ISO 26000 Encourages Corporate Social Responsibility
Not all organisations recognize the importance of corporate social responsibility. Factors like industry, geographic location, and government regulation can influence a company’s motivation to “do the right thing.” To address this, the International Organisation for Standardization introduced the ISO 26000 standard to help steer organizations in a more socially responsible direction.
In this post, I look at:
- The basics of corporate social responsibility
- What the ISO 26000 standard is
- How ISO 26000 differs from other ISO standards
- Objectives of ISO 26000
- How ISO 26000 can help organisations improve their CSR
- The 7 key principles of ISO 26000
- The 7 core subjects of ISO 26000
- How to get started with ISO 26000
- How to report your corporate social responsibility
Basics of Corporate Social Responsibility
Corporate social responsibility (CSR) is a broad topic. It covers almost anything a company does to promote sustainability – the idea that an organisation’s actions should not be destructive.
CSR encourages accountability and good corporate citizenship. This includes the adoption of reasonable business practices which help sustain (rather than disrupt) the delicate balance of people, planet, and profit – the so-called 3BL, or triple bottom line. In essence, organisations must consider their impacts on society and the environment to ensure their long-term economic viability. One way they can do this is by following standards of sustainability, like the ISO 26000 framework.
Why corporate social responsibility matters
- 75% of consumers are likely to take negative action against companies that behave irresponsibly. This can range from posting on social media to organizing boycotts.
- Companies that are perceived as irresponsible stand to lose as much as 39% of their potential customer base. One in four consumers will tell their friends and family to avoid companies they view as irresponsible.
- 83% of professional investors say they are more likely to invest in companies known for their social responsibility. Businesses that embrace CSR initiatives tend to be more transparent and honest overall, which makes them a lower–risk investment.
- Only 41% of American consumers believe that American companies, when taken as a whole, are socially responsible.
- Launched in 2017, the Climate Action 100+ investor initiative garnered immediate worldwide attention. Its goal is to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. Since its creation, more than 545 investors managing more than $52 trillion in assets have signed on.
- In January 2020, private equity giant BlackRock announced that it will avoid investments in companies with high sustainability-related risk.
The Direct Impacts of Corporate Social Responsibility
- Secure or maintain a competitive advantage
- Protect its reputation/brand image
- Attract and retain workers, members, customers, clients, or users
- Keep employees loyal, committed, and productive
- Attract investors, owners, donors, sponsors, and the financial community
- Build productive relationships with governments, media, suppliers, peers, customers, and local communities
Find out how Borealis stakeholder engagement software can improve your reporting on corporate social responsibility and all other stakeholder engagement activities.
What is ISO 26000?
ISO 26000 is an international standard developed to help organisations assess and address their social responsibilities. The most recent version of the standard, ISO 26000:2010, was last reviewed and confirmed in 2017.
More than 80 countries have since adopted ISO 26000:2010 as a national standard. These include the U.S., the U.K., Canada, Germany, and France as well as many developing countries. Thousands of companies and organisations around the world use the standard, including global brands like Coca Cola and Starbucks.
How ISO 26000 differs from other ISO standards
1. IS0 26000 is voluntary.
Unlike other ISO standards, ISO 26000 is not intended to be used for certification or regulation. Since it does not contain requirements, it cannot serve as a basis for audits, conformity tests, or other compliance statements. Instead, it provides recommendations to help organisations improve aspects of corporate social responsibility. It encourages companies to go beyond legal standards of compliance to contribute to sustainable development.
2. IS0 26000 applies to ANY organisation.
ISO 26000 is intended to help all types of organisations in the public, private, and non-profit sectors. The core subjects address issues that are relevant to every organisation, regardless of size or location. They are meant to be adapted to any industry including energy, transportation, manufacturing, retail, and food. While early adopters of the standard were often multinational corporations, ISO 26000 was designed with the flexibility to be used by other types of organisations too, such as hospitals, schools, and not-for-profit charities.
3. ISO 26000 was built by consensus.
ISO 26000 was developed over a series of meetings and ongoing consultations that took place between 2005 and 2010. Approximately five hundred delegates representing six main stakeholder groups actively participated in the process. These representatives came from Industry, Government, NGO (non-governmental organisations), Labour, Consumer, and SSRO (Service, Support, Research and Others – primarily academics and consultants).
