This series of blog posts looks at the new ISO 26000 standard for corporate social responsibility. In five parts, it summarizes the report,How Material is ISO 26000 Social Responsibility to Small and Medium-sized Enterprises (SMEs)?, written by Oshani Perera in Sept, 2008.
PART I – THE STUDY TO MEASURE THE MATERIALITY OF ISO 26000
ISO, the International Organization for Standardization, has decided to launch the development of an International Standard providing guidelines for social responsibility (SR) named ISO 26000, or simply ISO SR, and is expected to be released in 2010. The standard offers guidance on socially responsible behavior and possible actions; it does NOT contain requirements and therefore, in contrast to other ISO management system standards, is not certifiable.
Perera’s project maps the materiality of the ISO 26000 Social Responsibility to small and medium-sized enterprises (SMEs) through a global survey of 59 SMEs, 37 social responsibility consultants, and 16 National Cleaner Production Centers across the world. It was commissioned by the Swiss State Secretariat for Economic Affairs (SECO) for the International Institute for Sustainable Development (IISD) to further investigate the underlying reasons why SMEs continue to be missing from the sustainable development agenda, and if and how the ISO 26000 could serve as a catalyst for their greater participation.
SMEs are widely viewed as a challenge in the sustainable development debate. They are seen as standing at its periphery and to be general unconcerned by environmental and social issues—even those inherent to their own businesses. Further, they work in markets affected by a global pattern of supply and demand, which are rendered even more complex by the intervention of governments and skewed trade regulations that favor larger players and special interests. And finally, SMEs also face challenges in getting access to markets in which economies of scale are needed to drive down production and distribution costs, while meeting just-in-time deadlines. Being at the lower end of supply chains, most SMEs have to bear the risks associated with just-in-time delivery, low or no inventories, low lead times, and rising prices of raw and semi-processed materials.
IISD embarked on this project with the understanding that while ISO 26000 may increase awareness, provide definition, and add legitimacy to the social responsibility debate, it may not contain the practical guidance to enable SMEs to implement theory in practice. SMEs are also likely to require external expertise to interpret and implement ISO 26000 in a manner that is best suited to their business context. This inherently presents additional costs that small organizations may find difficult to justify.
IISD suggests proponents of sustainable enterprise may need to first rethink and repackage the agenda to reflect the realities of the global marketplace – in order to facilitate the widespread participation of SMEs. For instance, there is a tendency to consider SMEs as a homogenous group, when in fact they encompass a wide variety of businesses, which have very different reasons for why, how, and how long they seek to be in businesses. In addition, large areas of the sustainable development and corporate responsibility agenda continue to be designed in a manner that overlooks the vitality of small firms in making a considerable impact on local competitiveness. Yet, according to the International Chamber of Commerce, SMEs typically account for 99 per cent or more of all firms in both industrialized in emerging economies.
The methodology for this survey is based on a wide cross section of in-person and telephone consultations with SMEs, National Cleaner Production Centers (NCPCs), leaders of the ISO 26000 processes and option leaders in the SME debate.
The next three posts will map the broad findings of the IISD survey on the materiality of ISO 26000 Social Responsibility for SMEs. In particular, they address the opportunities and obstacles in advancing social responsibility in SMEs. Then the fifth and final post in the series addresses ways in which we might “mainstream” social responsibility – to be more inclusive of SMEs into the future.