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Understanding ISO 26000

A Practical Approach to Social Responsibility

Understanding ISO 26000

A Practical Approach to Social Responsibility

Edited by Adrian Henriques

First published in the UK in 2011
by
BSI
389 Chiswick High Road
London W4 4AL

© British Standards Institution 2011

All rights reserved. Except as permitted under the Copyright, Designs and Patents
Act 1988, no part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means – electronic, photocopying,
recording or otherwise – without prior permission in writing from the publisher.

Whilst every care has been taken in developing and compiling this publication, BSI
accepts no liability for any loss or damage caused, arising directly or indirectly in
connection with reliance on its contents except to the extent that such liability
may not be excluded in law.

The rights of Adrian Henriques to be identified as the editor of this Work have
been asserted by him in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.

Typeset in Frutiger by Letterpart Limited, www.letterpart.com

Printed in Great Britain by Berforts Group, www.berforts.co.uk
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library

ISBN 978-0-580-74017-6
Contents

List of abbreviations vi
Acknowledgments viii
Foreword ix
Preface xii
Introduction xvii
Contributors xxix

Part I – ISO 26000 Issues 1

Organizational governance 1
Human rights and social responsibility 9
Labour practices 21
Should we take responsibility for the environment – or for
ourselves? 33
Consumer issues 41
International norms and stakeholder engagement 49
A standard for companies or a standard for communities? 59

Part II – Developing and Implementing ISO 26000 71

Integrating social responsibility into a commercial organization –
experiences at Aggregate Industries UK 71
ISO 26000 implementation – a Brazilian perspective 79

Part III – Cross-Cutting Issues 91

Trade implications of ISO 26000 91
Social responsibility and cultural difference 101
Standards and the state 109
The meaning of ‘sphere of influence’ in ISO 26000 115
ISO 26000 and other standards – the relationship between
ISO 26000, the UN Global Compact and the Global Reporting
Initiative 131
References 151

Understanding ISO 26000 v

List of abbreviations

ABNT Brazilian Technical Standards Association

APEAN Arabian Peninsula Environmental Experts Network
CAG Chairs’ Advisory Group
CEO Chief Executive Officer
CIF Customized Implementation Framework
CNI/SESI National Confederation of Industry (Brazil)
CNIS China National Institute of Standardization
CO2 Carbon Dioxide
CoP Communication on Progress
CO- ISO Consumer Policy Committee
POLCO
CSR Corporate Social Responsibility
ECPAT End Child Prostitution, Child Pornography and Trafficking in
Children for Sexual Purposes
FASE Federation of Social and Educational Assistance Organizations
FDI Foreign Direct Investment
FDIS Final Draft International Standard
GRI Global Reporting Initiative
IFC International Finance Corporation
ILO International Labour Organization
ILO MNE ILO Tripartite Declaration of Principles Concerning
Multinational Enterprises and Social Policy
IPCC Intergovernmental Panel on Climate Change
ISG Industry Stakeholder Group
ISO International Organization for Standardization
ITUC International Trade Union Confederation
LTIFR Lost Time Injury Frequency Rate
MDG Millennium Development Goal
MOU Memorandum of Understanding
NGO Non-governmental organization
NWIP New Work Item Proposal
OECD Organisation for Economic Co-operation and Development
OHCHR Office of the United Nations High Commissioner for Human
Rights

vi Understanding ISO 26000

 List of abbreviations

SAGE Strategic Advisory Group on the Environment

SAI Social Accountability Institute
SIS Swedish Standards Institute
SME Small- and Medium-sized Enterprises
SMO Small- and Medium-sized Organization
SRI Socially Responsible Investment
SRSG Special Representative of the United Nations Secretary
General on Business and Human Rights
SSRO Support, Service, Research, and Other
TBT Technical Barriers to Trade
TMB Technical Management Board
UDHR Universal Declaration of Human Rights
UNCED United Nations Conference on Environment and
Development
UNEP United Nations Environment Programme
UNGPs United Nations Guiding Principles
WCED World Commission on Environment and Development
WGSR ISO Working Group on Social Responsibility
WMO World Meteorological Organization
WSSD World Summit for Sustainable Development
WTO World Trade Organization

Understanding ISO 26000 vii

Acknowledgments

I would like to take this opportunity to thank all of the contributors for
their valuable insights; without them this book really would not have
been possible. It has been both a pleasure and a treat to be able to bring
together so many experts for one piece of work.

Special mentions also go to Wayne Visser, founder of CSR International,

and James Robey, Group CSR & Sustainability Director at CapGemini, for
their thoughts and input along the way.

Adrian Henriques

viii Understanding ISO 26000

Foreword

Shaping a more responsible world

Taking responsibility for our actions – it’s one of the first signs of
maturity in our children. Taking responsibility is sometimes not easy; it
can hurt, and it’s often a frightening prospect. As children develop into
adults, taking responsibility comes with a growing recognition of their
interdependence, and their influence on others.

A multinational company, a local charity, a municipal services department

– any organization – is also susceptible to such growth and maturity. A
mature, responsible organization fully recognizes the impacts of its
decisions and activities on society and the environment. The elements of
this responsibility reflect the expectations of society at a particular point
in time. These expectations are the subject of national, regional and
international public policy and governmental instruments. Over the years,
various state and non-state actors have brought to life many of these
instruments in the form of initiatives, designed to address or improve
aspects of an organization’s social responsibility. However, capturing and
maintaining a comprehensive, authoritative, international expression of
social responsibility necessitates development and decision making that is
highly consultative, transparent, credible and under continual review and
improvement.

In May 2001, International Organization for Standardization (ISO) had its

first discussion of social accountability and responsibility. It was presented
as an idea to ISO’s executive governing body (ISO Council) by the member
from Israel (Ms Ziva Patir, Standards Institute of Israel). And thus began a
journey. At first, the task was limited to evaluating the feasibility of
developing a ‘standard’ on such a complex, broad, far-reaching and
culturally diverse subject. A carefully assembled, multi-stakeholder
Advisory Group was formed under the ISO Technical Management Board
(TMB). At the beginning, opinions and understanding of ‘corporate’
social responsibility varied widely, from those who considered that it was
simply compliance with relevant legislation to others who considered that
it was purely philanthropy.

After 18 months of study the Advisory Group produced its

recommendations, outlining the pros and cons of launching such an
effort in ISO. Its report was presented at an ISO Conference in 2004 in
Stockholm to a broad audience that, at the time, assembled five key
categories of stakeholder: industry, government, consumers, labour and

Understanding ISO 26000 ix

Foreword

non-governmental organizations. The result: ISO should proceed with the

development of an international guidance standard on social
responsibility, but it needed to do so in a deliberate, inclusive and
coherent manner, whilst respecting relevant intergovernmental policies
and instruments, such as those of the International Labour Organization
(ILO).

The success of the 2004 Conference also highlighted the merits of

specifically identifying stakeholder groups and helping them to caucus,
review and formulate their ideas on an issue. Based on the Advisory
Group’s report and the results of the 2004 Conference, the ISO TMB
formulated a plan to develop this important new subject. The TMB
incorporated the above stakeholder category approach and further
defined some key features of this effort, which included the following.

• The standard be drafted by a ‘flat’ ISO Working Group reporting

directly to the TMB, consisted of experts nominated by ISO members
and by international organizations accepted as liaison members. This
would ensure a ‘level playing field’ of multiple stakeholders, all
having equal voices in achieving the group’s consensus.
• The Working Group be led by a so-called ‘twinned’ leadership,
brought together a developed country ISO member and a developing
country member. This responsibility was given to the ISO members of
Sweden (SIS) and Brazil (ABNT).
• The standard to focus on broadening awareness of social
responsibility, provide common terminology on the subject, provide
guidance on integrating social responsibility throughout an
organization and, among other issues, provide guidance on
identifying and engaging with stakeholders.
• The standard to provide only ‘guidance’ (i.e. using the verb ‘should’
throughout without any requirements in the form of ‘shall’), and
that it should not be intended for certification.

And so the new ISO TMB Working Group on Social Responsibility was
born, and held its first meeting in Salvador, Bahia, Brazil in March 2005.
This introductory meeting was difficult – suspicion reigned and emotions
were high. The ‘ISO’ multi-stakeholder consensus building process was
new to many of the stakeholders, and many of the stakeholders were
new to ISO. Even so, and most importantly, the development phase had
officially begun.

What followed was a further seven full working group meetings over a
period of five years, with intensive drafting, debate and decisions among
more than 400 working group experts from 99 countries and 42
international organizations. During the development phase, no fewer
than 62 international, regional and national workshops were held,
involving more than 4,500 developing country stakeholders, to raise
awareness and facilitate their input into the standard. In the end, the ISO
Working Group considered more than 26,000 (ironically) formal

x Understanding ISO 26000

 Foreword

comments on successive versions of the draft standard. In November

2010, ISO 26000 Guidance on social responsibility was published and
launched at an international event in Geneva, Switzerland. National
adoptions and launch events are now in full swing around the world and
the standard continues to attract attention, not only because of its
authoritative and comprehensive social responsibility guidance to
organizations, but also for its innovative approach to global stakeholder
engagement using the ISO development process.

It is also safe to say that the challenges of sustainability and social

responsibility, as well as the impressive development approach used to
develop ISO 26000, have had an influence on the view of ISO members
on the future of the organization. ISO members and key international
stakeholders were consulted on a new Strategic Plan for the organization
for the years 2011–2015. The Plan was approved in September 20101 and
contains a Vision, a Mission and seven Key Objectives that, arguably,
reflect the emerging importance of the elements addressed in ISO 26000.
Specifically, the Plan outlines how ISO must address important global
challenges (e.g. sustainability, climate change, risk management), the
enhancement of developing country involvement (Key Objective 3), and
the need for highly effective stakeholder engagement processes in ISO’s
standardization work (Key Objective 4).

Although ISO 26000 has already made a significant impact in certain

circles, its journey has in fact only just begun. The global marketplace is
just now being exposed to the leading edge thinking of ISO 26000 and
organizations are starting to consider how this important standard can
be used to address success in the long term, while helping to secure a
sustainable world for all. ISO and its members are also becoming fully
engaged in promoting and supporting the implementation of ISO 26000,
and we look forward to receiving feedback on user experiences with the
standard that will help to shape its future evolution.

Kevin McKinley, Deputy Secretary-General, ISO Central Secretariat

Geneva, February 2011

1
See www.iso.org/iso/iso_strategic_plan_2011-2015.pdf

Understanding ISO 26000 xi

Preface

Social responsibility: from dreams to reality

Standardization as a systemic activity, as we know it today, received its
strongest thrust through the rapid growth of technology, caused by the
technical and scientific discoveries that took place in the eighteenth and
nineteenth centuries. With the progress that took place from the steam
engine days, which enabled mass production, there came the need to
mass produce articles instead of painfully manufacturing each and every
nut and bolt by hand. So, in around 1840 Sir Joseph Whitworth
established a thread for each standardized nut, which to this day bears
his name.

Immediately after the war the companies with the mission to rebuild
Europe observed great differences in the measurement of units and
standards (the metre and the yard, the kilogram and the pound). These
divergences made production more complicated and impaired the
exchange of manufactured products between the Americans and Asian
and European countries. For these reasons, on 23 February 1947 the
International Organization for Standardization (ISO) was created, with
the participation of 26 countries, to facilitate international trade through
the harmonization of technical standards. In general, the name ISO is
erroneously interpreted as an abbreviation (it would have to be ‘IOS’ to
be precise) for International Organization for Standardization or, even
worse, as it is incorrectly called, International Standard Organization, to
adjust the abbreviation to the name. In fact, ISO is a proper name,
inspired by classic Greek – a language in which the prefix ISO means
‘equality’ – hence the words ‘isotherm’ (equal temperatures) and
‘isonomy’ (equality of rights).

The efforts towards solving environmental problems on an international

scale go back to the beginning of the twentieth century, but it was
during the United Nations Conference on the Human Environment, held
in Stockholm in 1972, that the environmental issue became a truly global
concern. Perhaps its most significant outcome was the proposal for a new
relationship between the environment and development, which laid the
basis for the concept of sustainable development. The World Commission
on Environment and Development (WCED), created in 1983 by the UN,
published in 1987 the report Our Common Future, also known as the
Brundtland Report, an important document about the search for a
balance between development and the protection of the environment, in

xii Understanding ISO 26000

 Preface

which sustainable development is defined as ‘one that meets the needs

of the present without compromising the ability of future generations to
meet their own needs’.

Stemming from the Rio 1992 meeting, there appeared within ISO the
Strategic Advisory Group on the Environment (SAGE), which was
established to carry out a study on the need for international standards
on the environment. This recommended the preparation of
environmental management standards and that would become the
ISO 14000 series.

In the area of social responsibility SA8000, the social accountability

standard, appeared – perhaps as a function of Nike’s international
strategy. The Social Accountability Institute (SAI) – an American entity
that aims to improve the performance of organizations, especially their
labour relationships – focuses preferentially on meeting ILO conventions,
particularly those relating to forced labour, freedom of association,
occupational health and safety and child labour. Still in the field of social
responsibility there appeared in England by the end of the 1990s the
standard AA1000 – AccountAbility. This standard is aimed at a topic not
covered by SA8000: the dialogue with stakeholders. Out of these, no
doubt, the most known and practised are the ISO standards, especially
the ISO 14000 (Environmental Management) and ISO 9000 (Quality
Management) series.

The social responsibility theme is a polemic and dynamic one, stretching

from extremely simple concepts to robust and sophisticated definitions.
Adam Smith in Wealth of Nations (1776) defended free trade. His
argument can be summarized in this way: increase in productivity occurs
with the division of work; the division of work increases or diminishes
according to the market size; the market in turn is amplified to the
maximum possible through free trade. Therefore, free trade enables
greater productivity. Smith tried to show the superiority of industry over
agriculture, of profit and appreciation over revenue, of currency over
barter, of selfishness over charity. In his own words, ‘it is not from the
benevolence of the butcher, the brewer or the baker that we expect our
lunches, but from their interest in their own personal gain’. By this liberal
concept, the social responsibility of a company is the maximization of its
profit, the generation of jobs and tax payments.

However, more recently the entrepreneurial environment has started to

demand from organizations a new sense of responsibility. Social and
environmental responsibility can be summarized in the concept of
effectiveness, as the attainment of socio-economic development
objectives. Therefore, an organization is effective when it maintains a
socially responsible attitude. Then comes the ‘triple-bottom-line’ concept,
an expression created by John Elkington that was already being
disseminated by the United Nations Conference on Environment and
Development (UNCED). In fact, Maurice Strong, Secretary-General of the

Understanding ISO 26000 xiii

Preface

UN Conference on the Human Environment, had already mentioned that,

in order to attain these sustainability dimensions, it would be necessary
to simultaneously obey the following criteria: social equity, ecological
prudence and economic efficiency.

In the face of such debate, in which all theories on social responsibility

are equally alive, many public organizations or representative entities
decided to define what they understood about this subject. The Brazilian
NBR 16001:2004 standard defines social responsibility as the

ethical and transparent relation of the organization with all the

public with which it relates and by the establishment of goals
compatible with society’s sustainable development, preserving
environmental and cultural resources for future generations,
respecting diversity and promoting reduction of social inequalities.

This approach is aligned with the notion that social responsibility derives
from the understanding that business activities should, necessarily, bring
benefits to society, provide employee professional achievement, promote
benefits to partners and the environment and bring return to investors.

The development of ISO 26000 has shown recently that the majority of
the current understanding of the subject explores the interrelationship
between social responsibility and economic, environmental and social
aspects and the impacts of an organization’s activities that are associated
with a sustainable development theme. Such an understanding
incorporates contributions from the debate on sustainable development,
a new way to approach development that includes the social and
considers the environment.

ISO 26000 is based upon the worldwide demand for social responsibility
expressed during the meeting held on 30 April and 1 May 2001 at which
the ISO Council approved the resolution that noted the importance of
the emerging matters relating to social responsibility and invited its
Consumer Policy Committee (COPOLCO) to consider the feasibility of
international standards in this area. After two years of study, ISO decided
that the ISO TMB Social Responsibility Working Group, responsible for the
global co-ordination of the work should, for the first time, be led jointly
by the standardization entities of an industrialized country (SIS – the
Swedish Standards Institute) and of a developing country, the Associação
Brasileira de Normas Técnicas (ABNT – the Brazilian Technical Standards
Association).

The standard was finalized during 2010. The first committee meeting
took place in Salvador (Bahia), in March 2005. A long series of debates
followed, with extreme and conflicting positions taken that were
considered side by side in the biggest multi-stakeholder forum ever to
discuss social responsibility. In fact, along the way towards the creation of
the ISO 26000 standard, ISO needed to monitor the divergences between

xiv Understanding ISO 26000

 Preface

the different stakeholder groups and their different opinions, which were
sometimes radically opposed as to the model and suitability of the new
standard.

I have chaired, with great emotion, the work of ISO 26000 for five years.
It was a spectacular experience played out by more than 500 experts
worldwide from around 100 countries. This entire journey and its results
are now recorded in this wonderful book edited by my friend Adrian
whom I thank for his unconditional support for my chairmanship.

Enjoy the book!

