ISO 26000 Social Responsibility Guidance May Offer Supply Chain Opportunities to Small-Mid Sized Manufacturing

Amid the pre- and post-election haze here in the U.S and the taking of the World Series by the San Francisco Giants (first since 1954), comes ISO 26000, Guidance on Social Responsibility. This guidance document from the International Organization for Standardization (ISO) integrates international expertise on social responsibility (SR), detailing what it means, what issues organizations need to address to operate in a socially responsible manner, and what the best practices are for implementing SR effectively and efficiently. ISO 26000 is designed to assist public and private organizations, and Small to Mid-sized Enterprises (SME) in particular by establishing common guidance on social responsibility concepts, definitions,and methods of evaluation.

The core areas of ISO 26000 (see Figure 1, courtesy of http://www.desarrollohumanosostenible.org) address potentially contentious and volatile issues such as human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement and development.   According to the ISO, ISO 26000 provides guidance for all types of organization, regardless of their size or location, on:

1. Concepts, terms and definitions related to social responsibility
2. Background, trends and characteristics of social responsibility
3. Principles and practices relating to social responsibility
4. Core subjects and issues of social responsibility
5. Integrating, implementing and promoting socially responsible behavior throughout the organization and, through its policies and practices, within its sphere of influence
6. Identifying and engaging with stakeholders
7. Communicating commitments, performance and other information related to social responsibility.

ISO 26000 is unique, not because it’s taken six years to get it finalized. It’s mainly because it’s a “guidance” and not a certification standard like the more well-known ISO 9001 quality management and 14001 environmental management standards.  That may be part of its weakness.  Most skeptics believe that ISO 26000 will not be the “magic bullet” which suddenly replaces all corporate social responsibility (CSR) initiatives in the Supply Chain. While the guidance is not a certifiable standard, it attempts to harmonize itself with UN Global Compact guidelines for ethical business practices and a number of existing practices, principles and guidelines devoted to social responsibility, like the Global Reporting Initiative (see recent crosswalk). Other recent studies (admittedly a very small survey group of less than 60 entities) by the International Institute for Sustainable Development (IISD) prior to the final release established that ISO 26000 may increase awareness, provide definitions and add legitimacy to the social responsibility debate.  However, as stand-alone guidance, ISO 26000 may not contain the practical guidance to enable SMEs to turn theory in practice.

Another recent post by Business for Social Responsibility, entitled “ISO 26000 Approved for Publication. Now What?” while not holding out great hopes for ISO 26000 stated that the guidance:  “… has the potential to increase the adoption of responsible business practices by all types and sizes of organization around the world—not just corporate entities. In bringing social responsibility to all entities, it may be a useful guide for engaging your supply chain in social responsibility issues. ISO 26000 can provide a first point of call for companies to understand the concepts and implementation tools for a social responsibility program, such as advocating stakeholder engagement and issues assessment methods to define priorities.”

In fact, doing a cursory review of the Final Draft International Standard published in July found many references to supply chain management issues, especially in the areas of “environment” and “fair operating practices”.  I believe that innovative,leading SME’s can successfully apply some of these guidance materials in a productive and cost effective manner.  Doing so begins to institutionalize “triple bottom line” thinking into their supply chain practices.

Turning Theory into Practice- Tips for Supply Chain Integration

Environment

1. Practice life-cycle management – consider all the steps of a manufacturing process, and all the links in the supply chain and value chain right to the end of a product’s life and how it is disposed of;
2. Seek way to integrate sustainable resource use and management to make manufacturing steps as environmentally friendly as possible (especially with regard to electricity, fuels, raw and processed materials, land and water);
3. Test innovative technologies as a way to reduce the product environmental footprint

Fair Operating Practices

Promote social responsibility throughout the supply chain; and stimulate demand for socially responsible goods and services:

1. In procurement and purchasing decisions, use criteria that select ethically and socially responsible products and companies;
2. Examine your value chain/supply chain and be sure that you are paying enough to enable your suppliers to fulfill their own responsibilities;
3. Promote broader adoption of social responsibility through networks of manufacturing associations and business sector colleagues;
4. Seek business to business and peer network support to collaboratively develop best methods and approaches, leverage resources and document benefits
5. Treat suppliers and customers/consumers fairly and equitably.

Like my recent posts discussing the supply chain benefits of two other draft sustainability and green product specification standards (ULE 880 and GS-C1), large to small organizations can strive to be ISO 26000-compliant, stay ahead of the curve and grab the “leader” advantage.  Or conversely, companies can risk being a “laggard” and lose vital business opportunities.

Large corporations are realizing the importance accountability, transparency, ethical conduct, and respect for stakeholders’ interests, human rights, rule of law, and international norms of behavior in managing internal and external stakeholder expectations.  Why not apply the same principles wholistically through ones supply/value chain at the SME level?

If you are an owner/operator of a SME, think about your values and principles of operation.  Believe me when I say that doing good can also mean doing well.