Thoughts from the Field

In 2010 the International Standards Organization (ISO), the world’s largest and most reputable developer of international standards published ISO 26000, a comprehensive set of guidelines focused on the principles of social responsibility. The document analyzes core subjects relevant to social responsibility and how best to integrate them into an organization effectively. The release of these guidelines adds to the growing focus on social responsibility that continues to emanate from business and industry sectors globally.

In its press release to announce the launching of ISO 26000, ISO’s Social Responsibility Working Group, which was responsible for the development of the guidelines over the last 8 years, stated that “the perception and reality of an organization's performance on social responsibility can influence, among other things, competitive advantage.”

Furthermore, when an organization as important and influential as ISO releases guidelines which actively endorse and intend to provide clarity for the emerging trends such as consensus-based sustainability reporting, then surely social responsibility/sustainability is something that is eventually going to catch the attention of every organization.  It is yet another signal that corporate sustainability is moving toward the mainstream rather than strictly residing among those businesses with a sustainable product, mission, or an innate sensitivity toward environmental and social issues!

Already, energy efficiency and carbon emissions reduction targets are becoming a very effective way for businesses to reduce production and operations costs. So too is active management of material consumption, water use, and waste generation. The ISO 26000 ‘endorsement’ of socially responsible/sustainable practice across the entire production model is likely to result in social responsibility being further recognized as an area for proactive and profitable business management!

ISO 26000 and GRI- Where is the overlap?

ISO 26000 identifies eight general principals of social responsibility which highlight the importance of accountability, transparency, and ethical behavior, as well as respect for stakeholder’s interest, the rule of law, international norms of behavior, and human rights.  The following seven core social responsibility subjects are analyzed in detail:

• Organizational Governance
• Human rights
• Labor practices
• The environment
• Fair operating practices
• Consumer issues
• Community involvement and development

Later the guidelines discuss how to integrate social responsibility/sustainability into an organization and provides recommendations on how to communicate these topics to various stakeholders including employees, managers, customers, suppliers, and other interested parties.

Ironically, the Global Reporting initiative (GRI) has been supporting organizations in this process since the release of its very first set of sustainability reporting guidelines in 2000. According to a recent GRI press release, ‘the 2010 figures indicate an increase of 22 percent in the number of reports worldwide registered on the GRI Reports List, rising from 1491 in 2009 to 1818 in 2010.” As the most widely recognized standard for sustainability reporting, organizations which implement the framework will produce a comprehensive sustainability report designed to be fully transparent and satisfying the needs of stakeholders. A series of GRI profile numbers and performance indicators addressed in the contents of the sustainability report will determine the level of transparency which an organization is reporting at. The more indicators included and correctly addressed, the higher the “application” level of the report.

The ultimate aim of the GRI framework is to improve the transparency of sustainability reportingthrough voluntary disclosure of sustainable activities and performance data. The GRI reporting guidelines identify six categories which all reports should ultimately address:

• Economic
• Environmental
• Product responsibility
• Labor practices
• Human rights
• Society

GRI performance indicators are organized under each of these six categories in ‘Aspects.’ The more indicators the organization reports under each aspect, the greater the level of disclosure attained. Organizations find that, by going through the process of selecting the indicators and gathering the data for the GRI report, they can begin to formulate an overarching corporate sustainability strategy, and in turn, begin tracking and establishing  goals for performance.

So then, what exactly is the relationship between ISO 26000 and the GRI framework?

An examination of the overlap between the six GRI categories and the seven core social responsibility subjects defined in ISO 26000 illustrates the synergy between the topics covered by the two programs:

From the figure above, we can see that there is a one-to-one match for nearly all of the topics covered between ISO 26000 and the GRI framework.  The two exceptions are noted in yellow (where we see that ISO’s “Fair Operating Practices” covers topics which are broken down into four more specific social categories by the GRI), and in red (where we see that GRI includes an explicit “Economic” category, which ISO does not directly address but is implied as influencing all categories of social responsibility).

While ISO 26000 provides a set of topics to consider when developing a corporate sustainability program, the GRI framework takes it a step further by providing companies with specific, quantitative performance indicators to make their sustainability program transparent, comparable, and consistent with emerging performance standards.

As the field of sustainability becomes more sophisticated, there has been a shift in awareness from looking at a company’s immediate environmental footprint, to investigating the often much wider impacts of its global supply chain.

This is particularly true for the world of electronics. Electronic products are now ubiquitous in modern life and business. However, understanding the wider environmental and other sustainability-relevant impacts that electronics have is not so simple. Individual electronics products can contain hundreds of parts, with many of these parts manufactured in developing countries. The supply chains for these products can stretch across tens, hundreds, or even thousands of vendors, presenting numerous risks to the end manufacturer whose name is featured prominently on the label that is seen by the consumer. If any one of these vendors violates laws or operates in a way that is perceived as deleterious to society or the environment, then the reputation of the whole network of suppliers and customers is at risk.

Exploring the web of the electronics supply chain reveals examples of these practices that deeply challenge the pursuit of sustainability:

• Workers subject to unfair labor practices,
• Uncontrolled environmental exposures that endanger people, communities or ecosystems,
• Sourcing of raw materials from regions of the world embroiled in conflict,

How can companies get a handle on these risks? What proactive steps can they take to assess the security and sustainability of their supply chains? This is where external frameworks such as that of the Global Reporting Initiative (GRI), or the Electronic Industry Citizenship Coalition (EICC) are particularly useful. The EICC is a membership-based organization that promotes a common code of conduct aimed at improving working and environmental standards across the industry. It sets standards in:

• Labor,
• Health & Safety,
• Environment, Management Systems, and
• Ethics,

It also encourages its members to actively enlist each of their supply chains in the EICC framework as well. Member companies are subject to rigorous audits to ensure compliance with its strict guidelines, and members then work their own vendors to help them adopt the same standards. Some of the world’s leading electronics, communications, and other technology-focused corporations have joined the EICC and have used this framework to begin making strides toward improving their sustainable performance.

The framework of the EICC and that of the Global Reporting Initiative are highly complementary. The EICC is focused on raising sustainable production standards in the electronic industry, while GRI increases the level of transparency in sustainability reporting across all industries. By finding the synergies between EICC and GRI, companies in this sector can efficiently address risk while positioning themselves at the forefront of sustainable corporate practice.