Jorge Cajazeira, Chair of the ISO 26000 Working Group

Understanding ISO 26000 xv

Introduction

Adrian Henriques

ISO 26000 is a standard on social responsibility. It provides guidance

rather than stating a set of requirements to which a company or other
organization must conform. It brings the authority of ISO to an area
already rich in standards produced by non-governmental organizations
(NGOs), companies and governments. And it represents the achievement
of a remarkable consensus on social responsibility issues by the very
diverse organizations and individuals involved in its development.

ISO 26000 therefore represents a new departure for ISO. Among the tens
of thousands of standards under the ISO umbrella, it is unique. This is
partly because of its subject matter, which is not a somewhat dry matter
of important though obscure utility, but a key issue of current social
concern. It is true that elements of that concern have been approached
by some of the other important standards that ISO has produced to date,
including the ISO 14000 series covering environmental management,
measurement and performance and the ISO 9000 standards covering
quality management. But the scope of ISO 26000 is far broader. It
encompasses issues as diverse as human rights, labour rights, corruption,
stakeholder engagement and reporting, as well as the environment.
There are few major issues of sustainability that are not covered in some
way by ISO 26000.

Yet it is not a sustainability standard, or even a standard for sustainable

development. It is a standard for the social responsibility of
organizations. The relationship of social responsibility to sustainability
(and indirectly sustainable development) is important, but often hard to
convey. The simplest explanation draws on the fact that in one sense they
cover the same ground: the responsibility perspective focuses on
contributions to sustainability (and who should make what contribution –
the ‘who’ and the ‘how’), whereas the content of sustainability is
structured in terms of categories of issues such as pollution or labour
issues (the ‘what’). And it is possible to describe the issues without
reference to what should be done about them. But there are no
sustainability issues for which no one has responsibility, nor social
responsibility issues which fall outside the domain of sustainability.

This book is intended to provide the background and some deeper

insight into the interpretation and implications of ISO 26000 as well as

Understanding ISO 26000 xvii

Introduction

into how it might be used, through the contributions from a number of

people who were closely connected with its development. It is aimed at
both specialists and generalists alike. It should be useful for those
working on responsibility issues within companies and other
organizations as well as those working in the field of standardization and
in academia.

This introduction describes the history and background from which

ISO 26000 has emerged and then provides an overview of the
contributions and contributors to the book.

The background to social responsibility

To understand ISO 26000 and social responsibility it is helpful to
appreciate the historical context in which it has arisen in terms of
historical and structural factors, as well as dominant issues. There are two
overarching structural factors that have affected the development of our
ideas of social responsibility: global governance and globalization. These
are described below. There are also a number of particularly influential
issues such as sustainable development and the stakeholder perspective
that have shaped, and continue to shape, the idea of organizational
responsibility.

Global governance
Since at least the middle of the twentieth century the dominant model of
global governance has been that of autonomous nation states freely
co-operating through the institutions of the United Nations and
administering the private and voluntary sectors within their national
jurisdictions: ‘a world of nations’. The history of organizational
responsibility may be understood in part as resulting from the
expectations which naturally arise from that model. Moreover, its future
may be determined by how the public, private and voluntary sectors
respond to the forces challenging that state of affairs.

Under the ‘world of nations’ model, the legitimacy and responsibilities of

organizations within each sector of society are typically seen as follows.
For the public sector, legitimacy derives from popular consent and
democratic accountability; its responsibilities include policy development,
regulation and the delivery of services. The legitimacy of the private
sector derives from the delivery of goods and services, including the
creation of wealth; its responsibilities are primarily to obey the law and
pay taxes determined by the public sector. In addition, companies that
choose to follow the long tradition of philanthropy evident in many parts
of the world, from India to the United States, are respected. The
legitimacy of the voluntary sector derives from the declared social mission

xviii Understanding ISO 26000

 Introduction

of organizations such as charities; their responsibilities centre on the

faithful administration of donated funds in accordance with their
mission.

Globalization
Globalization, considered as the extending geographical reach of
economic activities and forces, is one of the trends that challenge the
‘world of nations’ model. In this sense globalization includes the
extension of the markets for goods or services from a home country to
the entire world, the lengthening of supply chains to encompass in
principle any country and the growth of foreign direct investment (FDI).
For example, it is now very common for goods sold in the United States
or Europe to have been produced in China or other parts of Asia. FDI has
also shown very significant growth, with large impacts on the economies
and societies of the recipient countries.

Overall, globalization has resulted in an increase in the power and

influence of the private sector and a relative weakening of the role of
the public sector. One example of this is that the scale of impact of
companies has become very much greater and so the concern and
expectation as to the appropriate level of responsibility has grown. The
pressure to internationalize operations is forcing companies to deal with
human rights and labour abuses in countries in which they wish to
operate. Globalization has also brought cultural differences to the fore:
the ideas and values of global consumer brands, for example, are
extending into societies that may have quite different cultures. What is
appropriate corporate responsibility under these circumstances?

The financial crisis and the near collapse of the global financial system
have also underscored our global interdependencies. Not only are
different parts of the world now quite clearly dependent on one another,
but the private sector needs co-operative and coherent regulatory
functions from the community of nations if it is to preserve a stable
business environment.

Sustainable development and the environment

The concept of sustainable development is complex. It is often taken to
encompass an acceptable level of environmental impact combined with
economic development and social progress. There is a significant history
of international agreement as to the need for sustainable development.
The 1972 UN Conference on the Human Environment produced a
declaration publicly acknowledging the adverse impact of humans on the
natural world. The 1987 World Commission on Environment and
Development Report (the Brundtland Report) built on this and proposed

Understanding ISO 26000 xix

Introduction

the following definition: ‘Sustainable development … [meets] the needs

of the present, without compromising the ability of future generations to
meet theirs.’ This is included in ISO 26000.

International agreement has been reaffirmed through the 1992 UN

Conference on Environment and Development, which set out in the Rio
Declaration an agenda for the public sector in the twenty-first century
(Agenda 21) to pursue sustainable development. Ten years later, in 2002,
the World Summit for Sustainable Development (WSSD) established the
Millennium Development Goals covering economic, social and
environmental performance. The WSSD also proposed that the public and
private sectors should work in partnership in the pursuit of sustainability.
The sustainable development approach has therefore come to
acknowledge that all organizations from the public, private and
voluntary sectors should address the problems of sustainability.

Concern for the environment, where environmental impacts adversely

affect human prosperity in the developing world, has therefore been at
the heart of the sustainable development debate. However, there has
also been concern for the environment in its own right, where the
immediate impact on human society is not necessarily an issue. The
capacity of the environment to absorb the products of human activity,
from the consequences of oil spills to the accumulation of heavy metals
and persistent chemicals and their impacts on ecosystems, is an example.
For some, the centre of concern is the adverse impact on the enjoyment
of the natural environment; for others, the natural world has a value in
itself. And, of course, in the longer run there will also be an impact on
humanity. From either perspective it is important to address the source of
these impacts, which stem in part from the public sector, but in particular
from private sector manufacturing and other operations.

The stakeholder perspective

For much of the twentieth century, the academic community has explored
the wider impacts of business. In the 1980s this was expressed, in a
strategic planning context, as ‘stakeholder theory’. Stakeholder theory
systematically analyses the impacts that companies (and all kinds of
organization) have on those who ‘affect them or are affected by them’.
For companies, the term ‘stakeholder’ therefore typically includes
consumers, suppliers, shareholders and staff, amongst a wide range of
others who have in interest in the company. Today, in business schools
worldwide, the study of companies from this wider perspective is
increasingly common. It has also become central to almost all practical
approaches to organizational responsibility.

Stakeholder analysis is perhaps most useful in understanding the impacts

of organizations on stakeholders, such as those living near a
manufacturing plant, who are ‘affected by’ an organization and may be

xx Understanding ISO 26000

 Introduction

vulnerable. The final definition of stakeholder within ISO 26000 stresses

this aspect of stakeholder relationship. The term is generally also used to
include stakeholders who affect the organization. Two stakeholder
groups in this category have become particularly important in recent
years: NGOs and shareholders.

The term ‘NGO’ has been used in a variety of ways, but it is now more
usually used to mean voluntary sector organizations. NGOs, through
working on issues of societal concern such as poverty and deprivation,
have become significant advocacy forces. As such they have worked to
influence not only the public sector but increasingly also those companies
relevant to their mission. Companies typically consider NGOs as their
stakeholders. In this respect, NGOs have become increasingly effective
both by increasing their scale of operation and advocacy internationally
and by working through new communications technology to co-ordinate
their activities and campaigns with other NGOs worldwide. Of course
NGOs, as organizations, also have stakeholders, and organizational
impacts, in their own right.

Shareholders have, of course, long been the dominant stakeholder for

companies. In recent years, however, their role has been changing in two
respects. First, for the majority of shareholders the importance of
corporate governance (see below) has become a growing issue. Second,
the volume of socially responsible investment (SRI) has grown rapidly in
recent years. This has brought additional pressure on companies to
review their responsibilities.

Labour, outsourcing and the supply chain

The industrial revolution in Europe led not only to the modern company
form but also to the development of organized labour. Long before
corporate social responsibility, driven by the terrible conditions often
suffered by workers, the union movement has worked to protect
workers’ rights and ensure that companies pay attention to their
responsibilities to their staff.

As globalization through FDI brings industrialization to more parts of the

world, to some extent this history is repeating itself. Partly as a result of
pressure to reduce costs, Western companies have increasingly redefined
their core business to focus on customer and brand relationships. In
consequence it has become possible to contract out other functions to
suppliers based in the developing world. While enabling them to take
advantage of cheaper labour supplies in the developing world, the price
has often been very poor and exploitative labour conditions which can
include excessive hours, unsafe working conditions, pay set below a
reasonable living wage and the use of child or prison labour. The public
realization in the developed world that goods sold in Western countries
have been produced under such conditions has often led to serious

Understanding ISO 26000 xxi

Introduction

adverse publicity for the companies involved. Given the extensive global
supply chains of the large number of goods needed by all kinds of
organization, the responsibility to avoid the use of such practices can be
a problem faced by any sector – whether private, public or voluntary.

It has not always been possible to rely on national governments to

address these problems. In consequence, in addition to the development
of organized labour, a number of voluntary codes involving companies
and NGOs have been developed to address them. SA8000 was one of the
first examples of this approach to corporate responsibility.

Health
Historically ill-health, including both acute and chronic conditions, can be
linked to poverty. This continues to be the case. The production processes
used in manufacturing illustrate one aspect of this. While companies in
developed countries may adopt safer production processes, those in the
developing world may not always be able to do so. Asbestos-related
disease, for example – the leading cause of work-related death
worldwide – is rising in the developing world while declining elsewhere.

As new technological and industrial methods of production and modern

lifestyles have developed, new health conditions have emerged. One
example of this is obesity. While in one sense obesity may be the result of
individual choices, it must also be acknowledged that it results from the
lack of exercise inherent in modern life together with the abundant
availability of high-sugar, high-fat foods. The relative responsibility of
individuals, companies and the public sector is currently a matter of
active debate.

Other diseases, while they may not result from industrial practices, are so
severe in their impact, that all sectors of society are called to address
them. Tuberculosis and HIV/AIDS affect the developing world
disproportionately. One reason for this is that the available treatments
may be too expensive; this is a matter principally for pharmaceutical
companies and the public sector to address. In addition, it is now
increasingly seen as the responsibility of all companies and other
organizations to ensure that they have HIV-effective policies in place for
the support of their employees. Some of the obvious advantages of such
an approach include a healthier and more able workforce.

Climate change
Climate change and the predicted rise in global average temperatures is
likely to have severe consequences for all human societies as well as for
the natural environment, according to the Intergovernmental Panel on
Climate Change (IPCC), which operates under the auspices of the World

xxii Understanding ISO 26000

 Introduction

Meteorological Organization (WMO) and United Nations Environment

Programme (UNEP). The scale of these impacts – from rising sea levels,
coastal destruction, displaced populations and crop failures to
encroaching desertification – makes global warming the single most
important issue likely to face humanity over the next century.

Greenhouse gases, and particularly carbon dioxide (CO2) resulting from

burning fossil fuels, are centrally implicated in the complex processes
leading to the rise in temperatures. The use of energy by modern
energy-intensive industrial activity and associated with high intensity
consumption is therefore a crucially important issue for all organizations
to address.

While the energy producing sector clearly has a particular responsibility

to work actively towards the practical availability of alternative sources of
energy, all companies have a responsibility to minimize their carbon
dependence. Using less energy will, of course, also reduce associated
costs. However, global warming can only be addressed through
governments and consumers, as well as the private sector, actively
working together to address the issue.

Organizational governance
The importance of corporate governance is usually only seen when it
fails. The high profile cases of corporate failure in recent years, together
with some instances within the voluntary sector, show that how an
organization is directed and controlled is of concern to a wide spectrum
of its stakeholders – from shareholders (or donors) to staff and those who
may depend on the activities of the organization in other ways.

Corporate social responsibility (CSR) and organizational responsibility can

more broadly be seen as a response to failures of governance that can
affect all stakeholders. CSR is increasingly being built into the risk
management systems of major companies. Systematic organizational
responsibility seeks to build the interest and concerns of its stakeholders
into the processes by which it is directed and controlled. The United
Nations Global Compact for companies and the International NGO
Charter are based on existing human rights, labour and environmental
conventions and can be seen as resulting from a desire for better
stakeholder governance. One pervading motivation for such initiatives
was the enhanced regard and reputation of those following this route.

While the challenges of global governance can only finally be resolved

through a global political process, that process will require the support
and co-operation of organizations of all sectors. Organizational
responsibility is an essential component of that process, building on an
existing ethical stream of motivation drawing on a wide range of sources,
from African ubuntu to corporate philanthropy – and going beyond.

Understanding ISO 26000 xxiii

Introduction

ISO 26000
In addition to increasing regulation, part of the reaction to these serious
issues was a proliferation of standards, particularly involving the NGO
sector, but also with active participation from industry and at times the
public sector. These standards were of very diverse types. Some were
statements of aspiration and principle. Some were detailed prescriptions
of expected behaviour or levels of performance for social or
environmental issues. Some concerned reporting and assurance. Some
were standards with detailed requirements that could be certified
against, others were not. ISO 26000 therefore entered a crowded stage.

ISO 26000 is a guidance standard, not a certifiable standard. It is also not

a management system standard. For those who have worked with
ISO 14000, this is unfamiliar territory. Within the overall ISO portfolio of
standards, however, it is not unusual.

ISO 26000 was also developed by a working group designed with a

stakeholder structure that was enforced wherever possible. This allocated
each expert delegate participating in its development to one of six
categories:

• industry;
• government;
• consumer;
• NGO;
• Labour; or
• Support, Service, Research, and Other (SSRO), which covers all other
types of stakeholder.

Furthermore, every effort was made to balance representation from the

developing world as well as the developed world. The chair was from
Brazil; the co-chair from Sweden. The ISO 26000 Working Group was, as a
result, the first ISO standard to have more representation from
developing countries than from developed ones. The attempt to reach
balance also extended to each sub-working group (of which there were
many) during the development of the standard.

The process of developing the standard was prolonged. Figure 1 shows

the series of meetings at which experts met to debate its shape and
content.

In order to ensure consistency of interpretation with other major

standards and initiatives, ISO drew up Memoranda of Understanding with
the ILO, the Global Compact (which is often described as the largest CSR
initiative in the world) and with the Organization for Economic
Co-operation and Development (OECD).

xxiv Understanding ISO 26000

 Introduction

Figure 1 – The Development of ISO 26000

ISO 26000 defines ‘social responsibility’ as the

responsibility of an organization for the impacts of its decisions

and activities on society and the environment, through
transparent and ethical behaviour that:

• contributes to sustainable development, including health

and the welfare of society
• takes into account the expectations of stakeholders
• is in compliance with applicable law and consistent with
international norms of behaviour and
• is integrated throughout the organization and practised in
its relationships.

Corporate social responsibility (or CSR), as the name suggests, is the social
responsibility that attaches to companies. Organizational social
responsibility, which is the subject of ISO 26000, generalizes that idea so
that it is applicable to all organizations. CSR is therefore a subset of
social responsibility.

The structure of the main part of the standard covers:

• Principles of social responsibility.

• Recognition of social responsibility and engaging with stakeholders.
• Seven core subjects (which in turn encompass some 37 issues):

Understanding ISO 26000 xxv

Introduction

– organizational governance;
– human rights;
– labour practices;
– the environment;
– fair operating practices;
– consumer issues; and
– community involvement and development.
• Integrating social responsibility within an organization.

About this book

This book contains chapters written by a number of those who were
centrally involved in the development of the standard. Partly as a result
of this there is an apparently heavy emphasis on the process of its
development. However, this is an important insight in itself. The
legitimacy of the standard, and ultimately the extent to which it will be
used, is crucially dependent on the legitimacy of the process by which the
standard was developed. Moreover, some of the techniques used to
structure the development work involved are themselves examples of
good social responsibility.

A minority of the contributors are writing from a corporate perspective.

