ISO 26000:2010 and Draft Guideline ESR

Birendra RaturiCBI Trainer

Venue: 8-9 June 2011FICCI New Delhi India

Contents

How does ISO 26000 define “social responsibility”?Back Ground on ISO 26000:2010 What is the purpose and scope of ISO 26000?Outline of ISO26000Principles of social responsibilityISO 26000 and Draft National VoluntaryCore subjects of social responsibilitySchematic overview of ISO26000SR Core Subject and IssuesBusiness Drivers for SRObservations of ISO 26000 by SMEs Observations SMEsAdopting the Guidelines: A Suggested ApproachSix Steps for Building A StrategyIndicatorsIndian MSME Sector at a GlanceBusiness Responsibility Reporting FrameworkThe Business Case

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How does ISO 26000 define “social responsibility”?

2.16 social responsibility•Responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that•Contributes to sustainable development, including health and the welfare of society;•Takes into account the expectations of stakeholders;•Is in compliance with applicable law and consistent with international norms of behaviour; and•Is integrated throughout the organization and practiced in its relationships.

•Note 1 Activities include products, services and processes•Note 2 Relationships refer to an organization’s activities within its sphere of influence

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Back Ground on ISO 26000:2010

What is ISO?

ISO : International Organization for Standardization-Private, not-for-profit organization established in 1947 (Geneva, Switzerland)-Promotes the development of international standards -Voluntary standards: positive contribution to our world; encourage global trade-Worldwide collaboration (WTO, UN, ILO, WHO…)-157 country members, representing 98% of the world economy and 97% of its population. (ISO-Annual Report 2008)

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What is the purpose and scope of ISO 26000?

To assist organizations in addressing their SR;

To provide practical guidance related to operationalizing SR, identifying and engaging with stakeholders, and enhancing credibility of reports and claims made about SR;

To emphasize performance results and improvement;

To increase confidence and satisfaction in organizations among their customers and other stakeholders;

To be consistent with and not in conflict with existing documents, international treaties and conventions and existing ISO standards;

To promote common terminology in the SR field and broaden awareness of SR.

It is not intended to reduce any government's authority to address the SR of organizations; it is not intended to be a “non-tariff barrier to trade”(WTO)

It is not intended or appropriate for certification purposes. Any offer to certify, or claims to be certified to ISO 26000 would be a misrepresentation of the intent and purpose of this International Standard.

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Outline of ISO26000Clause Title Clause No Description of Clause Contents

Scope Clause-1 Provide Guidance to all type of organizations to go beyond legal and complement other initiatives not replace them

Terms and Definitions Clause-2

There are 27 Definitions

Understanding Social Responsibility Clause-3 Describes the past and contemporary subjects and trends , expectations of society

Principle of Social Responsibility Clause-4 Principles of Social Responsibility

Recognizing Social Responsibility and stake holder identification

Clause-5 Identification and engagement of Stake holders, organizations spheres of Influence

Social responsibility Core Subjects Clause-6 Explain the 7 core subjects and actionable points

Integrating SR througout the organization

Clause-7 Provide guidance to practice SR integrations throughout the organizations

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Principles of social responsibility

ISO 26000 highlights the 7 principles of SR

Accountability Transparency Ethical behaviour Respect for stakeholder interests Respect for the rule of law Respect for international norms of behaviour Respect for human rights

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Comparison of ISO 26000 and Draft National Voluntary Guidelines for the Social, Environmental and Economic Responsibilities of Business

Parameters ISO 26000 Draft National Voluntary Guidelines for the Social, Environmental and Economic Responsibilities of Business

Index 6 Clauses 6 Chapters

Principle 7 9

Core Elements

7 Defined within each Principle and vary in with each nos

Focus 1. All Kind of organizations

1. Special Chapter on MSME2. Business Responsibility

Reporting Framework

Reference Ref to 133 standards No reference as such

Integration A very important clause

Not detailed as such

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Core subjects of social responsibility

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Observations of ISO 26000 by SMEs Observations SMEs

Many Small & Medium Sized Enterprises (SMEs) see ISO 26000 as more designed for large multi-national companies (broad-based international standard)Labor practices in less developed countries still a concernSMEs that are linked to international value chains are more interestedMany SMEslack expertise/resources to understand the SR agenda, prioritize with business, estimate resources/costs to implementNeed to communicate internally how SR activities contribute to businessPersonal values of owner/Sr. managers are a key driver of SR at SMEsMany SMEsapproach SR issues in a “non-integrated”mannerSMEsfinanced by SR investors more likely to address SR

programs(2008 IISD Survey)

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Indian MSME Sector at a Glance

Number : 26 MillionEmployment : 60 MillionAccount for : 40% to Industrial Production; 45% of Exports; 9 % of GDPShape : 97% are partnership or proprietorshipsFormality : 94% are unregistered

In Industrial growth consistently outperforms large corporate sector by 2%

SMEs account for:

• 90-95%, or more, of industrial enterprises

• 70-75% of industrial employment

• 50-60% of industrial output (Source Unido)

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What benefits can be achieved

by implementing ISO 26000?The perception and reality of an organization’s performanceon social responsibility can influence, among other things :• Competitive advantage• Reputation• Ability to attract and retain workers or members, customers, clients or users• Maintenance of employees’ morale, commitment and productivity• View of investors, owners, donors, sponsors and the financial community• Relationship with companies, governments, the media, suppliers, peers, customers and the community in which it operates.

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Who can benefit from ISO 26000 and how?

ISO 26000 provides guidance for all types of organization,regardless of their size or location, on :1. Concepts, terms and definitions related to social responsibility2. Background, trends and characteristics of social responsibility3. Principles and practices relating to social responsibility4. Core subjects and issues of social responsibility5. Integrating, implementing and promoting socially responsible behaviour throughout the organization and, through its policies and practices, within its sphere of influence6. Identifying and engaging with stakeholders7. Communicating commitments, performance and other information related to social responsibility.

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Questions?