The various groups and committees included participants from both „developing“ and „developed“ countries to present different economic and cultural perspectives. The final standard was the result of much deliberation and negotiation. This ensured that it addressed the goals and concerns of all stakeholder groups and that its guidance would be usable by all types of organisations and in any country.
Objectives of ISO 26000
The main goal of ISO 26000 is to support sustainable development by encouraging organisations to practice socially responsible behaviour. Of course, what constitutes “socially responsible corporate behaviour” remains a subject of debate.
ISO 26000 attempts to establish an acceptable middle ground between excessive legislation and total freedom from regulation. Ultimately, the recommended approach invites organisations to hold themselves accountable without restricting their ability to operate. This flexible framework can be especially appealing to corporations that need to demonstrate responsibility to gain social license to operate, but whose mission may not emphasize sustainable development.
How ISO 26000 Can Help Organisations Improve Their CSR
ISO 26000 offers organisations and corporations actionable guidance to:
- Address social responsibility in a way that respects cultural, societal, environmental, legal, and economic differences
- Implement the principles of social responsibility
- Identify and communicate with stakeholders for more reliable, credible social responsibility reporting
- Prioritize business performance, including the principles of continuous improvement
- Increase customer and stakeholder satisfaction
- Integrate and supplement existing ISO standards, government regulations, and international conventions
- Increase general awareness of their social responsibility initiatives
The 7 key principles of ISO 26000
ISO 26000 outlines seven key principles, which it views as the roots of socially responsible behaviour:
- Ethical behaviour
- Respect for stakeholder interests
- Respect for the rule of law
- Respect for international norms of behaviour
- Respect for human rights
ISO 26000 also identifies 7 core subjects of social responsibility. Each subject covers a variety of issues that need to be addressed.
1. Organisational Governance
ISO 26000 encourages organisations to consider accountability, transparency, and ethics in their decision-making process and governing practices. Specifically, this includes formal and informal processes as well as the organisation’s norms and values. ISO offers guidance to help companies establish processes, systems, and other mechanisms to hold themselves accountable.
2. Human Rights
Human rights are the universal freedoms that apply to all human beings, regardless of race, gender, language, religion, national origin, or other status. These rights are based on the principle of respect for the individual and aim to protect people from abuse, discrimination, and exploitation.
ISO 26000 provides guidance for companies to support human rights, particularly by:
- Allowing free organisation and collective negotiation
- Providing equal employment opportunities
- Preventing all forms of discrimination
- Resolving grievances
- Seeking ways to prevent or mitigate adverse human rights impacts, including child labour
3. Labour Practices
An organisation’s labour practices must be consistent with its policies. This applies to an organisation’s employees, but also to any work done on its behalf, such as subcontracted work. Responsible labour practices should address:
- Employment and contractual relationships
- Working conditions and social protection
- Social dialogue
- Health and safety at work
- Human development and training in the workplace
4. The Environment
No matter where an organisation is located, its decisions and activities will inevitably have an impact on the environment. This may include the use of resources, generation of pollution and waste, and damage to natural habitats.
ISO 26000 urges organisations to minimize their environmental impacts and ensure that their resource consumption is sustainable. They are encouraged to adopt a holistic approach that considers the direct and indirect socio-economic, health, and environmental effects of their activities.
Among other things, organisations are urged to embrace initiatives to:
- Prevent pollution
- Use resources sustainably
- Mitigate and adapt to climate change
- Protect the environment, biodiversity, and the restoration of natural habitats
5. Fair Operating Practices
Fair operating practices address the way an organisation interacts with others. ISO 26000 calls for organisations to deal ethically with customers, partners, suppliers, contractors, competitors, and government agencies to bring about positive results.