The contributors also include NGO and union representatives and
academics, amongst others. The contributions are therefore of a diverse
nature in terms of style, length and analysis. No attempt has been made
to normalize their views or to produce an apparently ‘objective’
perspective. After all, there is no standard by which this could be judged,
other than the standard itself, which represents the consensus eventually
achieved by the hard work of the Working Group.

Occasionally, as a result, shortcomings in the standard are pointed out.

Few would claim the standard is perfect. It has been produced through
extensive discussions over many years between many participants from
very different backgrounds. Like the contributors, these participants in
the Working Group came from companies, NGOs, the ILO and major
industrial trade associations, as well as much smaller organizations from
every sector. Indeed, the process of the development of the standard was
itself a significant process in the development of the understanding of
these issues and a part of the dialogue through which the general social
understanding of them – by all involved – has progressed. But this has
resulted in compromise.

So this is not a handbook for ‘applying’ social responsibility to an

organization; social responsibility is far too complex and contested a
subject for that. The book is divided into three parts. Part I deals with a
number of the ‘core subjects’ and some other key issues of ISO 26000
(mainly taken from Clause 6). These chapters cover the main clauses of
the standard that deal with consumer issues, human rights, labour

xxvi Understanding ISO 26000

 Introduction

practices, the environment, international norms and stakeholder

engagement, and community involvement. They are not trying to
summarize the content of the standard in some uniform way. Their
purpose is more to explore the scope of the issues and to describe the
reasons why the standard is significant and helpful for addressing them.

Part II of the book contains two chapters on ‘integrating and

implementing’ the standard. Given the launch of the standard in
November 2010, it is of course rather early for anyone to describe how
they have already integrated or implemented the standard thoroughly in
their organizations. What these chapters try to do is to describe how
their organizations approach social responsibility or how ISO 26000 might
be useful in taking social responsibility further within them. The chapters
in Part II represent practice in Brazil (by Aron Belinky) and the UK (by
Miles Watkins).

Part III contains chapters that address issues that relate to more than one
part of the standard or to the standard as a whole and, as a result, they
are not based on specific parts of the standard. These issues were
generally contentious. One of them was the role of the state. ISO 26000
is, in principle, as applicable to government as to wholly different
organizations such as an NGO, a small business or a university. The state
is, of course, a very different kind of organization, since it derives
legitimacy from some form of democratic expression, not through
adherence to any standard. The standard is not intended to be applied to
the democratic process. One way this is captured is by defining an
organization in this way:

For the purposes of this International Standard, ‘organization’

does not include government acting in its sovereign role to
create and enforce law, exercise judicial authority, carry out its
duty to establish policy in the public interest or honour the
international obligations of the state.

Yet states, and government at all levels, also have several different kinds
of function within them. In some respects they are organizations
discharging practical functions (such as cleaning the streets) that might,
in principle, be discharged through activities of the voluntary or private
sector. However, they also make policy and administer justice. ISO 26000
in effect carefully distinguishes what might be called the ‘political’
functions of the state from those that might be called ‘practical’.
ISO 26000 is applicable to the latter only. However, it is not only
applicable to entirely practical functions within the state but it is also
applicable to the administrative side of political functions. The
administration of justice is a political function, for example, but its

Understanding ISO 26000 xxvii

Introduction

practical administration will have many impacts to which the standard

may be applicable. Amongst its impacts will be the use of energy – and
the standard has much to say about how such environmental issues
should be approached. Chen Wang’s chapter on standards and the state
discusses this issue from the Chinese perspective.

Another significant issue was the role of ‘sphere of influence’ within the
standard. This was already a contentious issue before the intervention by
the Special Representative of the United Nations Secretary-General on
Business and Human Rights (SRSG), Professor John Ruggie. Until the last
meeting in 2010, it was unclear how the standard should deal with this
issue, since it was not always obvious how the extent of the sphere of
influence of a particular organization should be defined or what
responsibilities hinge upon it. Stepan Wood’s chapter discusses these
issues very carefully.

The impact of ISO 26000 on trade and the workings of the World Trade
Organization (WTO) were also much debated during the development of
the standard. At issue is the extent to which a condition of adhering to
the standard might restrict trade. Of course, the standard is not one that
contains requirements, so it may be hard to see how the standard can be
used in this way. Nevertheless, powerful arguments were presented.
Gwenann Manseau’s chapter on the issue very coherently presents again
the arguments that lay behind the position of the USA and some other
countries on this matter.

Despite the attention paid to the composition and balance of the

Working Group, the way specific issues were handled required a lot of
care. Khawla Al-Muhannadi’s chapter discusses the treatment and
resolution of one such issue: sexual orientation. The significance of this
account is not only as a historical record, but also to some extent as a
guide to the way such issues may need to be addressed in organizations
in the future during the integration of the standard’s advice.

Finally, how does ISO 26000 relate to other standards? While there are
relatively few ISO standards dealing with sustainability issues, non-ISO
standards dealing with ethical, environmental and social issues have
proliferated in recent years. ISO 26000 has made a real attempt to
synthesize, rather than conflict with the many other standards in the
area. Jonathon Hanks’ chapter describes these relationships, thus placing
ISO 26000 more securely on the global stage.

xxviii Understanding ISO 26000

Contributors

Khawla Al-Muhannadi is Founder and President of the Environment

Friends Society (Bahrain), Coordinator of the Environmental Alliance
(Bahrain), Chairperson of APEAN (Arabian Peninsula Environmental
Experts Network) and Content Manager for the Bahrain National
Monument. Khawla was part of the Bahraini delegation to the ISO 26000
Working Group and is a developing countries representative to the Post
Publication Organization (PPO; the international group set to follow up
on the implementation and dissemination of ISO 26000).

Sandra Atler is a human rights lawyer and a legal adviser to ECPAT

Sweden. Sandra was a Swedish expert in the ISO 26000 Working Group
(2005–2010), represented the NGO stakeholder group and was part of the
management structure of the Working Group. In her capacity as a human
rights expert, she has advised the UN Special Representative for Business
and Human Rights, Professor John Ruggie, as well as the UN Global
Compact.

Aron Belinky is Executive Secretary of GAO, the Group for Brazilian

NGOs Articulation on ISO 26000 and also co-founder and executive
secretary of EcoPress. Aron was part of the Brazilian delegation to the
ISO 26000 Working Group, representing NGOs. Aron was also part of the
management structure of the working group and is a developing
countries representative to the PPO.

Alan Fine is Public Affairs Manager at AngloGold Ashanti. Alan was part
of the South African delegation to the ISO 26000 Working Group,
representing industry, and also part of the working group’s drafting
team.

Jonathon Hanks is Managing Director of Incite Sustainability (a

sustainability consultancy and advocacy body) and Visiting Senior Lecturer
at the Graduate School of Business, University of Cape Town. Jonathon
led the South African delegation to the ISO 26000 Working Group,
representing SSRO stakeholders. Jonathon was also part of the
management structure of the working group and Convenor of the
ISO 26000 Integrated Drafting Task Force.

Adrian Henriques is Visiting Professor of Accountability and CSR at

Middlesex University. Adrian was part of the UK delegation to the

Understanding ISO 26000 xxix

Contributors

ISO 26000 Working Group, representing NGOs and is Chair of the UK

National Mirror Committee for ISO 26000.

Dwight W. Justice is Policy Adviser at the International Trade Union

Confederation (ITUC), focusing on industrial relations, trade union
organization, labour codes of practice and corporate social responsibility.
ITUC has 175 million members through affiliate organizations from 150
countries. Dwight was a liaison organization delegate to the ISO 26000
Working Group, representing labour. Dwight was also part of the
management structure of the working group.

Gwenann Manseau is Senior Attorney, Office of the Chief Counsel for

International Commerce, US Department of Commerce. Gwenann was
part of the US delegation to the ISO Working Group, representing
government.

Martin Neureiter is Senior Partner in The CSR Company and was part of
the Austrian delegation to the ISO 26000 Working Group. Martin was
also part of the management structure of the working group and
represented SSRO stakeholders. He was also the convenor of the
sub-group on implementation.

Bart Slob is a senior researcher at SOMO. He was a liaison organization

delegate to the ISO 26000 Working Group representing Red Puentes, a
network of civil society organizations from Latin America and Europe
concerned with the culture and practices of social responsibility of
businesses in Latin American countries.

Chen Wang is the Vice Director of Social Responsibility and Credit

Division of the Quality Management Branch at the China National
Institute of Standardization (CNIS). Her research interests encompass
social responsibility, sustainability, occupational health and safety
management systems. She was the Chinese National Standards Institute
delegate to the ISO 26000 Working Group and is currently a registered
expert for the ISO 26000 Post Publication Organization.

Miles Watkins is Director of Sustainable Construction at Aggregate

Industries. Miles was Chair of the UK National Mirror Committee for the
first part of the development of ISO 26000 and represented industry.

Stepan Wood is an Associate Professor of Law at Osgoode Hall Law

School, York University, Toronto, a Jean Monnet Fellow at the Robert
Schuman Centre for Advanced Studies, European University Institute,
Florence, and Vice-Chair of the Standards Council of Canada’s Canadian
Advisory Committee on ISO/TC 207/Subcommittee 1 (environmental
management systems). He was a member of the Standards Council of
Canada’s Canadian Advisory Committee on Social Responsibility and
attended some meetings of the ISO Working Group on Social
Responsibility as an observer.

xxx Understanding ISO 26000

 Contributors

Lucy Yates is Principal Policy Advocate at Consumer Focus. Lucy was part
of the UK delegation to the ISO Working Group, representing consumers.

Understanding ISO 26000 xxxi

Part I – ISO 26000 Issues

Organizational governance2
Martin Neureiter

What is it?
Organizational governance is a key element of Clause 6 of the ISO 26000
standard. It is key in many ways that I will try to explain. First, by
content: organizational governance is all about the basic ingredients of
what makes good social responsibility. So, if ISO 26000 is the recipe book
for social responsibility, Subclause 6.2 on organizational governance is the
part where the ingredients are described. Transparency, accountability,
rule of law, respect for international norms of behaviour, ethical conduct
and respect for stakeholder expectations: all of these rank as principles in
the standard and the organizational governance clause makes them also
part of the issues an organization needs to consider.

But first let us look at the term, which sounds rather unfamiliar. We may
know ‘corporate governance’, but ‘organizational governance’? Well, the
reason for this is to be found in the scope of the standard where it says
that this standard is intended for all kinds of organization. The term
‘corporate governance’ therefore falls short of what the experts in the
Working Group wanted to describe. Transparency, accountability and all
the other issues also apply to other kinds of organization, not only
corporates. It will be interesting to see how all this will translate into
practice, as the transparency of the Church or of some of the institutions
of the state cannot be taken for granted.

Organizational governance refers to the system by which an organization

makes and implements decisions in pursuit of its objectives. It is both a
distinct core subject, within the standard, as well as a means for
implementing other core subjects.

How did organizational governance come to be in the standard? The

seven core subjects were discussed as early as the Working Group
Meeting in Lisbon in 2006, and the Group at that point had set out the
seven core subjects, which then were not changed in any substantial way.

2
Organizational governance is the subject of Subclause 6.2 of ISO 26000.

Understanding ISO 26000 1

Part I – ISO 26000 Issues

The names were changed sometimes, and the whole clause was
transformed from ‘core issues’ to ‘core subjects’ (as the term ‘issue’ was
used in the standard in different places with different meanings).
Nevertheless, within the core subjects we find in total 37 issues, captured
as subheadings that make up the core subjects.

Organizational governance is made up of five issues:

• legal compliance;
• transparency;
• accountability;
• ethical conduct;
• recognition of stakeholders and their concerns.

But it is remarkable that the Working Group identified these seven core
subjects at a very early stage of the standard’s development and they
remained the same through four working drafts, two committee drafts, a
draft international standard, a final draft international standard (FDIS)
and finally the published international standard. It is even more
surprising that they survived the many thousands of comments from
individuals and mirror committees from all around the world. I think this
gives great credibility and legitimacy to the current text.

There is a reason why organizational governance is the first of the seven

issues: it has a central role. (See Figure 1 – Schematic Overview of
ISO 26000, which is reproduced as Figure 2.) This indicates that there can
be no human rights, no consumer issues, no fair operating practices,
none of the other core issues, if there is in place no organizational
governance.

The components
Transparency

The first major issue within organizational governance is transparency. It

is actually very simple: without transparency, there is no social
responsibility. Without transparency, there is no accountability and
without accountability for the actions and decisions taken then any
organization could be doing whatever it wanted, there would be a
failure of order and systems and anarchy would rule. So transparency is
not a new concept invented for social responsibility purposes, but rather
a fundamental element of modern societies based on the rule of law.
There is no good and bad if there is no transparency and no consequent
sanction on behaviour.

This relationship has been transposed into social responsibility. Let me pin
it down with an example. At a conference I was asked by an army officer
of one country whether transparency in the context of social

2 Understanding ISO 26000

 Organizational governance

Figure 2 – Schematic overview of ISO 26000

Understanding ISO 26000 3

Part I – ISO 26000 Issues

responsibility means that we have to tell everybody how many

submarines we have, what guns they have, how many torpedoes are on
board, of what kind and where they are stationed, and so on. My answer
was: No; that might be of interest to military analysts or spies, but it is
not of interest in the context of social responsibility.

But what would be interesting in the context of social responsibility

would be to know how the process of procurement for the submarines
was conducted, whether there was a fair bidding process, whether
measures were taken to prevent corruption, whether the best offer was
given the contract. All these issues relate to what happens to taxpayers’
money. Military secrets, or state secrets for that matter, are not
necessarily of interest. But, and one has to stress this in this context, not
everything can be hidden behind the magic word ‘state secret’. But that
is a different discussion. The point I am trying to make is that social
responsibility is not so much about the issue as about the process.
Transparency in the context of organizational governance has a lot to do
with transparent decision making processes.

At another level there is a key factor relating to transparency, and that is

information. Information is the good that transparency transports. And it
is strange and sometimes bemusing to see how large and small, national
and international companies believe they can manipulate information,
hide information or change it. Information is a good that cannot be
hidden; it does not simply go away; it cannot be put in a safe and remain
there forever. Consider recent examples such as Wikileaks or, to put it
into a business perspective, what we know about oil spills or sweatshops
in Bangladesh or other developing countries. Whatever it takes to
conceal information will be more expensive than being transparent in the
first place. But I guess it is a bit like the criminal and the law – a criminal
expects not to be caught, so a greater punishment will have little effect.
But if the benefit sought is a better financial bottom line, then the
punishment for those hiding information is self-inflicted, as they are
leaving out opportunities and running high risks in their own backyard.
Investors really do not like companies in which they invest to have such
hidden risks.

So organizational governance has a direct impact on the financial bottom

line (as do the other six core subjects). It appears, however, that many
organizations seem to think transparency is an easy one to avoid.

Accountability

The next key ingredient is accountability. It may be considered as the

sister of transparency, as it is the consequence of transparency. And
maybe that is part of the answer to the question posed earlier as to why
so many organizations try to hide information. They do not want to be
made accountable for the things they do. Well, a long-standing principle
in the environmental area is that the polluter pays. This approach needs

4 Understanding ISO 26000

 Organizational governance

to be transcribed into all areas of business activity, so that an

organization takes responsibility for all the actions and decisions that it
takes. This is explicitly stated in the ISO 26000 definition of social
responsibility. Being accountable for what one does is common sense.
Seemingly some managers think they can hide behind the organization,
turn off common sense and act irresponsibly, and yet not be made
accountable for their actions. Unfortunately, in modern theory of
business ethics it is very clearly stated that it is the manager who carries
the moral and ethical obligations of the organization, not the
organization as an abstract legal entity. So no hiding there.

Ethical conduct

Ethical conduct is the next point within organizational governance. There

were many controversial debates around this term during the
development of the standard, which is very common in international
agreements. It can also be the starting point for cultural differences, for
religious differences and for geographical differences. Let me explain
with an example which, at the same time, shows the problems around
this term and its interpretation. France was a country that did not want
to have this term in the standard at all, as it sees it as a religious term –
and who decides in the end what is ethical conduct and what is not, or
when a certain action can be judged as ethical conduct and when it
cannot? On the other hand the Islamic countries had absolutely no
problem with this term. They said that they know exactly what is ethical
conduct and what is not, as the Koran tells them what is right and what
is wrong.

Let me make this even clearer. In Western Europe we would consider

discriminating against somebody on the basis of their sexual orientation
to be unethical behaviour. It can even be brought before the courts,
which can give employers real problems. On the other hand, the same
employer can discriminate against somebody because of his or her sexual
orientation in an Islamic country, because Islam does not allow for such
behaviour and discrimination is considered the right thing to do. Now
the question is whether a company with one workforce but varied
behaviours in different regions can claim to be socially responsible? Or is
it only complying with the law of the country and unable to act
differently? In the standard, ethical behaviour is part of organizational
governance. So, as mentioned above, this clause is the gateway for
cultural and religious differences, but also the gateway for the
acceptance of this standard in different cultural settings. As a result,
under the standard, in both cases the company is behaving ethically
correctly, although it is doing apparently opposite things. Strange, but
true.

