companies of social realities, which, as in the case of individual responsibility, are a consequence An overall definition of CSR of their actual existence. As we said at the beginning of this article, ISO 26000 - SR provides a harmonized framework, a vision Moreover, at the centre of the debate about of CSR that is international and contains global adopting a socially and environmentally responsible principles in line with Kant’s moral philosophy approach to business is the question of whether a as well, expressed by a common definition and in standard is voluntary or compulsory, and is precisely common terms: “CSR is the responsibility assumed the point at which American and European views by an organization for the impact of its decisions of CSR diverge. and activity on society or on the environment, through accountable, ethical behavior which contributes to sustainable development, takes ‘The fact that the norm is account of stakeholders’ expectations, is assimilated by the organization and is applied in all its dealing non-compulsory is perhaps with others”. its most striking feature, in Hence it contains an approach as to the sphere of so far as it focuses on the influence of the organization (responsibility towards voluntary nature of CSR others) and the evaluation of any impacts (positive or negative changes in society), as well as the as far as organizations are principles of responsible behavior to be followed by concerned.’ companies, and aspects on which work is needed: • Key themes to be complied with. CSR must not be turned into an obstacle to free • Relevant or significant matters to be developed. trade, nor a means of imposing sanctions or a • Competency and skills to be developed. restrictive form of regulation. This is why the • Communications and relationships to be built. voluntary standard occupies an important central • Interest groups to be prioritized. position between those who believe that the very idea of social responsibility has no place in business and those who see it as something that, to a certain It also establishes the path responsible companies extent, stifles the business initiative necessary to should follow, explains how to integrate CSR into avoid the evils intrinsic in the system. Corporate Governance and the procedures that must be complied with, and it helps governments In addition, the norm concerns several different key to understand the role of Corporate Social themes which may be grouped and summarized into Responsibility in providing a common world- seven separate areas in order of importance: wide viewpoint and in encouraging sustainable development in countries in cooperation with the 1. Human rights. private sector. 2. Corporate governance. 3. Labor relations. Seven principles for one principle 4. Fair dealings. The ISO guideline document for CSR clearly sets 5. Environment. out seven principles to be used by firms in directing 6. Consumer affairs. a socially responsible policy: 7. Social development. Insights 2
  3. 3. A new common 1. Responsibility: allowing questions to be asked 4. Consumer affairs: responsibility regardingframework for about the firm’s decisions and activities by its own products and services.Corporate SocialResponsibility: management, legal authorities or interest groups. 5. Labor relations: including subcontractedthe international 2. Accountability: openness in decision-making companies.standard ISO 26000 and activities which affect society, the economy 6. Social development: involvement in the or the environment, and willingness to community and contributing to it. communicate these clearly, precisely, honestly, 7. Human rights: which give protection fully and in a timely manner. to everyone. 3. Ethics: behavior that is in accord with accepted legal principles and good conduct with regard to specific situations in accordance with ‘The reasons for publishing international standards and norms. 4. Respect: for the stakeholders, individually or and adopting international collectively, who are interested in any of the guide-line ISO 26000 organizations activities or decisions. 5. Compliance: with the law, by accepting its are without doubt authority and acknowledging that no one is more powerful that the above the law. 6. Obedience: to the traditional norms of behavior arguments’ and international law, generally accepted principles and agreements between governments worldwide which are internationally recognized. How to use the CSR guidance 7. Observance: of human rights and the importance There are also seven basic steps to be taken in of respecting and promoting them. order for firms to incorporate and use this guidance, correctly. The guidance for Corporate and Social Basically, these seven principles correspond to the Responsibility has been published for the first time, seven ISO themes previously mentioned and which to bring about a consensus in this subject: are explained as follows: 1. To identify the specific features of the company 1. Corporative Governance: the system for taking with regard to CSR: the corporate culture, brand and implementing decisions. history and heritage, its values, value chain, 2. Environment: the impact on immediate industry, activities and emplacement surroundings and on the global environment. 2. To prioritize stakeholders and identify their needs 3. Fair dealings: morally just conduct in one’s and expectations: they may have contradictory dealings with other firms. interests and be affected differently by the firm’s activities and decisions. Managing for sustainable business Two fundamental practices of social responsibility Clause 5 Clause 4 Recognizing social responsability Stakeholder identification and engagement Seven principles of social responsability Socail Clause 6 responsibility Organizational govenance core subjects Accountability Human Labour The Fair Community Consumer rights practices Environ- operating involvement and issuers Sustainable development Transparency ment practices development Ethical behaviour Related actions and expectations Integrating social The relatonship of Clause 7 Respect for responsability an organization @ Understanding the stakeholder throughout an social responsability organizaton characteristics to interests of the organization social responsability Respect for the rule of law Practices for Voluntary initiatives for integrating social Communication on social responsabilitity responsability throughout social responsability Respect for and organizatioin international norms of behaviour Reviewing and improving an Enhancing credibility organization @ actions and regarding social Respect for practices related to social responsability human rights Annex: Examples of voluntary initiatives and tools for social responsability Source: United We Stand Productions and Planetary Citizens, 2011. Insights 3
  4. 4. A new common 3. To recognize Corporate and Social Conclusions: criticism of ISO 26000framework for Responsibility, in three areas: the relationship At present there have been two fundamentalCorporate Social with society, with interest groups, and between criticisms of the procedure and final draft of thisResponsibility:the international society and the stakeholders. international ISO norm which does not requirestandard ISO 26000 4. To understand the role of CSR within the certification: organization: developing a due diligence (internal audit) which includes a study of materiality or • About the process: the defective way in relevance with key themes, the allocation of its which the principal agents involved were importance, determination of the commented represented and the conflicts of interest sphere of influence and the establishment of due to the presence of consulting bodies. priorities. • About the result: it is not relevant or useful 5. To decide practices that should be developed: for small and medium-sized enterprises defining the direction the business should take (SMEs) which constitute the major part of and providing sufficient means to achieve this, businesses world-wide, the language used is as well as incorporating it effectively and with a neither accessible or easy, it does not respect good level or representation into the hierarchy cultural differences with different approaches of the organization. to different matters, and the possibility that 6. To communicate openly and convincingly: in the end it will be used and manipulated for by reinforcing methods, setting out clear certification (eventually in most cases it is the information, and directing the firm’s efforts letter, not the spirit that is complied with). towards resolving conflict, as well as opening up honest and productive dialogue between all the Nevertheless, the reasons for publishing and adopting parties concerned. ISO 26000 are without doubt more powerful that 7. To improve continually: doing more does not the arguments against, on the economic grounds improve CSR, we need to do better things and of efficiency and performance, and on the grounds necessary things, such as revising performance, of extending the work and recognition of CSR (by following-up activity, checking business imitation and as a driving force), of standardization indicators, and analyzing the development and and of the establishment of strong foundations on progress achieved. which to build more socially responsible businesses. Insights 4
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