Fair operating practices include:
- Preventing corruption
- Responsible political involvement
- Fair competition
- Promoting social responsibility in the value chain
- Respecting property rights
6. Consumer Issues
Organisations that provide products and services have certain responsibilities to consumers. ISO 26000 encourages companies to promote fair and sustainable economic and social development. A responsible approach to consumer issues includes:
- Fair marketing practices
- Protection of health and safety
- Sustainable consumption
- Consumer education
- Dispute resolution
- Data and privacy protection
- Upholding fair use
- Ensuring that essential products and services are available to everyone, including vulnerable or disadvantaged groups
7. Community Involvement and Development
All organisations have an impact on the communities where they operate, and their active participation can help ensure the well-being of these communities. In fact, community involvement and development are two of the most important ways organisations can contribute to a more sustainable society.
ISO 26000 offers guidance on:
- Active community involvement
- Support for civil institutions
- Promotion of education and culture
- Job creation and skills development
- Technology development and access
- Income and wealth creation
- Health promotion
- Social investment
How to get started with ISO 26000
Paper documents and PDF files of ISO 26000:2010, the most current version of the standard, can be purchased online, including directly from the ISO website at iso.org/standard/42546.html.
Corporate Social Responsibility Reporting
The behaviour of consumers, investors and other key stakeholders is often influenced by their perception of an organisation’s social responsibility. Organisations therefore need to take the necessary steps to manage this perception accordingly.
In another blog, I discussed the importance of corporate sustainability reporting, which encompasses the realm of corporate social responsibility. In that article we saw that most organisations fail to report their CSR efforts in a meaningful, credible manner – even organisations with dedicated CSR departments.
The main cause of poor reporting is a lack of quality data. More often than not, this problem can be easily resolved by implementing a dedicated social and environmental performance system. Fit-for-purpose tools can help organisations standardise data collection in a reliable, transparent manner. This valuable data is centralized in a single location where it is easily accessible to anyone with access rights.
The more advanced social and environmental performance systems out there, like Borealis stakeholder engagement software, go even further. They offer powerful analytics and reporting features to help organisations derive meaning from their data and generate reports tailored to stakeholder interests.
Improving Corporate Social Responsibility
It is possible to make great strides with corporate social responsibility even without implementing the ISO 26000 standard. In most cases, organisations can begin by examining how they might integrate CSR initiatives into existing systems, policies, and structures.
The following 7 steps offer a rough roadmap for integrating CSR into an organisation:
- Consider the Organisation’s DNA
Assess the basic nature of the organisation. This includes its mission, values, principles, code of conduct, internal and external stakeholders, and value chain, among other things.
- Evaluate the Organisation’s Current Approach
Look at how the organisation currently manages accountability. Assess the relevance of the different CSR subjects and their potential impacts on the organisation. Prioritise them according to existing requirements, objectives, and resources.
- Implement Basic Practices to Integrate CSR Throughout the Organisation
Explore opportunities to raise awareness and develop competencies regarding corporate social responsibility. Determine what steps the organisation should take to integrate CSR into its governance, systems, and procedures.
- Communicate Your CSR Efforts
Determine the strategic purpose of communicating social responsibility, and which forms of communication to use. Ensure the information to be shared is accurate, complete, understandable, responsible, and timely.
- Improve Your Credibility in Relation to Corporate Social Responsibility
Explore opportunities to manage stakeholder issues and grievances more effectively. Consider how you can communicate these improvements in a way that improves public perceptions about the organisation’s responsibility.
- Review and Improve CSR Practices on an Ongoing Basis
After you integrate CSR initiatives into your practices and can credibly demonstrate their impacts, focus on improving your overall CSR performance. Implement processes to monitor your CSR activities, track your progress, and measure outcomes of individual initiatives. Look for ways to improve data collection and management in order to derive more meaning from this information. Fit-for-purpose software often includes Analytics tools to help you draw clear insights from your data and inform your strategic decisions.
- Implement Voluntary CSR initiatives
When you have solid CSR practices in place and can report your efforts in a meaningful, credible manner, look for ways to turn CSR into a strategic advantage to grow your organisation.
Get Help from the CSR Experts
Since 2004, Borealis has been helping organisations around the world improve their performance in corporate social responsibility. Find out how our vast expertise and powerful stakeholder engagement software can help make CSR a strategic advantage for your organisation. Talk to an expert >