Friday, November 9, 2012

Sizing ISO 26000 two years later

Let's face it, "social responsibility" (SR) is complex. When SR experts and representatives from national standards bodies world-wide met in Geneva this week to discuss progress in the use of ISO 26000, a common concern raised by representatives of small businesses was that the standard is "too complex". One representative of SMEs in Europe went on to claim that most of his members do these things in any event, highlighting a list of regulatory and other requirements that apply in European countries.

If they act responsibly in any event, one couldn't help wondering why ISO 26000 is therefore "too complex". Maybe the sin of the standard is simply the fact of having put all of this on paper, in one text. In the early days of developing the "Guiding Principles on Business and Human Rights" - endorsed unanimously by the UN Human Rights Council in 2011 - one senior business representative also commented that the earlier Draft Norms were simply too much. The draft text reflected all that is already required by law of business world-wide, but seeing it all captured in one document was simply too much to swallow.

This dilemma is nothing new to the Global Reporting Initiative (GRI). For the expert in some business area or SR field the guidance comes across as superficial, too generic. Yet for the newcomer asked to start using the standard, the initial response is often "too complex, too much, too costly". It reminds of the Austrian Emperor who said to Mozart: "Too many notes!" Every GRI revision process inevitably includes a discussion of the large number of indicators. Yet the fact that the GRI manages to capture sustainability performance in 81 indicators is remarkable. Considering the complexity of SR and sustainable development, any manager should be thankful that it is not some thousand performance indicators.

When it comes to "relevance", beauty is in the eyes of the beholder. There will always be some stakeholder who feels strongly that a certain topic deserves the addition of yet another indicator. There seem to be little interest in consolidated or "integrated indicators" - for example eco-efficiency - as highlighted in the G2 version of the GRI Guidelines during the early 2000s. The development of guidance on Integrated Reporting today may reignite interest in this. The new Sustainability Accounting Standards Board in the USA is also eager to produce scorecards or shortlists of key topics and updated KPIs on a sector-by-sector basis.

Part of what makes ISO 26000 valuable as introductory document is its listing of seven "Core Subjects". Some may feel that more could be added, as was the case with Denmark that added animal welfare as core subject in its new, certifiable DS 26001. But the seven Core Subject areas of ISO 26000 reflect an agreement among experts from all corners of the Earth involved in the multistakeholder process that was ISO/TMB Working Group on Social Responsibility. It was agreed that these are the key areas where any "socially responsible" organisation should be doing something. Only the menu of sub-items (issues) listed under each Core Subject can be addressed a la carte, considering what issues are material to a specific organisation.

ISO 26000 is clearly not fascinating reading for managers leading sustainability programmes in multinational enterprises. Its content is probably of greatest value to large companies in developing markets who are new to the SR agenda. The lofty titles of the agenda may appear foreign to them, in the same way that any SME owner has preconceived ideas about "SR" and is likely to say "too much" even before touching ISO 26000. But from interviews with business managers in emerging markets it quickly appears that they are in fact grappling with many SR topics without calling it such. What ISO 26000 offers them is a framework to formalise their approach, identify gaps and deal with relevant topics more systematically. This includes reference to certifiable ISO standards such as those under the ISO 14000 and ISO 9000 series, with a better understanding of how all of this fits together.

As to the question of size: SMEs typically constitute over 90 percent of business in all economies. With this comes massive employment and environmental impact in aggregate terms. Key factors that influence their activeness in the SR or sustainability field include their size, age and level of international exposure (exports). Views differ on the impact of these factors. Some believe it is exactly younger enterprises of activist entrepreneurs that are more likely to be enthusiastic. A critical factor in mobilising more SMEs to take action is the perceived absence of economies of scale. Making the case therefore lies in raising awareness and understanding, with examples that illustrate both matters of principle and economic gain. ISO 26000 can play an important part in making this happen. Progress will be step-by-step. As the Emperor added: "There are only so many notes the ear can hear in the course of an evening."

NOTE: ISO 26000 / "Guidance on Social Responsibility" was launched in 2010 after five years of negotiation. The membership of the Working Group that developed ISO 26000 was the largest and most broadly based in terms of stakeholder representation of any group formed to develop an ISO standard. Six main stakeholder groups were represented: (i) industry, (ii) government, (iii) labour, (iv) consumers, (v) non-governmental organisations and (vi) service, support, research and others. By 2010, the Working Group process had 450 participating experts and 210 observers from 99 ISO member countries and 42 liaison organisations. The latter included representatives of the ISO Technical Committees on Quality Management and Quality Assurance (TC176) and Environmental Management (TC207). I participated in the ISO 26000 process as nominated expert representing the UN Global Compact and UNEP.

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