The New Guidelines on Social Responsibility Standard ISO 26000as per October 2007

Einar Flydalsenior adviser, Telenor R&I, chair of Norwegian committee on ISO26000

A standard on responsibility?

• Standards - Why?• What is ”social responsibility”?• Why such a crazy and ambitious task as a ”responsibility

standard”?• Why ISO, and what kind of standard?• For whom?• The process of work, and where we are, and who• Main topics in ISO 26000• Probable outcomes related to Green Branding• Essential green matters that will not be treated, but need

attention

Standards – why?• Traditionally: technical details

and interfaces• Since the steam engine and

electricity: Axellerated growth with regard to technological, organisational and market complexity

• The development of laws and regulations often lag behind

• In practice, the responsibility for safety, relevance to purpose, and consequences for social, political, economical, environmental sustainability has been left to the agents themselves

• Standards are tools to adress this problem

• Standards may be more or less mandatory – advice <> law

• Standards are tools to make larger markets and more complex products possible

An example: Telenor’s mobile communications – unthinkable without standardization

500.000 Points of sale 64.000 base stations

123 million customers13 countries

300 mill conversations / day

100.000 new customers/day

Why such a crazy and ambitious task as a ”responsibility standard”? • Standardization is a tool for making things happen

• Standards create compatibility• ”If you don’t have common concepts, you can’t co-operate!”• i.e. design tools in an ever more complex world

• Standards are guides and tools to achieve practical goals• ”If you can’t measure, you can’t manage!”

• Standards create level playing fields, enlarge markets, and extend influence, i.e. tools in wellfare, modernization and globalization

By the way, what is Social Responsibility?

duties according to local laws

expectations according to ”good morality and ethics”

business adressing basic needs

charity

international conventions

demands for environmental, social, political sustainability

Where does SR

start or

end?

Working definition p.t. in ISO26000:

”Social responsibility concerns the behaviour of an organisation with respect to its impact on others and on the natural environment. As with the broader concept of responsibility, the social responsibility of organizations involves being held accountable for actions and decisions. Because it involves willingness by an organisation to be held accountable for actions over which it has control, it is an intrinsically moral or ethical concept requiring an acceptance that there is right and wrong. The actions that constitute social responsibility include the decision to refrain from a specific activity where that is considered the right thing to do.”

A hierarchy of SR

Globalization has created the need - and needs standardization• Globalization, de-regulation, neo-liberalism, increased FDI, and the global

ICT and financial grids have created a turbulent and confusing development that set (Corporate) Social Responsibility on the political agenda:

• increased wellfare for many, • unequal exchange and exploitation, • extreme wealth creation in the hands of few, • environmental problems / climate change,• corruption and nepotism colliding with level playing field and public service man ethics, • the cultural collisions inherent in modernization and increased communication.

• The antagonism / division of work between neo-liberlist thinking and social responsibility in this framework creates an arena for continous political strife (Seattle, Genéve, Göteborg, 9/11, etc...)

• States have lost power. The UN appeals to private enterprise for help.A standard is a way of establishing new norms – acceptable to private enterprise.

Adam Smith (1723-1790)Adam Smith (1723-1790)

”The business of business is business and nothing but business...”

Free-market competition is the optimal method for

maximizing wellfare!

Milton Friedman (1912-2006)

Why ISO? What kind of standard?• Many (C)SR norms, indices, declarations, etc around• ISO’s international position is unique as a UN body of reach.• ISO is in position to establish a universally accepted system

standard• System standards describe how to build the organisation’s

management and operational systems:• ISO 9000-series - standards for quality management systems:

• procedures that cover all key processes in the business:• monitoring processes; • keeping adequate records; • checking output, with appropriate corrective action; • regularly reviewing processes and the quality system itself for effectiveness; • facilitating continual improvement

• Certification that consistent business processes have been built into the manament and operations system.