Understanding ISO 26000 5

Part I – ISO 26000 Issues

Legal compliance

The next term, related to the above, is legal compliance. If you ask the
man on the street, most people will answer that an organization, just as
any individual, has to obey the law of the country in which it is active.
This sounds easy and in most cases it is, but for many companies it can be
a nightmare. A company active only in one country already has
thousands of laws and regulations to track, follow and comply with. That
is why in many countries companies have so-called ethical officers who
keep track of compliance with local laws.

This can be really tricky when you look at states that are made up
according to a federal system were provinces within the country have
different laws on the same issues. My small home country of Austria has
nine provinces and each of them has different building laws. So a
supermarket chain that opens stores throughout the country has to
observe nine different building laws when building their stores. Stupid?
Definitely! Is it going to change? No, not in my lifetime! Companies
working across borders have even bigger challenges: different languages,
different legal systems, different political systems; it is easy to overlook a
law and be fined. Does that automatically make it unethical conduct and
a breach of legal compliance?

But the really big problems start in two major areas.

1. What happens in countries where law enforcement does not work so

well or is corrupt, or the laws are not as strict as in the home
country, especially, for example, environmental laws?
2. What happens if the law of the country is in contradiction with
international norms of behaviour?

Law enforcement is a tricky thing. Sometimes too much law enforcement

is considered to hamper business and act as an administrative hurdle that
hinders business expansion or even the ability of a business to operate.
Sometimes this has a political motivation: private companies may be
checked by the tax authorities several times a year, while state-run
companies are never reviewed. Or the company is so powerful that law
enforcement does not work, because if it did the company could retaliate
by moving production, firing people or even use corruption to get its
way.

These situations are very difficult to handle as they involve state

behaviour and the balance of interests and powers. Sadly a number of
multinational companies make use of weak state powers to be able to
produce goods more cheaply or with less attention to workers’ welfare or
to environmental issues. The worst of this is claiming to be a socially
responsible leader in the home country of the company and following all
rules and regulations, while outside of the country the company acts in
irresponsible ways.

6 Understanding ISO 26000

 Organizational governance

Of course, the question has to be asked: Does a company have to apply

the same standards to all places where it is active as it does in its home
country?

So, consider a Western European company with high social and

environmental standards and laws operating in a country that does not
require the same level of compliance. This is to walk a thin line: on the
one hand the possibility of production at lower costs, as the requirements
are not as demanding. On the other hand there is the potential risk of
running into social or environmental issues and having to bear the costs
for these, which might lead to losing the cost advantages gained earlier.

Let me describe a positive example of this, which is not at all based on

the company trying to be good or doing it for image reasons, but as a
result of a de facto saving of costs and the maintenance of quality.
Wienerberger, a large Austrian brick manufacturing company (in fact, the
number one in the world), went to India to start brick production there.
Indian environmental laws and social obligations are far lower than those
in Austria or Western Europe. So the company could have built a
production site there that would satisfy Indian legislation and save
money, especially on technical environmental grounds. But, the company
built a 1:1 model of a factory originally built in Belgium in the
countryside of Kanatakat State. The reason being was purely economic.
In this factory everything was developed, everything was tested,
everything was easy to build again, and the output was certain – quality
bricks. Any change in the production cycle would have resulted in much
trial and error in a new production line, time-consuming tests, uncertain
outcomes and a much longer inception time before production could
start.

One effect that had not been considered in the beginning proved to be
very important. The people working in the factory recognized the
difference in common brick production in India and word of mouth
spread quickly that this was a model factory to work in and the support
from the village people grew with every week. This proved to be very
valuable and financially a great success when local politicians tried to
blackmail the company into giving money to a political campaign, which
the company did not want to do, by staging protests in front of the
factory gates. It was the local population that drove the paid protesters
away, not the police, not the security guards. What more support can you
ask for?

The final question is what happens in the case of a conflict or

contradiction between the law of a country and agreed and recognized
international norms of behaviour? The ILO labour issues are globally
recognized. Some of these assert freedom of association and freedom of
collective bargaining. These rights are not granted in many economies
around the globe, where trade unions are either forbidden or are state
run, so are far from being independent. In addition, human rights are

Understanding ISO 26000 7

Part I – ISO 26000 Issues

very often granted on paper but, in reality, are lacking in the day-to-day
politics of many countries. Now the question for a user of ISO 26000
might be can I still be a socially responsible company and still be active in
such countries where fundamental human rights or fundamental labour
rights are ignored or even prohibited?

The answer is not easy. Many companies would claim it is better to be

there and try to change the system from the inside than to not go there
at all and let them do what they want. Sometimes simple business
thinking prevails over these issues, the carrot is simply too sweet. But this
can also backfire. OMV, a large oil company from Austria, was very active
in Sudan until public pressure in Austria increased to the extent that the
company had to sell its shares and withdraw from Sudan. The accusation
was that, through commission money paid to the government the
government bought weapons and used them to kill people in southern
Sudan. The company claimed its role in Sudan was to dig holes in the
ground, search for oil and gas and nothing else. Indeed, it created water
holes for the people, improved the infrastructure by building roads and
brought electricity to remote areas that were not connected to the grid.
But none of this helped; the pressure from NGOs was too great. So,
again, there needs to be a risk assessment before going into such places,
and the money to be earned is only one side of the equation. On the
other side are social responsibility issues, reputational issues, image issues
– and only taking all this into account can a fair economic judgement be
made. That is what good governance is about.

In conclusion
The understanding of organizational governance in ISO 26000 might be
different from the traditional understanding of corporate governance,
where it is all about board structures, remuneration and decision-making
processes. I believe the standard addresses a level above this by
highlighting the need for transparency, the rule of law and the other
issues discussed above. Having implemented organizational governance
at this higher level, the traditional corporate governance issues of
remuneration, board structures and so on become straightforward
because, if an organization does not act transparently and accountably,
its board structures and business decision-making processes will be flawed
and we find no traditional organization governance. This again shows
the great value of ISO 26000 as a tool that addresses the roots of ethical,
moral and good governance. This is far more powerful than focusing only
on certain limited results of ethical behaviour with a tick-box mentality:
merely checking whether or not certain pre-defined conditions have been
fulfilled. ISO 26000 can put a moral infrastructure in place so that the
demands of traditional corporate governance become satisfied quite
naturally.

8 Understanding ISO 26000

Human rights and social responsibility3
Sandra Atler

Human rights
Human rights are highly relevant and significant to any individual or
organization today. On a daily basis, one can hear and read about human
rights abuses, locally as well as globally. The perception that only states
can violate or impact human rights may once have been true for lawyers
but increasingly non-state actors are seen as very capable of adversely
impacting human rights. In particular, business and human rights have
received much attention during the past decade. The UN Special
Representative on Business and Human Rights (Professor John Ruggie)
identifies the root cause of the dilemma of business and human rights, in
the

governance gaps created by globalization – between the scope and

impact of economic forces and actors, and the capacity of societies to
manage their adverse consequences [providing a] permissive
environment for wrongful acts by companies of all kinds without
adequate sanctioning or reparation.4

Business can impact negatively on human rights in all contexts but,

according to the same source, the worst corporate-related human rights
harm takes place in countries where these governance challenges are
greatest: low income countries, countries in or emerging from conflict,
countries with a weak rule of law and with high levels of corruption.5

Under public international law, it is the state that is obliged to respect,

protect and fulfil human rights and fundamental freedoms. A convention
is a treaty that binds states under public international law. The human
rights conventions are written by states, for states. Nevertheless, the
Universal Declaration of Human Rights (adopted in 1948) states in its
preamble an often quoted paragraph in the context of business and
human rights that

3
Human rights is the subject of Subclause 6.3 of ISO 26000.
4
UN Human Rights Council, Report A/HRC/8/5, 7 April 2008, ‘Protect, Respect and Remedy: a
Framework for Business and Human Rights, Report of the Special Representative of the
Secretary-General on the issue of human rights and transnational corporations and other
business enterprises, John Ruggie’ (henceforth ‘UN Framework Report 2008’); p. 3, para 3.
5
UN Framework Report 2008, above n. 4, p. 6, para 16.

Understanding ISO 26000 9

Part I – ISO 26000 Issues

every individual and every organ of society, keeping this Declaration

constantly in mind, shall strive by teaching and education to promote
respect for these rights and freedoms and by progressive measures,
national and international, to secure their universal and effective
recognition and observance.

So even if human rights stem from international public law as specified

and developed in conventions and treaties (see below), the value
underlying the idea of human rights has transcended the legal field. It
has become a globalized value. Human rights are inherent, inalienable,
universal, indivisible and interdependent (ISO 26000, Subclause 6.3.2.1).

Since 1948 states have agreed to a number of treaties, conventions and

declarations specifying what human rights are. The ‘nine core human
rights instruments’ are treaties that protect human rights. Their various
optional protocols raise particular related topics or concerns. Each of
them has a monitoring body. The International Bill of Human Rights
includes the Universal Declaration of Human Rights together with the
first two core instruments: the International Covenant on Civil and
Political Rights and the International Covenant on Economic, Social and
Cultural Rights (both entered into force in 1976). The other seven human
rights instruments are the Conventions on:

• the elimination of Racial Discrimination;

• the elimination of All Forms of Discrimination against Women;
• Torture and Other Cruel, Inhuman or Degrading Treatment or
Punishment;
• the Rights of the Child;
• the Protection of the Rights of All Migrant Workers and Members of
their Families;
• the Protection of All Persons from Enforced Disappearances;
• Persons with Disabilities.6

Within the ISO 26000 Working Group, many experts viewed human rights
as central to social responsibility; in fact, it was one of the first issues that
came up. Few experts explicitly challenged that non-state actors also have
the ability to adversely impact human rights; initially, however, there was
no common understanding of what this meant in practice. Two
fundamental problems provoked discussion. The first was to define what
type of responsibility non-state organizations should have vis-à-vis human
rights. Should an organization be responsible for supporting, fulfilling,
protecting and respecting human rights, or should it ‘just’ observe them?
The second challenge was to translate the relevant type of responsibility
into action, and explain to the user of the standard what it would mean
in practice. The lack of a common understanding of what was reasonably
to be expected of organizations (other than states) stood in the way of
progress.

6
See http://www.ohchr.org

10 Understanding ISO 26000

 Human rights and social responsibility

When the UN ‘Protect, Respect and Remedy’ Framework (‘the UN

Framework Report’) was published in 2008, these challenges began to
resolve. The Framework proposed that the baseline responsibility for
companies is that they should respect human rights. This will be discussed
further below.

Setting norms
Various elementary questions were asked before, during and after the
drafting of ISO 26000. Can one standardize human rights? If there is no
common understanding of what responsibility non-state actors have
vis-à-vis human rights, should one begin by writing a standard on the
topic? But, can one avoid addressing human rights when there is a
decision to draft a standard on social responsibility? And if we are to
include human rights as part of a standard (albeit as guidance), does ISO
as an institution have the legitimacy or authority to do so? There were
strong views both for and against the decision to move forward; yet it
was moving ahead.

Regrettably, many of the big NGOs with expertise in human rights were
largely missing during the drafting of the standard. Fortunately, from the
UN family with particular expertise in human rights, the ILO and the UN
Global Compact did formally participate in the process. So did others:
thousands of experts around the world spent their time and dedication
over years of work towards a common goal – making human rights a
core part of social responsibility.

The UN Global Compact

On the initiative of UN Secretary-General Kofi Annan, the UN Global
Compact was launched in 2000. It is presented as a ‘strategic policy
initiative for businesses that are committed to aligning their operations
and strategies’7 with ten principles relating to human rights, labour,
environment and anti-corruption. Businesses can voluntarily join and
agree to align their business operations and strategies with the
principles. With 8,700 participants worldwide, it is considered to be the
world’s largest voluntary corporate responsibility initiative.8 The UN
Global Compact, ISO 26000 and the UN Framework (described in the next
paragraph) all request that companies respect human rights, and avoid
being complicit in human rights abuse committed by others. Note that
the UN Global Compact also asks companies to support human rights.
The UN Global Compact principles on human rights thus outline a
corporate responsibility to respect human rights, to support human rights
and to avoid complicity.

7
See http://www.unglobalcompact.org
8
Ibid.

Understanding ISO 26000 11

Part I – ISO 26000 Issues

The UN Framework for Business and Human Rights

In 2005, the UN established a mandate for a Special Representative of the
Secretary-General on the issue of human rights and transnational
corporations and other business enterprises. The mandate holder, Harvard
Professor John Ruggie, was tasked to identify and clarify standards and
practices, to research, to make recommendations, and to operationalize
the recommendations. During his mandate he presented a number of
reports to the UN. In March 2011, he presented the ‘Guiding Principles on
Business and Human Rights: Implementing the United Nations “Protect,
Respect and Remedy”’ Framework (the UNGPs), to the UN Human Rights
Council, which was endorsed by the Council in June 2011.

The UN Framework consists of three pillars:

1. the state duty to protect individuals against human rights abuses by

third parties, including businesses, by appropriate means;
2. the corporate responsibility to respect human rights; and
3. increased access for victims to an effective remedy.

These three are essential and interrelated:

the State duty to protect because it lies at the very core of the
international human rights regime; the corporate responsibility to
respect because it is the basic expectation society has of business in
relation to human rights; and access to remedy because even the
most concerted efforts cannot prevent all abuse.9

The UN Framework Report points out that since businesses can affect all
human rights, they are asked to respect all rights rather than only a
selected number. Companies, as economic actors, have responsibilities
that are different from state obligations.10 The specific corporate
responsibility is, again, to respect human rights.

Note that the UN Framework applies to businesses but ISO 26000 applies
to ‘all organizations’. Although the ISO 26000 Working Group experts did
discuss the differences (which are not reflected extensively in the text),
the key was that the UN Framework is directed to entities that are not
states (businesses) – emphasizing that responsibilities have to be
supplementary to those of states, not secondary, or undermining of state
obligations. The differences will not be discussed here.

9
UN Proposed Framework, p. 3, para 11, 2008, UN Human Rights Council, Report
A/HRC/17/31, 21 March 2011, ‘Guiding Principles on Business and Human Rights:
Implementing the United Nations “Protect, Respect and Remedy” Framework’, Report of
the Special Representative of the Secretary-General on the issue of human rights and
transnational corporations and other business enterprises, John Ruggie (henceforth ‘UNGP
Report 2011’); p. 4, para 6.
10
UN Framework Report, above n. 4, p. 4, para 6.

12 Understanding ISO 26000

 Human rights and social responsibility

It is not only businesses but also other organizations that should use
ISO 26000. The standard thus promotes as a global value (broader than
corporate responsibility) that all should respect human rights. NGOs
should also consider using the standard as a tool for change. Any
company or organization claiming it is using ISO 26000 should respect the
guidance set out in the standard. Respect for the interests of
stakeholders is a key principle of the standard; therefore any
organization claiming that it works according to the standard should be
open to and expect to hear the views of its stakeholders. The standard
can thus provide a route to dialogue and discussion on how the
organization is interpreting its responsibility to respect human rights.

ISO 26000 and human rights

The standard contains both a human rights subclause (6.3), and a human
rights principle (4.8). What does this apparent duplication mean? Clause 6
of the standard contains 37 issues that require action from the socially
responsible organization. The users of the standard are guided to
‘identify and address all those issues that are relevant or significant for its
decisions and activities’ (ISO 26000, Subclause 6.1).

The principle of respect for human rights (Subclause 4.8) is a broad value:
‘an organization should respect human rights and recognize both their
importance and their universality’. This means, for example, that the
rights apply in all countries and all situations. The UN Framework
explains the responsibility to respect human rights in all contexts, as a

global standard of expected conduct for all business enterprises

wherever they operate, over and above compliance with national
laws and regulations protecting human rights, [existing]
independently of States’ abilities and/or willingness to fulfil their
own human rights obligations.11

Subclause 6.3 of ISO 26000 on human rights is aligned with the UN

Framework, in particular because it emphasizes due diligence in
discharging the responsibility to respect human rights.12 Subclause 6.3
also contains additional guidance and information, for example, on what
characterizes certain categories of rights and it puts a particular emphasis
on the rights of vulnerable groups.

The baseline responsibility for all organizations is to respect all human

rights. This responsibility to respect human rights applies ‘regardless of

11
UNGP Report 2011, above n. 9, p. 21, para 23.
12
UN Special Representative of the Secretary-General for Business and Human Rights, Note
on ISO 26000 Guidance Draft Document, November 2009, p. 1; Zarocostas, John, ‘Social
responsibility standard draws mixed reviews’, 10 June 2010, available at
http://www.just-style.com/analysis/social-responsibility-standard-draws-mixed-
reviews_id107956.aspx

Understanding ISO 26000 13

Part I – ISO 26000 Issues

whether the state is unable or unwilling to fulfil its duty’. However,

where a state fails to live up to its duty to protect, ‘an organization
should be especially vigilant to ensure that it meets its responsibility to
respect human rights; human rights due diligence may point to the need
for action beyond what is necessary in the normal course of business’
(ISO 26000, Subclause 6.3.2.2).

The responsibility to respect human rights is globally expected conduct.

The UN Framework describes that the responsibility to respect implies
that companies should avoid infringing the rights of others and should
address adverse impacts on human rights where they are involved.13 To
respect human rights is not a passive responsibility: ‘To discharge the
responsibility to respect human rights, requires due diligence’ (ISO 26000,
Subclause 6.3.2.2).

