CSR2, Assignment 1. What is the ISO 26000? Discuss the limits and potential of the ISO 26000 in helping businesses to operate in a socially responsible way. 1380 words. By Federico Werner (fedewerner@gmail.com).
This short essay is about the standard ‘ISO 26000: Guidance on Social Responsibility’. After a brief description of the standard, its purpose and its approach, the discussion focuses on how effective it may result for businesses adopting it in order to enhance their performance on social responsibility.
What is ISO 26000? ISO (International Organization for Standardization) is a non-governmental organization (NGO) composed of representatives from more than 160 national standards organizations from around the world. Its purpose is to issue standards to facilitate international trade and convey information about goods and services (Henriques 2012: 10). The ISO 26000 is a standard aimed at guiding organization of varied nature on social responsibility (SR), defining it as the responsibility an organization has for the impacts of its decisions and activities on society and the environment (ISO 2010: 3). Although the majority of standards issued by ISO refer to technical aspects of commercial products and organizational management systems, ISO 26000 embodies a new type of proposal, since it aims at complex subjects such as sustainable development and the society’s expectation of an organization. The development of ISO 26000 began in 2002 and ended in 2010. It was carried out by a working group on SR using a multi-stakeholder approach, with experts representing organizations of consumers, government, industry, labor, NGOs, among others, from more than 90 countries (ISO 2010: v). The development process of ISO’s standards is characterized by being open, impartial and consensus-based (ISO 2014: 19).
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How does ISO 26000 works? Unlike most ISO standards aimed at organizational practices, ISO 26000 is not a management system and is not certifiable. It contains no set of rules to be complied linearly by its users (ISO 2014: 8). In fact, it is a guide, and its adoption is based on the willingness of user organizations or businesses to incorporate social and environmental considerations in its decision-making and be accountable for their impacts. By doing this, the organization goes beyond its legal obligations. The ultimate objective –and main motivation– to improve the organization’s SR is to maximize its contribution to sustainable development (Henriques 2012: 8, ISO 2010: 1). The standard proposes seven behavioral ‘SR principles’ that are to be respected while taking action to tackle with another seven ‘core issues of SR,’ which in sum cover widely the field of organizational SR. A key feature of how the standard functions is the selfassessment that the user needs to carry out in order to follow the two ‘fundamental practices of SR’: recognition of its own SR, and stakeholder identification and engagement (Henriques 2012: 14).
How does ISO 26000 affect the way businesses implement SR? What is the expected outcome of implementing the standard? I will try to distinguish the main positive impacts (contributions) and restraints (limits) a business may obtain or face while using the standard in order to operate in a socially responsible way. But, what does it mean to ‘operate in a socially responsible way’? I understand this as the necessary actions that businesses carry out in order to have a positive impact on society and the environment, in line with ISO’s definition of SR. This consideration is important because it leaves out of the analysis the effects the standard has on benefit of the organization only, such as competitive advantages. ISO 26000 was prepared for being used by all types of organizations (both commercial and non-commercial), but I will emphasize on its effect on businesses, as required in the instruction.
Contributions 1) By identifying and engaging with the stakeholders –as proposed in the second fundamental practice of SR–, the responsibility of the organizational management is widened beyond the requirements of stakeholders with a financial interest only (e.g. 2
shareholders), giving space to attend issues related to sustainable development (Henriques 2012: 4). 2) As a result of the standard being a guide and not a certifiable management system standard, ISO 26000 does not provide a list of rules, policies and procedures to be followed in order to achieve “compliance” of SR. Instead, it:
Conduces users to several processes of self-assessment in order to identify the stakeholders, the relevant SR issues according to the organization’s situation, and to determine the relevance of impacts and its sphere of influence (Clauses 5.2, 5.3, 7.2 and 7.3).
Proposes overall management practices that should be considered, such as due diligence, risk management, among others, from which users must select the ones which apply the best.
This ‘freedom’ the standard gives users to ‘take ownership’ of their particular use of the standard is necessary in order to tackle complex issues such as stakeholder engagement, social expectations and others with a value-based sensibility and creativity that a mechanical management system would hardly allow (Henriques 2012: 16). Other contributions of ISO 26000 apply more generally to SR as a discipline, but affect businesses indirectly: 3) Establishment of SR in the global agenda. Although there are several initiatives in the matter, ISO’s reputation and background gives ISO 26000 a particular importance, since the chances of adoption of the standard by governments and official institutions around the world are greater. While many independent initiatives may be successful in some regions, the reach of ISO is global (Henriques 2012: 6). 4) Strengthening SR conceptual framework. The standard ‘promotes the common understanding in the field of SR’, providing users with widely agreed terminology and working approaches (ISO 2010:1).
Limitations 5) The lack of detail and specificity in how to tackle with some issues of SR, in line with the argument for 2), may be also be considered as a limitation. The standard’s approach is ‘so broad in terms of content that it arguably fails to give meaningful guidance to the organizations to which it is addressed’. For example, how to determine social expectations, or how to cope with unexpected situations or conflicts (Johnston 2012: 115). 3
6) The main limitation of ISO 26000, is derived from the fact that the standard rests on a ‘business case’ for SR. Acting in a socially responsible way, according to its stakeholders, will provide a business with commercial success. In this perspective, SR becomes a way for businesses to answering the requests of a society which is increasingly aware of the issues related to sustainable development. By means of satisfying the expectations of society, the organization will continue to be competitive, be respected, maintain the best workers, and ultimately be successful. In other words, fulfilling society’s expectations is the leading force of SR, rather than operating sustainably. This is highly arguably, and may not induce to enough necessary changes in businesses to transcend the business-asusual scenario and further sustainable development (Johnston 2012: 116). 7) Other more general limitations are the factors inhibiting organizations from adopting the standard. For example:
Non-certifiable: certification of compliance may be an incentive for adoption due to commercial purposes or financial incentives from third parties. For this reason, some businesses may select other initiatives.
Cost and complexity: the purchasing cost of the standard and the effort required for its understanding may prevent small businesses from accessing to it (Henriques 2012: 23).
Conclusions In general, the standard offers a comprehensive approach to SR, with a strong support in terms of legitimacy. This results in an overall strong potential to help businesses make a positive contribution to sustainable development. However, considering it has been proposed as a guide and thus lacking specific and systematic help with hot to implement SR, it can be stated that its effectiveness may be the greatest for businesses in early stages of implementing SR. The mentioned selfassessment processes that the standard proposes has an important potential to change organizational management’s values and culture toward sustainability. For businesses in advanced stages of the implementation of SR, more specific and perhaps certifiable options may be used.
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References Henriques, A. (2012). Standards for change? ISO 26000 and Sustainable Development. London: IIED. Retrieved from http://www.iied.org/ ISO. (2010). ISO 26000: Guidance on social responsibility. Geneva: ISO. ISO. (2014). Discovering ISO 26000. Geneva: ISO. Retrieved from http://www.iso.org/iso/discovering_iso_26000.pdf Johnston, A. (2012). ISO 26000: Guiding Companies to sustainability through social responsibility? European Company Law, 9(2), 110–117. Retrieved from http://ssrn.com/abstract=2083479
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