• ISO 14000-series - how to organize to reduce negative impact on environment• ISO’s contribution to 1992 Earth Summit in Rio de Janeiro (United Nations Conference

on Environment and Development (UNCED))

A system standard, but advisory only

• ISO 26000 will be a system standard, but will not be a management system standard

• ISO 26000 will provide background, definitions, recommendations / advice as to how to behave, what measures to take, what to take into consideration, what to conform to, i.a. advice as to what to implement in the management system to be socially responsible

• ISO 26000 will not be a certification standard:• There will be no such thing as an ”ISO 26000 certification”

For whom? Universally applicable• Business organisations

• from SMEs to large corporations• Governmental organisations

• e.g. public administration• Non-governmental

organisations (NGOs)• e.g. relief organisations

• i.e. all kinds of (modern and formal) organisations

• Globally applicable, i.e. all countries, but not part of law

In practice (my guess):• A practical tool for SMEs• A branding / marketing tool for

commercial enterprises• A political lever for stakeholder

groups (consumerists and other activists)

• A cost to be internalized in the daily operations

• A framework for consultants to build indicators / indexes and benchmarking tools

The process and where we are• Tedious work, thousands involved• Lots of large meetings and

committees• Slowly convergence of views,

concepts and wordings

WD(Preparatory)

CD (Committee)

DIS (Enquiry)

FDISprocess

NWIP(Proposal)

ISO 26000Publication

International Standard SR

Oct 2004-

Jan 2005

We are here, working on

Working Draft version 3

NP New Work Item ProposalWD Working DraftCD Committee DraftDIS Draft International StandardFDIS Final DISISO ISO Standard

When the expert Task Groups agree

Mar 2005 (2. Meeting),

-Nov 2007

(5th meeting)

Nov 2007-

Jan 2008

Dec 2008-

Apr 2008

Sept 2009-

Oct. 2009 Approaval

Nov. 2009

Delay 6-12 months?

Norwegian ISO 26000 Mirror Committee Members (abridged list)• Arbeidstilsynet• Barne- og likestillingsdepartementet, BLD• Bedriftsøkonomisk institutt, BI• Finansnæringens hovedorganisasjon, FNH• Forbrukerombudet• Forbrukerrådet• Fringilla AS• Handels- og serviceorganisasjonenes hovedorganisasjon, HSH• Hydro• Høgskolen i Hedmark• Initiativ for etisk handel• Iris Research• KPMG• KS bedrift• NORAD• Næringslivets hovedorganisasjon, NHO• Peterson AS• Roll-Royce Marine• Statens Institutt for forbruksforskning, SIFO• StatoilHydro• Storebrand• Utenriksdepartementet, UD• UNIL• Veritas

Experts and delegates:• Government• NGOs• Business• Consultants,

research, standards institutes

Main topics in ISO 26000 (Working Draft 3)

• Chapter 1: Scope (area of relevance / reach)• Chapter 2: Normative references• Chapter 3: Terms and definitions• Chapter 4: Social responsibility in context

• history, trends, concept, practice, the importance of stakeholders involvement

• Chapter 5: Principles of social responsibility• legal compliance, respect for internationally recognized instruments,

stakeholders and their concerns (incl. consumers, employees, local interest groups), accountability, transparency, sustainable development, ethical conduct, precautionary approach, fundamental human rights, diversity

• Chapter 6: Guidance on core topics / principles• Chapter 7: Guidance for an organization on implementing social

responsibility• No prescriptions or demands, but advice• Flexible approach: more or less may be adopted; SR-implementation may be

more or less detailed in the management system, ...• Key words: sustainability, transparency, stakeholders, ethics, responsibility

up/down value chains, management systems and processes, relations to/communications with stakeholders

Main topics related to Green Branding

• Chapter 1: Scope (area of relevance / reach)• Chapter 2: Normative references• Chapter 3: Terms and definitions• Chapter 4: Social responsibility in context

• history, trends, concept, practice, the importance of stakeholders involvement

• Chapter 5: Principles of social responsibility• legal compliance, respect for internationally recognized instruments,

stakeholders and their concerns (incl. consumers, employees, local interest groups), accountability, transparency, sustainable development, ethical conduct, precautionary approach, fundamental human rights, diversity

• Chapter 6: Guidance on core topics / principles• Chapter 7: Guidance for an organization on implementing social

responsibility• No prescriptions or demands, but advice• Flexible approach: more or less may be adopted; SR-implementation may be

more or less detailed in the management system, ...• Key words: sustainability, transparency, stakeholders, ethics, responsibility

up/down value chains, management systems and processes, relations to/communications with stakeholders