Addressing adverse impacts on human rights means undertaking

adequate measures for the prevention, mitigation and remediation, if
appropriate, of those impacts.14 Importantly, supporting the enjoyment of
human rights does not compensate for a failure to respect human rights
within an organization’s core operations or activities. For example, a real
estate company in Sweden that donates money to a local school project
cannot thereby compensate for its failure to respect its own employees’
rights to collective bargaining.

Within Subclause 6.3 there are eight issues. Each one is commented upon
below,15 but the reader is advised to read the standard itself and the UN
Framework together.

Human rights due diligence16

Human rights due diligence is at the core of respect for human rights.
Organizations are requested to conduct a human rights due diligence
exercise in order to identify, prevent, mitigate and account for how they
deal with adverse impacts. This process requires that both actual and
potential impacts on human rights are assessed. Potential adverse impacts
– that is, risks to human rights – should be addressed by prevention or
mitigation, whereas actual impacts – infringements that have already
happened – should be remedied. Due diligence should cover any impacts
that the organization causes, contributes to, or is linked to directly or
through its relationships.

13
UNGP Report 2011, above n. 9, p. 13, para 11.
14
Ibid., p. 13, para 11.
15
Refer to the UN Reports discussed in this chapter and ISO 26000 for sources below and
further information.
16
UNGP Report 2011, above n. 9, paras 15, 17–21.

14 Understanding ISO 26000

 Human rights and social responsibility

Due diligence can be included in other company risk management

systems but it must include risks to the individuals who hold the rights
and not only risks to the company.

When a company identifies and assesses its impact on human rights, it

should seek to draw on human rights expertise and also engage in
relevant stakeholder consultation, for example, with affected groups. The
result of the assessment informs the subsequent steps of the process. To
prevent and mitigate adverse impact, the findings of the impact
assessment should be integrated into the processes and functions of the
organization, and accompanied by appropriate action.

Where an organization has a large number of entities in its value chain

making it unreasonably challenging to conduct human rights due
diligence for all of them, the UN Guiding Principles recommend that it
should identify the areas where the risk for adverse impact is most
significant.

The complexity of the due diligence will vary depending on the size,
nature and context of the operations and the risk of severe impact on
human rights. Furthermore, the due diligence should not be static: it
should be ongoing since challenges change over time and contexts
evolve. Due diligence should preferably be considered early in the
development of a new activity or project.

Human rights risk situations

Human rights risk situations are circumstances in which organizations are
likely to face a heightened risk of negatively impacting human rights.
Examples include operating in areas affected by conflict or failed states,
poverty, drought, operating in proximity to communities of indigenous
peoples, or undertaking activities that affect children (ISO 26000,
Subclause 6.3.4.1).

Avoidance of complicity
‘Complicity’ in the context of social responsibility is understood to
include, and to go beyond, the legal meaning of the concept. Society
may perceive an organization to be complicit in the acts of another party
if, for example, it benefits from the abuse of the other or remains silent
in the face of human rights abuse committed by another – for example,
where an organization does not speak out against systematic
discrimination of certain groups in employment law. Issues relating to
complicity will arise when an organization is seen to contribute to human
rights abuse caused by others.17 (See ISO 26000, Subclause 6.3.5.1.)

17
Ibid., p. 17, para 17.

Understanding ISO 26000 15

Part I – ISO 26000 Issues

The UN Guiding Principles specify that companies should always ‘treat the
risk of causing or contributing to gross human rights abuses as a legal
compliance issue wherever they operate’.18 In particular, this is relevant
for organizations acting in areas affected by conflict.

Resolving grievances
The UN Guiding Principles define a grievance as a perceived injustice
evoking a person’s sense of entitlement, and a grievance mechanism as a
process whereby grievances regarding business-related impacts on human
rights can be raised and a remedy sought.19

Access to a remedy is a central part of the solution to the business and

human rights challenge, and is therefore one of the three pillars of the
UN Framework. The state must ensure that rights holders who have been
harmed have access to an effective remedy. The guidance provided in
ISO 26000 that non-state actors establish grievance mechanisms is not
meant to replace or in any way undermine or prejudice any state judicial
or non-judicial mechanism. A non-state based grievance mechanism can
support an organization in its ongoing due diligence because it provides
an opportunity for the organization to identify systemic problems and
trends in complaints. Furthermore, grievances can enable the
organization to address and remediate impacts early, thus preventing
their increase.20

A grievance mechanism should be legitimate, accessible, predictable,

equitable and transparent. It should be rights-compatible, which in effect
means that it should make sure that outcomes and remedies are in
accordance with internationally recognized human rights. It should also
be a source of learning, so that the mechanism is improved and more
effectively prevents future grievances and harm. The mechanism should
be based on dialogue and engagement.21

Discrimination and vulnerable groups

ISO 26000 defines discrimination as a distinction, exclusion or preference
that is based on prejudice and removes equality of treatment or
opportunity. It lists examples of illegitimate grounds for discrimination.
There was much discussion in the ISO 26000 Working Group as to what
grounds should be included as examples. Some proposals came from
experts to include examples that were recognized (as illegal) in one
country but not another. The list should, as it states, be read

18
Ibid., p. 21, para 23.
19
Ibid., p. 22, para 25.
20
Ibid., p. 25, para 29.
21
Ibid., p. 26, para 31.

16 Understanding ISO 26000

 Human rights and social responsibility

non-exhaustively. The purpose is the equality of all human beings; as the

Universal Declaration of Human Rights (UDHR) states: ‘all human beings
are born free and equal in dignity and rights’ (article 1, UDHR) and that
‘everyone is entitled to all the rights and freedoms set forth in this
Declaration, without distinction of any kind…’ (article 2, UDHR), because
‘recognition of the inherent dignity and of the equal and inalienable
rights of all members of the human family is the foundation of freedom,
justice and peace in the world’ (preamble, UDHR). Discrimination can also
be indirect.

Organizations are requested to pay particular attention to vulnerable

groups, who are thus at increased risk of harm, marginalization or other
adverse human rights impact. The standard lists as examples women and
girls, people with disabilities, children, indigenous peoples, migrants,
migrant workers and their families, people discriminated against on the
basis of descent, including on the basis of caste, religious groups, people
discriminated against on the basis of race, minorities, the elderly, the
poor and people living with HIV/AIDS.

Case study: The sexual exploitation of children

Sexual exploitation takes place worldwide and children are

particularly vulnerable. Corporate responsibility to respect
human rights in this field considers children’s rights to
protection against sexual exploitation (article 34, Convention
on the Rights of the Child and the Optional Protocol to the
Convention on the Rights of the Child on the sale of children,
child prostitution and child pornography). Where corporate
activities are implicated, there are a number of examples of
how companies attempt to prevent and mitigate abuse and
avoid involvement. In the travel and tourism industry, ECPAT
Sweden22 initiated a Code of Conduct for the Protection of
Children from Sexual Exploitation in Travel and Tourism for tour
operators. The aim is to prevent sex offences in connection to
travel and to protect children. Some companies in the IT sector
have reduced access to child pornography online, thereby
hindering new and repeated abuse of children. Similarly, actors
in the financial sector are hindering the profitability

22
ECPAT stands for End Child Prostitution, Child Pornography and Trafficking in Children for
Sexual Purposes. ECPAT is a network of organizations working to eliminate commercial
sexual exploitation of children, and is represented in over 80 countries worldwide with its
secretariat in Bangkok. It is an established non-governmental organization working against
all forms of commercial sexual exploitation of children. The problem exists globally.
Although reliable data and statistics are hard to find, it is a global trade that involves
millions of children, as estimated by the UN.

Understanding ISO 26000 17

Part I – ISO 26000 Issues

of commercial child pornography, thus preventing the abuse of

children. Some companies in the transportation business are
attempting to prevent their operations to be used for the
trafficking of human beings.

Civil and political rights and economic, social and cultural

rights
The two clauses on civil and political rights and economic, social and
cultural rights are explanatory and illustrative. The clause on economic,
social and cultural rights contains examples on how organizations can
respect and contribute to rights. Yet, note again that the responsibility to
respect human rights is valid for all human rights.

Fundamental principles and rights at work

Rights at work are considered to be basic human rights. ISO 26000 lists
four examples, as identified by the ILO. They are:

• freedom of association and effective recognition of the right to

collective bargaining;
• elimination of all forms of forced or compulsory labour;
• effective abolition of child labour; and
• elimination of discrimination regarding employment and occupation.

Is voluntary guidance for non-state actors on human rights

enough?
Some civil society organizations have been critical of the UN Framework
and subsequent reports, warning that further guidance is needed to close
the governance gaps identified to be the root cause of business and
human rights challenges. The criticism has inter alia demanded stronger
language, binding obligations, monitoring and stronger focus on an
effective remedy through judicial mechanisms. Furthermore, more
guidance should be provided on a gender perspective and vulnerable
groups.23 Hopefully more NGOs in the field of human rights will, in
future, participate in revisions to ISO 26000. That would increase support
for the text and improve its guidance on important aspects.

23
Joint Civil Society Organisations (CSO) Statement on UN Guiding Principles, signed by e.g.
Amnesty International, Human Rights Watch and International Commission of Jurists in
January 2011, available at http://www.fidh.org/IMG/pdf/Joint_CSO_Statement_on_GPs.pdf

18 Understanding ISO 26000

 Human rights and social responsibility

Binding rules are necessary for companies and other actors that impact
human rights adversely. Yet, the UN Framework and the UNGPs, together
with ISO 26000, establish a common platform and provide both a
common terminology and a foundation to build on. The UN Framework
provides an authoritative statement and elaboration on business
responsibility for human rights and sets a common base for what, at the
very least, should be expected. That it was needed and anticipated is
evidenced by the process of drafting the human rights components of
ISO 26000 and the way in which, when introduced in 2008, the
responsibility to respect was overwhelmingly supported by the ISO 26000
Working Group, which improved the content and obtained agreement
for the components of ISO 26000 that deal with human rights.24

24
See further statement of Chris Jochnick, Oxfam America, 11 February 2011, available at
http://politicsofpoverty.oxfamamerica.org/index.php/2011/02/11/making-headway-on-
business-and-human-rights/

Understanding ISO 26000 19

Labour practices25
Dwight W. Justice

The most important message of ISO 26000 is that it is not for

organizations unilaterally to define their responsibilities to society. This
message is found throughout the standard and is explicit in Subclauses
3.3.2 and 3.3.3 on the topic of understanding social responsibility. Indeed,
this message is the reason for Clause 6, containing over one half of the
body of the standard. Clause 6 is a summation of societal expectations of
responsible behaviour in six areas identified as ‘core subjects’. One reason
for ISO 26000 not being a management process standard is that the
centrality of this message would be lost or misunderstood.

After careful consideration, it was agreed that the references to societal

expectations in Clause 6 would be limited to instruments adopted by
authoritative intergovernmental organizations in the form of treaties,
declaration and conventions and, because this standard is an ISO product,
to other ISO standards. The status given to authoritative
intergovernmental instruments reinforces another key message of
ISO 26000 – the importance of international norms of behaviour, which is
expressed as a Principle in Subclause 4.7 and found throughout
ISO 26000.

Subclause 6.4 on the subject of labour practices should be read with

these two ideas in mind. Subclause 6.4 sets out a comprehensive
summation of societal expectations concerning responsible behaviour
toward persons who work. Compared to some of the other subclauses in
Clause 6, the labour practices subclause is more detailed and, because it is
both comprehensive and concise, may seem dense. The societal interest in
labour practices is deep, broad, well understood and manifest in both
legally binding and moral obligations. Labour practices involve conflicting
interests that cannot always be reconciled on a ‘win–win’ basis. Laws and
other systems of governance are needed. There is a societal interest in
the fair treatment of persons who work that transcends the interests of
the workers concerned. This can be described as ‘social justice’ and is the
essence of the social dimension of sustainable development.

International labour standards

Subclause 6.4 is the most documented subclause of ISO 26000, with
multiple references to international standards. This is because it is, for

25
Labour practices are the subject of Subclause 6.4 of ISO 26000.

Understanding ISO 26000 21

Part I – ISO 26000 Issues

the most part, based on the international labour standards set by the
International Labour Organization (ILO). An important message of 6.4 –
explicit in Box 8 and implicit in the large number of footnotes to the
labour practices subclause – is that there is an authoritative international
organization established for the purpose of setting standards for the
world of work: the ILO. It was important that, in setting a standard on
social responsibility, the ISO would not, in effect, be usurping the role of
the ILO.

Unlike ISO, the ILO was designed to set standards on social policy where
the representativeness of the parties, and not expertise, is essential for
credibility. Participation in the ILO process is for the most representative
organizations of workers and employers together with governments from
183 countries. It is this near universal participation of the most
representative organizations that makes the ILO credible in deciding
standards that involve public policy. The ISO processes are not credible for
such standards. ISO 26000 was developed with an acceptance of the role
of the ILO, which is clearly recognized in the standard. ISO 26000 is
consistent with ILO standards and other ILO instruments.

The international labour standards of the ILO are addressed to

governments, which are encouraged to ratify and apply them. Indeed,
the ILO has a supervisory mechanism to oversee and encourage the
application of conventions by governments. As with many other
authoritative intergovernmental instruments referenced in ISO 26000, the
content of the instrument can provide a basis or guidance for the
responsible behaviour of organizations even though the instrument itself
may have been addressed to governments. The ILO Tripartite Declaration
of Principles concerning Multinational Enterprises and Social Policy (ILO
MNE Declaration) is a clear statement by workers, employers and
governments that the principles underlying many specific international
labour standards can be applied to business organizations. Moreover, the
ILO MNE Declaration is the most authoritative and universally applicable
statement of the relationship of business to development. The ILO MNE
Declaration, together with the OECD Guidelines for Multinational
Enterprises – also referenced in ISO 26000 – constitute the two most
authoritative international instruments addressing the social responsibility
of business.

The scope of labour practices and their relationship to

human rights
The responsibilities of an organization with respect to labour practices
involve ‘all policies and practices related to work performed by or on
behalf of the organization’. Subclause 6.4 is not limited to the
responsibilities of an organization at its workplace or to persons who are
directly employed by the organization concerned.

22 Understanding ISO 26000

 Labour practices

The labour practices clause will come as a surprise for persons expecting
to find labour issues treated in the way that they are most often treated
at CSR conferences. The CSR treatment of labour practices tends to focus
on how companies respond to negative publicity about abuse and
exploitation of workers in their supply chain, on their efforts to attract or
retain core personnel and by philanthropic activities involving employees
in charitable programmes. The scope of the subject goes well beyond
these issues and in Clause 6 the focus is on the societal interest.

Some issues, such as health and safety as well as training and human
development, are also dealt with in other Clause 6 subjects. The
treatment of these subjects in this clause focuses on the relationship with
work.

The most important overlap within ISO 26000 is between Subclause 6.4
on labour practices on the one hand, and Subclause 6.3 on human rights
on the other. These subjects are not mutually exclusive and the
distinction is somewhat arbitrary. Most labour practices involve human
rights issues. Indeed, when the entire range of human rights – including
civil and political rights as well as economic, cultural and social rights – is
taken into account, then the social dimension of sustainable development
can fairly be said to be covered. The question, then, is how to organize
these issues. In its clause on ‘principles and considerations’ the labour
practices subclause recalls that ‘ILO conventions and recommendations
complement and reinforce various provisions in the Universal Declaration
of Human Rights and its two covenants’. Many international labour
standards are authoritative efforts to provide greater meaning and detail
to the human rights set out in the International Bill of Human Rights.

Subclause 6.3 on human rights contains a subclause on ‘fundamental

principles and rights at work’. The four human rights dealt with under
this issue in 6.3.10 are based on the ILO’s Declaration on the
Fundamental Principles and Rights at Work, which was adopted in 1998.
This Declaration constitutes a formal understanding by governments that
accountability for the respect of these rights is part of their ILO
membership obligation.

Of special note is the right of freedom of association, which, in this

context, is mainly about the right of workers to form and join trade
unions. Freedom of association is an enabling right without which many
other rights may not be possible to realize. Long before the adoption of
the 1998 ILO Fundamental Rights Declaration, freedom of association and
the right of workers to organize into trade unions and to bargain
collectively were considered to be addressed by the ILO Constitution and,
therefore, relevant to ILO membership. The ILO Committee on Freedom
of Association, established in 1951, applies the same principles when
examining complaints regardless of whether a country has ratified the
relevant conventions.

Understanding ISO 26000 23

Part I – ISO 26000 Issues

Many codes of conduct addressing supply chain labour practices include

the human rights identified in the 1998 ILO Fundamental Rights
Declaration. This is positive because these codes are based on
international labour standards accepted in principle by almost every
government in the world. An organization insisting on respect for these
rights by its partners and suppliers cannot fairly be accused of imposing
cultural values. Less positive is that this short list of rights has become for
many the only labour practices that an organization must address to be
considered responsible. This is far from the case.

Within the ILO understanding is evolving. In 2008, the ILO Declaration on

Social Justice and Fair Globalization was adopted, which added to the list
of rights that are considered to be linked to ILO membership. These
include rights in such areas as employment, social security and
occupational health and safety.

In the end, placing the fundamental rights at work in Subclause 6.3 is a

way of reinforcing the fact that the human rights of workers must be
treated as a human rights issue. However, Subclause 6.4 on labour
practices makes clear that the responsibilities of organizations to workers
also include a very broad range of human rights that go beyond the list
in Subclause 6.3.

The relationship between labour practices and human rights is best

captured by the principle described in 6.4.2.1 that ‘labour is not a
commodity’. As explained here this means that workers should not be
subject to the same market forces as commodities and this is because of
their human rights. One essential ingredient in socially responsible labour
practices is recognition that the labour market is not the same as other
markets and that the same rules do not apply.

The five labour practice issues

Subclause 6.4 organizes the subject into five issues:

• employment and employment relationships;

• conditions of work and social protection;
• social dialogue;
• health and safety at work; and
• human development and training.

This is a logical, comprehensive and knowledgeable organization.

However, the interdependence of these issues should be recognized. The
following comments on the five issues are intended to suggest some of
this interdependence.

24 Understanding ISO 26000

 Labour practices

Subclause 6.4.3 Employment and employment relationships

This subclause really addresses two closely related issues. The first is
employment – that is, the creation of jobs. This is one of an
organization’s most important contributions to society. The societal
interest is not limited to the number of jobs created, but also includes
whether these jobs are good jobs. Of particular note in this regard is the
importance given here to job security. The clause calls upon organizations
to recognize the importance of secure employment to society and
provides specific means as to how this can be done:

• by avoiding the use of work performed on a casual basis;

• by avoiding the excessive use of temporary work;
• by mitigating as much as possible the negative employment effects
of changes in operations; and
• by eliminating arbitrary or discriminatory dismissal practices.

The other issue addressed in 6.4.3 concerns the relationship under which
work is performed. Ensuring that work is performed within the
appropriate legal framework is arguably the single most important
responsibility of any organization with respect to persons who work. This
is because the legal framework will determine the nature and extent to
which the worker is protected by law and greatly affect the ability of the
worker to defend and advance his or her interests.

In every country there is the recognition that most workers are in a

position of dependency and subordination to the organization for which
they work and are, therefore, particularly vulnerable to exploitation and
abuse. Such workers are considered to be in an employment relationship
that is the basis for a distinct form of law – labour law, which, unlike
commercial law, recognizes and takes into account the differences in
power among the parties to a contract. The employment relationship is
the means by which society protects its interest in the fairness and
stability of the most essential economic relationship. This distinction in
law is the most important way in which the state recognizes that ‘labour
is not a commodity’.

In recent years many organizations have sought to avoid the obligations

that law imposes on the employer. This has led to a dramatic increase in
precarious work. Precarious work refers to work with high degrees of job
insecurity usually accompanied by low wages, fewer benefits, higher
health and safety risks and an absence of, or reduced, social protection.
Whether work is precarious work is often determined by the relationship
under which work is performed and the conditions of work that arise
from this relationship – for instance, through atypical contracts of
employment through work arranged through intermediaries or
performed on a casual or informal basis. Employers deliberately disguise
what should be an employment relationship by treating the workers as
being self-employed.

Understanding ISO 26000 25

Part I – ISO 26000 Issues

Promoters of corporate social responsibility nearly always seek to focus

exclusively on non-legally binding activities. This ‘icing on the cake’
approach overlooks the essence of social responsibility which concerns
accountability for the impact of an organization’s actions on society.
Compliance with the law must not be assumed. Many organizations do
not obey the law or attempt to evade its intent. Many organizations
operate in environments where the law is not enforced or where there is
no culture of compliance with law.

There can be ‘grey areas’ in the interpretation of the law – especially

where the law has not caught up with developments in the real world. It
is increasingly difficult to distinguish self-employed workers from those
who need the legal protection of labour law that comes from a
recognized employment relationship. Moreover, there has been a growth
of work performed outside of any legal framework on an ‘informal’
basis. Even where it may be theoretically possible, including where it is
mandated by law, to respect rights in these relationships, it can be
difficult for standards to be effectively applied and enforced.

Understanding the societal interest in labour law is the first responsibility

of organizations with respect to persons performing work. The first
expectation is that organizations should ‘be confident that all work is
performed by women or men who are legally recognized as employees or
who are legally recognized as being self-employed’.

Subclause 6.4 on labour practices is very much in line with the evolution
of thinking on human rights. Work on ISO 26000 had been going on for
a significant time before Professor Ruggie released the ‘Protect, Respect
and Remedy Framework for Business and Human Rights’ that has been
adopted by the UN Human Rights Council. Changes were made to bring
ISO 26000 in line with this important development. However, it was not
necessary to change the labour practices subclause as the most important
ideas in the UN Framework – due diligence and complicity – were already
present even though expressed in somewhat different terms. Due
diligence is reflected in the expectations that an organization ‘be
confident’ (that work is performed in a legal relationship) or to ‘take
steps to ensure’ (that work is contracted only to organizations legally
recognized or otherwise able to assume the responsibilities of an
employer and to provide decent working conditions). The idea of
complicity is present in the expectation that an organization should ‘not
benefit from unfair, exploitative or abusive labour practices’.

Subclause 6.4.4 Conditions of work and social protection

This subclause provides a comprehensive view of what should be
considered by organizations and it references many ILO instruments. The
first paragraph provides examples of many conditions of work such as
‘compensation, working time, rest periods, holidays, disciplinary and

26 Understanding ISO 26000

 Labour practices

dismissal practices and maternity protection’ and so on. It recognizes that

conditions of work are determined by a variety of means – such as by
law, or by agreements between employers and employees through, for
example, collective bargaining. Of course, many of the conditions of
work are determined either directly or indirectly by the employer.

There can be a close relationship between the various conditions of work.

This is certainly true for compensation and working time, which must be
treated together and are the subject of most of the expectations
provided in this subclause. Respect for family responsibilities, another
condition of work that is addressed in 6.4.4.2, is also closely related to
compensation and working time.

Not everyone will be familiar with the term ‘social protection’, which is
defined in 6.4.4.1. Social protection is critical to social justice. Although it
is true that, in most cases, the primary responsibility for social protection
will be the state, organizations also have responsibilities. Where
organizations avoid the obligations of the employer they may be denying
workers access to the social protection to which they should be entitled.
Disguising an employment relationship or contracting out work to a
labour intermediary unable to meet the obligations of the employer
under law diminishes the coverage of social protection and creates a
burden for society. The issue of social protection is about ensuring that
work is performed within the intended legal framework.

Subclause 6.4.5 Social dialogue

In one way or another, the interest in the social responsibility of
organizations is related to today’s governance crises. There is a failure to
develop at the global level the governance institutions suitable for a
global economy and for the environmental challenges that must be
addressed globally. In many countries governments fail to fulfil their
responsibilities and non-state governance institutions either fail to
function properly or are not developed.

Labour protection and the human rights of workers are two areas greatly
affected by the governance crises. The now familiar reports of extreme
abuse and the appalling exploitation of workers in supply chains concern
situations that can be traced to a failure of governments and often to
political repression. Exploitation and abuse are inevitable in the absence
of the rule of law or where there is no culture of compliance with law.

The failure of governments to protect workers is not always for the

purpose of attracting investment or reducing labour costs. Governments
suppress workers’ organizations to stifle democracy. In both cases there
are social responsibilities for business and other organizations. One
responsibility is to not make matters worse, for instance, by encouraging
governments to abandon their obligations to protect workers. Another is

Understanding ISO 26000 27

Part I – ISO 26000 Issues

to take positive measures to strengthen respect for the rule of law and to
support non-state governance institutions that also have this effect.

Social dialogue is a term for practices that in many countries are also
important governance institutions. Social dialogue is based on democratic
principles and is supportive of the rule of law. Subclause 6.4.3 contains a
concise explanation of social dialogue, which can take many forms. Some
involve the participation of the government and others involve only
private parties. Collective bargaining is the most important form of social
dialogue.

Even where the government is not a party in social dialogue, it usually

has an important role in promoting it. For instance, collective bargaining
rarely occurs outside of a legal framework that protects and promotes
the right of workers to form or join trade unions and to bargain
collectively. Moreover, it is usually through legally recognized
relationships of employer and employee that the parties to bargaining,
and the right to bargain, are protected.

The two essential elements of social dialogue are engaging the

workforce on a collective basis and the independence of the parties in
the dialogue. These elements are why social dialogue can address the
governance deficit. The social dialogue interlocutors are usually
management or employers’ organizations, on the one hand, and trade
unions on the other. Subclause 6.4.5.1 recognizes that for the workforce
to be engaged collectively, through genuine and independent worker
representatives, such representatives must be freely elected. This usually
means by trade union members but it can also be through legally
mandated elections that are independent of the employer. Such elections
are part of the industrial relations systems in a number of countries.

Some have argued that, because most workers are not in trade unions,
social dialogue and collective bargaining will not be relevant for most
organizations. The relationship of organizational responsibility to trade
unions and social dialogue is based on respect for human rights and
support for good governance. Trade unions are very dependent on
respect for those civil and political rights related to freedom of
association. In many countries, governments fail to protect workers
seeking to form or join trade unions and permit employers to thwart
trade union organizing and refuse to recognize genuine trade unions
that seek to bargain. Governments can suppress trade unions or
dominate labour organizations established to prevent trade unions.
However, as the UN Guiding Principles on Business and Human Rights
make clear, the obligations of organizations to respect human rights are
independent of the state’s duty to protect human rights.

Respecting human rights requires organizations to refrain from activities

that have a negative impact on the human rights of others. However,
some human rights cannot be respected without positive action on the

28 Understanding ISO 26000

 Labour practices

part of the organization. The internationally recognized right of workers

to bargain collectively cannot be exercised unilaterally by workers and
cannot be respected by employers simply by refraining from activity. For
the right to collective bargaining to be realized requires the recognition
of a legitimate representative trade union by the employer and the
willingness of the employer to bargain in good faith. Subclause 6.4.5.2
provides organizations with the positive actions that they should take
beyond respecting the right of workers to organize into trade unions.
Organizations should provide worker representatives with ‘access to
authorized decision makers, to workplaces, to the workers they
represent, to facilities necessary to perform their role and to information
that will allow them to have a true and fair picture of the organization’s
finances and activities’. These are positive actions required of
organizations to respect the human right of workers to bargain
collectively.

Human resources management includes industrial relations. Mature

industrial relations are based on enlightened self-interest. Enlightened
management recognizes that employees will have both common and
conflicting interests with management. It is through social dialogue that
the parties anticipate disputes and establish an orderly process to try to
avoid disputes as well as to resolve them should they arise. The
commentary on non-state based grievance mechanisms in the UN Guiding
Principles is clear that such mechanisms ‘should not be used to undermine
the role of legitimate trade unions in addressing labour-related disputes’.

Subclause 6.4.5 anticipates the growth of social dialogue at the

international level. Indeed, recent years have seen the emergence and
growth of formal agreements between multinational enterprises and
international trade union organizations referred to as ‘international
framework agreements’ or ‘global framework agreements’.

The title of this clause may cause some confusion for persons unfamiliar
with labour–management relations. For some it may be confused with
relations with civil society organizations, including NGOs, or with
stakeholder engagement in general. Social dialogue, together with
industrial relations and collective bargaining, can be considered as forms
of stakeholder engagement. However, social dialogue is a term reserved
for relations between management and labour. It is based on the idea
that companies consist not only of management but also of workers.
These two groups were referred to historically as the ‘social partners’ and
this terminology is used in a number of countries today and by such
international organizations as the ILO, the OECD and the European
Union. The definition of social dialogue used in ISO 26000 is the same as
that used by the ILO. The term ‘civil society dialogue’ or ‘civil dialogue’ is
sometimes used to refer to dialogue involving civil society organizations.

Understanding ISO 26000 29

Part I – ISO 26000 Issues

Subclause 6.4.6 Health and safety at work

The responsibility of an organization for the health and safety of those
who work on its behalf is fundamental and deserves to be treated as a
distinct issue. The scope of the issue in ISO 26000 goes well beyond the
prevention of workplace accidents and is about ‘the promotion and
maintenance of the highest degree of physical, mental and social
well-being of workers and prevention of harm to health caused by
working conditions’. The scope explicitly includes the psychological needs
of workers as well as their physiological needs in the context of the
adaption of the occupational environment to workers’ needs. In this
regard organizations are expected to ‘strive to eliminate psychosocial
hazards in the workplace which contribute or lead to stress and illness’.

The first expectation is that organizations will ‘develop, implement and

maintain an occupational health and safety policy’. This is followed by a
series of expectations that cover the established principles of industrial
hygiene, including the hierarchy of controls. Of special note is the
recognition that health and safety risks can affect women and men
differently. Another point to note is the recognition that protection must
be provided equally. Too often, organizations fail to provide the training
and protection to part-time or temporary or subcontracted workers.

This responsibility for health and safety is easily linked to respect for
human rights such as the right to life and the security of the person.
Fulfilling this responsibility involves respecting a range of rights that the
workers concerned have with respect to their own safety and health.
Subclause 6.4.6.2 spells out the rights of workers in this regard – to
information, to be consulted, to refuse dangerous work, to obtain
outside advice, to report to the authorities, to participate in health and
safety decisions and activities and, importantly, to be free from threats
for exercising these rights. Workplaces where the workers are involved in
health and safety and where these rights are respected are demonstrably
safer places to work than places where health and safety is treated as a
‘top down’ management process. Subclause 6.4.6 concludes with a text
box on joint labour–management health and safety committees as an
example of good practice.

Subclause 6.4.7 Human development and training

There has been a deep interest in the role that business organizations,
especially large corporations, can play in human resource development
and training. The OECD Guidelines call upon multinational enterprises ‘to
encourage human capital formation, in particular by creating
employment opportunities and facilitating training opportunities for
employees’. The ILO MNE Declaration devotes a chapter to the subject in
which multinational enterprises are expected to provide training for their

30 Understanding ISO 26000

 Labour practices

employees ‘to meet the needs of the enterprise as well as the

development policies of the country’.

The societal interest is captured here by the term ‘development’. There is

overlap with Subclause 6.8.5 relating to employment creation and skill
development. The difference between these subclauses is that 6.4.7
concerns persons performing work for the organization, and 6.8.5
concerns contributions in this area to the broader community.

Subclause 6.4.7.1 provides a very good definition of ‘human

development’. It also provides an authoritative definition of the term
‘employability’ as used in the ILO.

Links between the human rights clause and with other parts of the
labour practices clause can be made. One concerns discrimination with
regard to access to development and training. Another concerns the
nature of the relationship between the workers concerned and the
organization. Organizations will be more inclined to invest in workers
who are regular full-time employees. Under-investment in human
resource development, often found when workers are seen as being
disposable, is another cost to society.

Conclusion
The area of labour practices has been one where CSR initiatives and
activities have been used by businesses to redefine or reinterpret their
responsibilities to persons who work so as to make them seem less in fact
than they are. The importance of the legal framework, of institutions for
addressing conflict and of the relationship to human rights and social
justice is rarely correctly stated in the treatment of labour in CSR
discourse. ISO 26000 provides a welcome antidote. It is the best concise,
yet comprehensive, statement on social responsibility and labour to date.

Understanding ISO 26000 31

Should we take responsibility for the environment
– or for ourselves?26
Adrian Henriques

Environmental responsibility is a precondition for the survival and

prosperity of human beings. (ISO 2010, p. 41)

‘The environment’ is but one of the seven core subjects identified in

ISO 26000. Yet, as the standard makes clear, dealing successfully with the
environment underpins not only the prosperity but possibly also the
survival of humanity. It is therefore a subject that in one sense underlies
all the others.

This chapter will look at how responsibility for the environment is treated
in the standard: its key achievements, whether there are significant
aspects of the subject that have been neglected and what the future
development of the standard might address. Throughout, but especially
in considering the future, the various meanings of responsibility should
be borne in mind: Do organizations have a positive duty to be
responsible for ensuring that ecological systems are maintained? Or do
they only have responsibility for limiting the negative consequences of
their actions? Are they responsible for the environment, or for
themselves?

The environment in ISO 26000

There is no directly environmental member of the general principles of
social responsibility. However, the general principle of accountability –
and the definition of ‘social responsibility’ itself – explicitly state that
organizations should be responsible and accountable for their impacts on
the environment and should contribute to sustainable development.

The principles within Subclause 6.5, which deals with the environment as
a core subject, are:

• environmental responsibility;
• the precautionary approach;
• environmental risk management;
• the polluter pays principle.

26
The environment is the subject of Subclause 6.5 of ISO 26000.

Understanding ISO 26000 33

Part I – ISO 26000 Issues

These principles are largely concerned with limiting environmental

damage, rather than with a positive duty to improve the state of the
environment. Limiting damage is perhaps the most immediate concern,
but it should not necessarily be the only one. Of particular note amongst
the principles is the inclusion of the precautionary approach. This
principle was hotly debated until the end of the very last day of the last
Working Group meeting.