Challenges to organisations, and to Green Branding in particular

• All kinds of organisations may be confronted with the ISO26000 advices• in media, it is hard to argue that ISO 26000 is not mandatory

• Increased awareness / importance attached to• reputation management• ethics

• Private enterprise might have to revise its perceptions as to relevant stakeholders:

• owners and customers• partners• society at local and higher levels• everybody concerned• even impersonal stakeholders: animals, nature, technologies, business models?• Stakeholders’ rights to be heard and get response will be strengthened

• Organisations will be held more responsible as to both direct and indirect effects of their activities, to the extent they are in control, evt could abstain

• Moral demands and international conventions will be underpinned by an ISO standard, even if not part of local law

• Principle of precautionary approach (Føre-var-prinsippet) will be strengthened • ”Polluter-pays”-principle will be strengthened• Demand for LCA (Life cycle assessments) as a basis for products will be

strengthened• Responsibility along production chain (value chain) will be strengthened

Essential green matters that will not be treated

• Largely speaking, green measures are about efficiency gains (”Factor 4” or ”Factor 10”), i.e. producing using less energy, resources, etc.

• The potential for such increased energy and resource efficiency is high

• Hence, higher efficiency is fine, is important, and much can be achieved

• Increased responsibility along the value chain is a adequate tool for this

• However, 2. and 3. order effects of products may lead to increased production

• Sometimes: Indirect resource use > direct resource use

• Such effects will be outside the scope of ISO 26000. It will need some kind of strategy, which is more far reaching and complicated, but urgent.

• Example from ICT sector follows

The upside: ICT solutions with factor 1000+

• ”Virtualization”, ”decoupling”, ”de-materialization” are the hype words since the 1990-ies

• ICT has been expected to be the tool for this

= 9 km by car, or production of 1,5 kg newspaper

Factor 1000+?

Lockheed Martin Pole CatSneak photo 19.07.06 of prototype

Next-to-Beaming:• remote copying• remote production-

on-demand

• To be used by US Air Force for long distance operations

• wing span: 28 m• weight: 4,5 tonnes • 90% printed on a composit

printer!Factor = high

The downside: It does not seem to help!

Global paper production

• ICT does not replace: Efficiency gains are harvested in relative, not absolute terms!

• Basic knowledge: Efficiency gains are quickly absorbed by increased activity if not quickly harvested

• ICT and traditional activities re-inforce each other

20092008200720062005200420032002200120001999

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Hardware Software ServicesCommunications Total ICT

Global ICT Spending 1999-2009 ($US Trillions)

Digital Planet 2006

EU Whitebook 2001

• mail > email• paper advertising

> advertising on the net

• newspapers > news sites

• music discs > CDs (10 Giga/year) > MP3 downloading

• books > ebooks• archives > databases• libraries

> net resources (55 Giga docs, up 7,3 mill web pages/day!)

• atlases > GoogleEarth

• film rolls > streaming

Telcos are no exception: higher energy efficiency, more people served,but also increased total consumption

Relative decrease, absolute increase

0

500

1000

1500

2000

2500

2003 2004 2005

GWh total

GWh per 100 mill subscriptions

einar.flydal@telenor.com

This is the next challenge!

We faxpizzas, limited

offer!

Topics for discussion

• In your view, what is the “greenest” policy: • 1) selling a higher proportion of environmentally friendly products,

OR • 2) selling less consumption of the product (i.e. encourage

consumers to buy only what they can efficiently use)? • Why do you believe this?

• How might it be possible for a brand to profitably benefit from associating itself with lower consumption themes such as:• Is this purchase really necessary?• Have you (the consumer) done everything reasonable to extend the

product’s life?• In your industry,

• What percentage of consumers are willing to make substantial sacrifices in their lifestyles in order to be “green” (i.e. willing to pay higher prices, willing to have less convenience, willing to have lower quality, etc.)?

• Assuming that these “green” disadvantages cannot be eliminated in the short-term, what factors might make this portion higher?