One of the reasons why it was so debated is the difficulty of identifying

an appropriate and definitive version of the principle. It was originally
formulated during the 1992 Rio Convention on Climate Change (United
Nations 1992); it has subsequently been extensively reformulated,
including within the Cartagena Protocol (United Nations 2000) and the
UN Global Compact (GC 2008). Perhaps the reason why these
reformulations matter, however, is the issue of the cost implications of
precaution. Within ISO 26000, the precautionary principle refers to the
‘cost-effectiveness’ of measures designed to prevent environmental
damage. Yet exactly what cost-effectiveness should mean in this context
was not easy to determine. The final resolution was that it should not be
confined to the short-term costs alone that are typically included in
business cases.

The standard also describes a number of ‘considerations’ that

organizations should assess or adopt in their environmental management
approach. Amongst others, these include a life-cycle approach, impact
assessment, sustainable procurement and a shift from products to
services. Overall, the considerations encourage a broadening of the scope
of likely impacts beyond those directly entailed by considering only the
immediate consequences of an organization’s operations, such as its
consumption of energy. However, the considerations also include
eco-efficiency and clean technologies, which are most relevant to an
operations perspective. Yet none of the considerations entail moving very
far beyond the strategy of limiting negative impacts.

ISO 26000 describes only four ‘environmental issues’. These are:

• the prevention of pollution;

• sustainable resource use;
• climate change mitigation and adaptation;
• protection of the environment, biodiversity and restoration of
natural habitats.

Of course, these issues are extremely high level and it is difficult to

identify an issue of environmental concern that could not fall within one
of these four headings. Concerns over nuclear reactors after the
Fukushima incident following the earthquake and tsunami, for example,
would be included at least under the prevention of pollution and also

34 Understanding ISO 26000

 Should we take responsibility for the environment – or for ourselves?

relate to sustainable resource use. And it is appropriate that climate

change, being the single most significant environmental issue facing
humanity, receives an issue to itself.

Each of these issues is described and then a set of ‘related actions and
expectations’ for organizations is listed. For the most part, the listed
actions are effectively elements of what an organization needs to do to
manage its impact effectively, beginning with identifying and measuring
its impacts in each area. The approach again is to limit negative impact.

The fourth issue comes closest to a positive approach. In protecting the

environment and biodiversity and restoring natural habitats, emphasis is
placed on supporting ecosystems as opposed to merely limiting the
damage done to them. The text of the standard points out that
ecosystems and biodiversity provide important services to humanity and
should be valued and protected. A number of ways in which this can be
done are identified, including protecting wild habitats and promoting
‘sound’ urban development.

What does ISO 26000 leave out?

ISO 26000 adopts an approach in which the responsibility of
organizations is primarily to limit their negative impacts. While this may
be incomplete, it is understandable. If the responsibility of an
organization were framed in terms of adding to its positive impact, then
the constant question would be: How far should it go? If, instead of
reducing carbon dioxide production, for example, the challenge was to
remove carbon from the atmosphere, how much should each
organization remove?

What can be done is to establish a principle of respect for the

environment. Whereas respect for human rights, for example, is one of
the foundation principles of social responsibility, there is no
corresponding principle enjoining respect for the environment. There
could be. This is perhaps the most significant thing from an
environmental perspective, which is not found in ISO 26000.

It is also significant that there is no definition of sustainability in the

standard. Social responsibility is framed in terms of contributions to
sustainable development, for which the Brundtland definition is given.
But sustainability itself is not defined. Of course, this is not surprising:
there have been numerous attempts to define ‘sustainability’ but there is
no consensus. The reason for that is no doubt largely because, while the
desirability of sustainability is widely acknowledged, there is no clarity on
what it would mean in practice. In this context it is interesting to note
that in formulating a guide for standards writers, ISO is working towards
just such a definition (ISO 2011).

Understanding ISO 26000 35

Part I – ISO 26000 Issues

There are, of course, numerous far more specific matters that are not
covered in the environmental clause of ISO 26000. Many could be
regarded as detailed instances of more general concerns that are
mentioned. But there are also a number of methods of analysis or
approach that might have been vigorously debated during the course of
the standard’s development, but did not make it into the final version.
Some of these include:

• The business case. Perhaps surprisingly, there is almost no direct

discussion of the business case for environmental responsibility – or
for social responsibility more broadly. One reason for that was the
desire to concentrate on the ethical perspective, without
consideration of any motive for acting ethically. Of course, for any
organization, how far, how fast and in what way ethical concerns are
addressed will, in practice, be influenced by how any suggested
ethical course will affect its core business.
• Accounting for impact. From a technical point of view, the standard
focuses on impacts interpreted as transactions with the environment,
but not with their cumulative effects. In this it is like a company that
records all its sales but does not analyse the return on capital it is
obtaining. To get an accurate accounting for environmental
consequences it is important to have both a current and a capital
accounting.
• Systemic relationships. ISO 26000 does urge that life-cycle thinking is
applied by organizations to their products and services. However, the
same systemic approach can also be applied to the connections
between organizations. From this perspective the waste from one
process, for example, can form the raw material for another. Of
course, this concerns the relationships between several organizations
rather than the responsibilities of one alone. It could legitimately be
regarded therefore as the subject of government policy, rather than
of ISO 26000.

This discussion has focused so far mainly on what may be found within
Subclause 6.5 of ISO 26000. But, in fact, environmental issues and
concerns may also be found throughout the document. Subclause 6.4.6
concerns health and safety at work. This, of course, includes the impact
of environmental factors on worker’s health and safety. Similarly
Subclause 6.7.4 addresses the protection of consumer health and safety
and other parts concern labelling and information provision of which
environmental information is a key component.

Environmental issues are also central to the subject of Subclause 6.7.5,

which concerns sustainable consumption. In fact, it could be argued that
the real subject of the main environmental subclause (6.5) is sustainable
production. Sustainable consumption and sustainable production go hand
in hand. Sustainable consumption in general has been treated as an
accompaniment to sustainable production enjoying much less attention.

36 Understanding ISO 26000

 Should we take responsibility for the environment – or for ourselves?

Sustainable consumption is sometimes seen simply as an extension of

health and safety, and at other times only as a factor necessary to
account for the fall in environmental performance despite the adoption
of sustainable production practices.

Yet, at least in the medium term, there is no sustainable production

without sustainable consumption. As a result it is also becoming
increasingly prominent in the work of the European Commission as well
as of national governments and NGOs. One of the reasons for the
relative neglect of sustainable consumption is its complexity. It includes or
is affected by a wide range of issues, for example:

• the overall level of consumption;

• patterns of consumption and individual lifestyles;
• consumer behaviour and psychology;
• the sales and marketing practices of industry.

Environmental issues are also covered in Subclause 6.8, the community

involvement and development subclause. Clearly the dramatic changes to
the environment resulting from extractive industries and from basic
infrastructure construction (such as dams) have major community impacts.
Subclause 6.8 in the main addresses the way in which organizations
should deal responsibly with the community considered as a stakeholder.
However, a significant proportion of issues of concern to communities
could be labelled as ‘environmental’ in nature. Finally, environmental
issues can also be centrally involved in human rights issues, where they
may form the occasion in which human rights may be abused. Climate
change, for example, is likely to be the largest single contributor to
human rights abuses in the coming years.

One conclusion to be drawn from this interweaving of environmental

issues with other core subjects is the apparently perverse one that
environmental issues are also social issues. Of course, this is entirely
appropriate for a standard that addresses social responsibility!

Consensus
Perhaps the greatest achievement of ISO 26000, not just in relation to the
environment but across all areas, is the degree of consensus that has
been achieved. This is really a remarkable achievement. But that did not
mean that it was easy. There were real differences of interest and
opinion between the stakeholder groups involved in its development. In
conclusion it may be appropriate to discuss some of the more contentious
issues relating to the environment.

One of these was the issue of sustainable resource use or, more precisely,
the relationship of renewable resources to sustainability. In discussing the
issue of sustainable resource use the standard suggests first that the use

Understanding ISO 26000 37

Part I – ISO 26000 Issues

of a renewable resource at a rate less than that at which it can be

replenished is sustainable. That is uncontentious. However, it also
suggests that the use of non-renewable resources (effectively including
fossil fuels, since their rate of replenishment is vanishingly small for all
practical uses) may be sustainable if they are used at a rate less than that
at which renewable resources can be substituted for it. This is using
‘sustainability’ in a very soft sense indeed, but was a point of view
strongly argued for.

ISO 26000 is not a management system standard in the way in which

ISO 14001 is. It does not specify the characteristics of the organizational
processes that should be in place to manage social responsibility. Of
course, for environmental issues, ISO 14001 is precisely such a standard. It
might therefore be argued that, at least in the environmental area, there
is no reason why it should not have been written as a management
system standard. If its scope were confined to environmental issues, that
would have been a persuasive argument – but then it would not have
been a standard for social responsibility, which must cover a much wider
range of issues.

The particular achievement of ISO 26000 is the range of issues for which
it suggests practical actions that responsible organizations should take:
the seven core subjects. If it had been only a management system, albeit
one designed for covering the full scope of social responsibility, there
would have been a danger of emptying it of content in order to focus on
the structure of the management process applicable to social
responsibility subjects. While this would have been by no means a
foregone conclusion, the standard that has emerged is one which focuses
on substantive performance, rather than management process.

However, possibly the most contentious issue of all was that of the
certifiability of the standard. ISO 26000 is neither a standard that
prescribes a management system nor one that contains requirements
against which organizations can be certified. The arguments for and
against writing the standard with requirements were prolonged. The
arguments for including requirements were that it would give the
standard ‘teeth’. If it contains no requirements, then it is difficult for an
organization to know how well it is performing and there may be little
incentive to improve performance. In the end, the phrase ‘implementing
ISO 26000’ would have little meaning.

The arguments against including requirements were partly that this

would simply create an enormous market for those wishing to provide
certification services, without delivering any real value. More significantly,
perhaps, was the fear of many organizations that they would simply fail
to make the grade. Social responsibility is a difficult area in which to
demonstrate real achievement.

38 Understanding ISO 26000

 Should we take responsibility for the environment – or for ourselves?

In practice, one of the real dangers might have been that if organizations
thought they were to be continually assessed, they may well have insisted
that the levels of substantive performance specified were lower than
those to which they eventually agreed in the absence of certification.
There is also a very real practical difficulty in assessing performance in
this area. Measurement of environmental performance may not be
straightforward, but it is much easier than in some other areas, such as
human rights. If it is not possible reliably to measure performance, then
little would be gained by certification against a standard.

If responsibility is interpreted in the sense of limiting the negative

impacts that an organization may have, as in fact it has largely been in
the environmental clause of ISO 26000, then it would have been quite
feasible to certify (at least that part) accordingly. If responsibility were
also to be interpreted in the sense of encouraging positive impacts, as we
may perhaps hope it will become in the future, it is much more difficult
to see how certification could work well.

Are organizations, then, responsible for the environment, or only for

themselves? Limiting negative impacts entails responsibility for oneself,
although one may of course be responsible for positive aspirations. And
with our limited knowledge of the environment it may well not be wise
to assume too much responsibility for the environment. After all, the
environment appears to thrive best when left alone! Nevertheless, what
ISO 26000 will no doubt encourage is a sense of humility in the face of
the enormous task humanity has set itself in trying to live sustainably.

Understanding ISO 26000 39

Consumer issues27
Lucy Yates

Any organization has responsibilities to society and the environment.

Socially responsible organizations look at the impact the choices they
make have on people, on the environment and on the economy both
today and tomorrow. The ISO 26000 standard on social responsibility uses
this concept as its foundation, guiding organizations on how they can
implement social responsibility within themselves and contribute to the
broader goals of sustainable development. The standard is a
groundbreaking contribution to the development of a common and
updated understanding of social responsibility, bringing together
comprehensive information on the topic. It is the result of the most
integrated global debate on standards about responsible conduct, having
its roots in a balanced, multi-stakeholder consensus. This gives it a
potential authority that should not be underestimated.

This chapter will outline the importance of the standard for consumers
and look at how issues covered in the consumer clause of the standard
will help organizations act responsibly towards consumers and enable
consumers to act responsibly for themselves.

The standard contains a key clause covering core subjects for social
responsibility, which have to be considered by every credible organization
in order to identify its impacts on society and act accordingly. Consumer
interests have been included in these core subjects, along with human
rights, labour practice standards, environmental issues, fair operating
practices, community involvement and development, as well as principles
for organizational governance. The consumer clause covers issues such as
fair marketing practices, the protection of consumer health and safety,
sustainable consumption and access to essential services. In particular, all
eight consumer rights28 that underpin the UN Principles for Consumer
Protection,29 have been included and are therefore now explicitly linked
to the idea of a broader social responsibility of organizations.

The international consumer movement is very supportive of this standard.

Indeed, consumer organizations have been heavily involved in the

27
Consumer issues are the subject of Subclause 6.7 of ISO 26000.
28
These are: the satisfaction of basic needs and the right of everyone to an adequate
standard of living; the right to safety; the right to information; the right to choose; the
right to be heard and form organizations; the right to legal redress; the right to consumer
education; and the right to a healthy environment.
29
Available at http://www.un.org/esa/sustdev/publications/consumption_en.pdf (last accessed
7 December 2010).

Understanding ISO 26000 41

Part I – ISO 26000 Issues

standard’s development and have been the key initiators of the process.
Back in 2001, the ISO COPOLCO Committee30 recommended that the
topic of social responsibility be looked at and launched a feasibility study
into the development of a standard in this area. However, this was just
the start of the process and consumer organizations, through Consumers
International, continued to influence the structure under which ISO
WGSR31 would operate through representation on a strategic advisory
group. Consumers International co-ordinates over 80 consumer experts
from across the world within the ISO process, all of whom have been
central to developing the process and content of ISO 26000.

Consumer markets for goods and services have undergone major

transformation over the past several decades. Regulatory reform, more
open global markets, the development of new technologies and the
growth of consumer services have been key agents of change, providing
consumers with greater choice and other benefits which derive from
more open competition. However, this pace of change and increased
complexity can make it difficult for the would-be responsible consumer to
make meaningful pro-sustainable development choices. A number of
surveys32 show us that many people want to act responsibly and do their
bit to advance sustainable development but that it is not always easy for
them to do so.

The standard outlines a range of responsibilities that organizations have

towards consumers, a main one being to provide appropriate information
for consumers in order to inform their decision-making and help them
make socially responsible choices. Indeed, two of the consumer rights
included in the standard are the right to information and the right to
choose.33 As the standard outlines, it is important that information is
provided in a way that can be understood by consumers, including fair
marketing, factual and unbiased information and fair contractual
practices.34 This allows consumers to make informed decisions and
compare the characteristics of different products and services. The
standard also outlines the importance for organizations to promote
‘effective education empowering consumers to understand the impact of
their choices of products and services on their well being and on the
environment’.35 Practical advice is useful to help consumers understand
how they can modify their consumption patterns and make necessary
changes.

30
COPOLCO is the committee on consumer policy.
31
Working group on social responsibility.
32
IpsosMORI (2006) ‘Tipping Point or Turning Point’; National Consumer Council (2006) ‘I will
if you will’; Consumers International/AccountAbility (2007) ‘What Assures Consumers on
Climate Change’; Consumer Focus (2009) ‘Green Expectations: Consumers’ understanding of
green claims in advertising’.
33
Above, n. 29.
34
ISO 26000: 2010, p. 53.
35
ISO 26000: 2010, p. 56.

42 Understanding ISO 26000

 Consumer issues

We know consumers are seeking more transparency, and transparency is

a principle of social responsibility included in the standard. The provision
of information to consumers helps to achieve this. However, at the same
time, they do not want to be overloaded with information.

In many cases, it can often be too easy for organizations to think they
have met their responsibilities by providing consumers with lots of
information and expect them to process it all in order for them to reach
the ‘right’ decision or reach the ‘right’ view. We know that information is
important for consumers but this must be provided in the appropriate
way and context. What consumers want is not more information but
better information. To provide quality information for consumers, three
important features should be considered:36

• Clarity – consumers are looking for, as a minimum, information that

is clear and easy to understand.
• Credible – consumers want realistic, accessible and verifiable
information.
• Comparability – consumers want simple, meaningful and like-for-like
comparisons and reduced complexity.

There also needs to be consideration of the appropriate expectations of

consumers about what they will notice when they are making choices.
The weekly grocery shop is a good example of this. These days, at least in
the West, shoppers are bombarded with choice. If a customer selected
every item in an average US supermarket, there would be 48,75037
different products in the shopping trolley. So, because it is not possible to
weigh up the pros and cons of every product, it is natural to use
decision-making short cuts based on price, branding, promotions, shelf
position and packaging. For most, these short cuts form the basis of a
shopping routine that does not easily accommodate wider concerns, such
as the environment. Those wishing to provide environmental information
for consumers need to think about how information will be used by
consumers at this time, with thought given to the amount and level of
detail to provide. Although access to better information will help to
bridge existing gaps with the help of intermediaries such as NGOs and
the media, it is not a panacea.

Consumers are also often ‘locked in’ to certain consumption patterns,

meaning that just because consumers are provided with information, it
doesn’t always mean they will be able to use it or act on it. This ‘lock in’
occurs, in part, as a result of ‘perverse’ incentive structures – economic
constraints, institutional barriers or inequalities in access to services that
actively encourage non-socially responsible behaviours. For example,
36
Consumer Focus (2009) ‘Green Expectations: Consumers’ understanding of green claims in
advertising’.
http://www.consumerfocus.org.uk/files/2011/01/Green-expectations-single-page.pdf
37
Available at http://www.fmi.org/facts_figs/?fuseaction=superfact (last accessed 7 December
2010).

Understanding ISO 26000 43

Part I – ISO 26000 Issues

consumers often say that poor facilities frequently make sustainable

consumption an unattractive option. In many areas, if recycling isn’t
collected regularly, people find their glass bottles smashed up at the end
of the street. Because they don’t feel confident in the collection service,
they are put off from putting out their recycling. In addition, having to
travel to the recycling facilities makes it more likely for a household to
take the easy option and use the bin instead.

Barriers also flow from social expectations and cultural norms. Sometimes
individuals may act unsustainably because that is what everyone else
does, or out of sheer habit, such as driving the 10-minute walk to the
local shop because they always have done. It is not surprising, therefore,
that people don’t make the most socially responsible choices, despite
having full information about what they should be doing.

Disadvantaged consumers are often particularly shut out from making

responsible choices. They have less access to facilities and services and
lack the income to invest more in sustainable products. For a tenant
whose home is in poor repair and who is struggling to pay the energy
bills, energy efficiency measures are hardly a top priority – but they
should be for the landlord. Providing these people with information on
energy efficiency measures without making their homes energy efficient
will not allow them to make more socially responsible decisions.

Trust
With consumers’ daily decision making being driven by these and other
factors, organizations need to look for appropriate tools to deal with
these. A key to success will be to increase trust. In Germany, France,
Russia and the United Kingdom fewer than half of consumers trust
business to do what is right.38 In 2009, research in the UK showed that 58
per cent of consumers thought that many companies pretend to be green
just to charge higher prices.39 However, with over 70 per cent of
consumers40 saying that they reward companies they trust by speaking
highly of them to a friend, colleague or family member, and 57 per cent
saying they will buy a product or service from a company they trust over
a rival brand if they had the choice, the benefits to companies of
increasing their trust levels with consumers are very clear.

38
Germany 40%, France 36%, Russia 42% and the UK 49%. Available at
http://www.edelman.com/trust/2010/docs/2010_Trust_Barometer_Executive_Summary.pdf
(last accessed 7 December 2010).
39
Above n. 36.
40
Accountability and The Cooperative (2009) ‘What Assures Consumers in an Economic
Downturn? Reviewing the agenda in the global economic crisis’.
http://www.accountability.org/images/content/1/1/115/
AccountAbility_What%20Assures%20Consumers%20in%20Economic%20Downturn.pdf

44 Understanding ISO 26000

 Consumer issues

Companies can use ISO 26000 to build trust into their brand,
incorporating the issues it deals with into their business. This will allow
consumers to use short cuts, knowing that an organization has dealt with
the important issues without having always to use the small print. The
standard can help to build trust by setting out what organizations will do
to contribute towards sustainable development and how they will help
consumers towards this goal.

However, ISO 26000 covers all organizations, not just companies, and the
issue of trust also applies to public and non-profit organizations. Globally,
trust in government has increased since the global financial crisis really
hit in 2009. In 2010, in the United States, trust that government will do
what is right climbed from 30 to 46 per cent. France also noted an
increase, from 34 to 43 per cent, showing that governments here are
restoring confidence after the hit they took from the recession. However,
the statistics in the United States, France, Germany, India, United
Kingdom and Russia were all below 50 per cent, which shows significant
room for improvement.41 As with business, government still has a lot to
do to assure consumers that it can act responsibly. The global financial
crisis has undoubtedly had a significant impact on consumers’ levels of
trust but the increase also shows that there is opportunity to improve
things further. The standard can provide governments with a framework
to inform their policies, decisions and activities relating to aspects of
social responsibility and work with their citizens to help them live more
socially responsible lives.

In contrast, NGOs remain the most trusted institutions and this has
increased over time. This is particularly evident in China, where trust in
NGOs has increased by 25 per cent since 2004.42 This provides a big
opportunity for NGOs to both improve their own standards and also to
help other organizations to improve theirs. Some NGOs raise funds by
trading and can show by their own practices how to act in a socially
responsible way, from which others can learn.

Consumer organizations play a role in holding business and government

to account. Consumer organizations are the watchdogs of society.
ISO 26000 is not only a tool that enables them to assess how corporations
behave, but also gives consumer groups an ability to inform consumers
about how to compare companies and make an informed choice. In the
UK, 60 per cent of consumers thought consumer watchdogs were
accountable for ensuring that businesses behave responsibly and 65 per
cent trusted them to deliver that responsibility. This is a clear mandate
for consumer organizations to continue their involvement with issues of
social responsibility and be leaders in pushing this agenda forward.
Consumer organizations can actively promote ISO 26000 – it is in their
interests to see the standard put into practice and ‘road tested’ as soon

41
Above n. 38.
42
Ibid.

Understanding ISO 26000 45

Part I – ISO 26000 Issues

as possible. Only then will it be possible to collect and present evidence

of possible deficiencies, as well as substantiating its benefits.

One aspect not covered by the standard is the responsibility of consumers

themselves. This is as it should be: the standard is aimed at organizations,
not consumers. Consumers do not have responsibilities in the same sense
that organizations do, although consumer responsibility does have a role
alongside ISO 26000. But we must make sure that, when encouraging this
consumer responsibility, we start from where consumers are now, not
from where we think they should be. People are willing to engage in
social responsibility, but they need to see others acting around them to
feel their efforts are worthwhile. Consumers need to be reassured that
they are part of a collective movement that is making a real difference
and building trust is essential to achieving this. A critical mass of citizens
is ready and waiting to act on the challenge of social responsibility. But
to act they need the confidence that they will not be acting alone,
against the grain and to no purpose. Using the standard can help
organizations achieve this, pushing forward efforts to contribute to
sustainable development that show consumers that everyone is doing
their bit. There is real strength in having an economy of active, powerful
and well-informed consumers able to act on their own behalf – and
support one another – in getting the best deal and highest quality. In
2009, UK consumers spent £873 billion.43 This potentially gives them
tremendous power, both individually as buyers and users of goods and
services, and collectively in their wider economic impact.

It is important for organizations to remember that vulnerable and

disadvantaged consumers need special attention. All consumers are
different, with a wide range of abilities, needs and personal
circumstances. This variation can put some consumers in a position of
vulnerability or disadvantage during certain transactions and
communications, potentially putting them at risk from financial loss,
exploitation or other detriment.44 A consumer’s needs and abilities can
change with time or circumstance, meaning that consumer vulnerability is
relative and dynamic. With consumer vulnerability being caused by a
wide range of factors – for example, illness, illiteracy or a change in
personal circumstances such as bereavement – organizations need to
think about the assumptions they make about who they classify as a
vulnerable consumer. By providing flexible and inclusive goods and
services, organizations can make these accessible to a larger number of
consumers, giving them confidence that their needs can be met. By
recognizing the different signs of vulnerability and dealing with them
appropriately, organizations can increase satisfaction and build
confidence and trust.

43
Office for National Statistics (2010) ‘National Accounts: Household final consumption
expenditure at current prices’, updated 12 July 2010.
44
BS 18477: 2010.

46 Understanding ISO 26000

 Consumer issues

Conclusion
ISO 26000 is key in moving the social responsibility agenda forward. With
these barriers facing consumers, it is important that organizations are
looking at their responsibilities towards consumers and understanding
how they can help remove the barriers. Looking at issues such as
providing education and accurate information, promoting sustainable
consumption, designing products and services that provide access and
cater to all, will mean that consumers can have confidence in the
products and services that organizations offer and allow consumers to
independently judge the ethical and environmental credentials of
organizations.

The long-term goal of social responsibility is societal aspirations that are

fair for everyone; business models that add human value without taking
away environmental value; and an economy that is stable and yet
sustainable. This is the vision set out in ISO 26000. This is the defining
challenge of our century: how to fulfil our true potential and yet live
within our means. Organizations can be bolder about using the mandate
they have to influence market solutions. The standard is a framework for
social responsibility, with illustrations for action. There are win–win
outcomes from immediate action in a number of fields. In turn, these can
also contribute to building a mandate for longer-term solutions on
complex issues.

Understanding ISO 26000 47

International norms and stakeholder engagement
Alan Fine

International norms of behaviour45

Working Group discussions on Clause 4 of ISO 26000, which contains the
seven principles on which the standard is based, were in essence largely
not controversial. An exception was Subclause 4.7 – the principle of
‘respect for international norms of behaviour’, which, at some stages,
threatened to be the issue that could derail consensus on the standard as
a whole.

4.7 Respect for international norms of behaviour

The principle is: an organization should respect international

norms of behaviour, while adhering to the principle of respect
for the rule of law.

• In situations where the law or its implementation does not

provide for adequate environmental or social safeguards,
an organization should strive to respect, as a minimum,
international norms of behaviour.
• In countries where the law or its implementation conflicts
with international norms of behaviour, an organization
should strive to respect such norms to the greatest extent
possible.
• In situations where the law or its implementation is in
conflict with international norms of behaviour and where
not following these norms would have significant
consequences, an organization should, as feasible and
appropriate, review the nature of its relationships and
activities within that jurisdiction.
• An organization should consider legitimate opportunities
and channels to seek to influence relevant organizations
and authorities to remedy any such conflict.
• An organization should avoid being complicit in the
activities of another organization that are not consistent
with international norms of behaviour.

45
International norms are the subject of Subclause 4.7 of ISO 26000.

Understanding ISO 26000 49

Part I – ISO 26000 Issues

The opposition came from a significant minority of the industry

stakeholder group (ISG), and from a number of countries whose internal
policies might not fall within the international mainstream where
industrial policies and human rights law are concerned.

International norms of behaviour are defined in ISO 26000 as

‘expectations of socially responsible organizational behaviour derived
from customary international law, generally accepted principles of
international law, or intergovernmental agreements that are universally
or nearly universally recognized’.

Some concerns about the definition – and hence the principle – are
understandable. For one thing, the definition of the term is rather
imprecise. It could not be otherwise given that it is a broad and vast
concept, and one where the most responsible of individuals and
organizations might reach differing conclusions about what international
norms might suggest about many particular situations.

The phrase ‘or nearly universally’ was contentious in that the definition
set a kind of baseline that is, by definition, above that which applies in a
minority of jurisdictions, hence the opposition from particular nations. It
also raised concerns from some in the ISG because it means that certain
types of behaviour can be alleged to be irresponsible even if they are
conducted within the framework of local law.

However, whatever the uncertainties, complexities and implicit critique of

particular national jurisdictions, it can fairly be argued that, without the
existence of a principle of this sort, ISO 26000 could not legitimately be
called a standard. If there is no baseline for organizational behaviour
other than local legislation (which Subclause 4.6, ‘Respect for the rule of
law’, takes care of) and if, beyond that, ‘anything goes’, what standard is
being propagated?

A central reason for the sensitivity towards that definition rested in the
use to which it is put in the ‘respect for international norms of
behaviour’ principle – how to deal with situations where there is a
dissonance between international norms and local law or its
implementation.

This raises serious dilemmas, particularly for multinational companies (or

so it was perceived in the ISG), though arguably it does the same for
other stakeholder groups. At the same time, as we will see, it can be
argued that the principle addresses these situations and dilemmas in a
nuanced and sensitive manner.

The principle deals with the dissonance at three different levels.

First, it addresses the situation where the law or its implementation does
not provide for the safeguards required to meet international norms. In

50 Understanding ISO 26000

 International norms and stakeholder engagement

this phase of international economic development, this has become a

more common issue than at any previous time, including in jurisdictions
where the will is not matched by capacity.

The phenomenon of globalization has led to increased foreign

investment in developing countries, many of which, until the end of the
bipolar era with the fall of the Berlin Wall, had no – or very little –
large-scale private commercial activity. Even in developing countries
which permitted private investment, in many cases foreign investment in,
for example, local resources sectors was not permitted or encouraged.
And particularly in countries without democratic structures which
facilitated vibrant civil society organization, this meant there was little or
no requirement or call for regulation of such business activity.

From the mid- to late-1990s that situation began to change. Economically,

those countries began to see an influx of private investment in their
economies, most notably in high impact primary industries. And as
political democracy took hold, the space for local communities and NGOs
to lobby for responsible organizational behaviour grew too. And those
governments now have voting constituencies whose interests they need
to protect.

Yet many lacked the capacity to do so, and still do. Regulating complex
industry in areas of, for example, environment, health and safety,
requires not only the expertise to frame the regulations but also the skills
and experience needed to implement those regulations in strategic ways
that protect public interest without unduly hampering economic
progress. This commonly applies in respect of issues such as
environmental management, workplace health and safety and consumer
protection.

Particularly for organizations familiar with norms and standards

elsewhere in the world, it should not be overly difficult to ‘strive to
respect, as a minimum, international norms of behaviour’.

These strivings might be more complex in situations related to other

types of issue. In many developing countries, large companies also find
themselves reliant on state policing capacity to protect their facilities,
often subsiding the financing of these services. In some cases, those
agencies do not have a particularly strong cultural or legal framework
setting human rights standards in line with international norms.
Organizations seeking to exercise influence in these situations could be
vulnerable to government accusations of interfering in areas of
fundamental state responsibility. And this is something a foreign
multinational business is likely to be more sensitive to than, say, an
advocacy NGO for which such interventions are its core activity.

In this context, the Voluntary Principles on Security and Human Rights

have come to provide an increasingly recognized international standard.

Understanding ISO 26000 51

Part I – ISO 26000 Issues

ISO 26000 could further reinforce this. And one might expect the UN
Guiding Principles on Business and Human Rights to do even more in this
regard given the formal international backing they should enjoy since
John Ruggie’s report has been adopted by the UN Human Rights Council.

The second and third levels of the principle address more difficult
situations than the first – where the law or its implementation is actually
in conflict with international norms rather than merely not up to
standard. Such a situation may arise in jurisdictions where patriarchy is
legally enforced, or where collective bargaining in terms of the ILO
fundamental principles and rights at work is outlawed. Another good
historical example would have been apartheid in South Africa. At the
second level, ISO 26000 advises organizations to ‘strive to respect such
(international) norms to the greatest extent possible’.

However, at the third level, where ‘not following these norms would
have significant consequences, an organization should, as feasible and
appropriate, review the nature of its relationships and activities within
that jurisdiction’. These clauses triggered anxiety among some in the ISG.
Unlike NGOs and trade unions, business is not by nature into political
advocacy and activism. By nature, it is more inclined to adapt to
whatever circumstances it finds itself in so as to more easily pursue its
core objectives.

However, these provisions make the point (as does the work of the UN
Special Representative for Business and Human Rights) that there should
be limits to simple adaptation to local circumstances where these
constitute a breach of international norms. Indeed, circumstances may be
such that the organization should reconsider conducting activities at all.
Framers of this principle recognized that these are very complex
situations, and the guidance is deliberately conditional and
non-dogmatic. However, organizations are advised at least to apply their
minds to these questions.

52 Understanding ISO 26000

 International norms and stakeholder engagement

Multinational and local business experience during the latter

years of apartheid in South Africa offers some useful historical
insights into how this guidance might be practically
approached. To offer a few examples:

• Some US and European multinationals, and later local

companies, committed themselves to adhering to codes of
conduct. The most prominent were the so-called Sullivan
principles developed by Rev. Leon Sullivan which required
adherents to eliminate social segregation at the workplace
and unequal pay, hiring and promotion practices. They also
provided for ‘working to eliminate laws and customs that
impede social, economic, and political justice’. This
provision is not dissimilar from the clause in principle 4.7
which suggests that organizations ‘should consider
legitimate opportunities and channels to seek to influence
relevant organizations and authorities to remedy any such
conflict [with international norms]’.
• A small minority of companies continued to pay the salaries
and wages of employees arrested for political reasons. Of
course, there were also those that colluded with the
security authorities in bringing state action against activist
employees.
• A small minority of companies instituted collective
bargaining arrangements with trade unions representing
black workers before this was facilitated by law in the early
1980s.
• And, of course, some companies took the decision to
disinvest, or divest, from South Africa, concluding either
that their interests were not best served by continuing
operations and/or that the interests of the majority of
South Africans were not best served by them.

The last clause of this principle advises organizations to avoid complicity

in activities that are inconsistent with international norms, and provides a
more detailed explanation of what constitutes complicity. That was a very
difficult drafting task, because there exists no universal (or even
near-universal) legal definition of complicity. In addition, in reality most
such alleged breaches that find their way into the public domain tend to
be related more to social expectations than to the law. And social
expectations are extremely diverse, both between countries and societies,
and within them.

Nonetheless, the concept of complicity in, particularly, human rights

abuse is coming into increasing usage and hopefully the guidance on the

Understanding ISO 26000 53

Part I – ISO 26000 Issues

topic, offered in more detail in the human rights clause, will enhance
understanding and reduce its incidence.

Stakeholder engagement46
Clause 5 of ISO 26000 ultimately brought to fruition a helpful set of ideas
and guidance on stakeholder identification and engagement. The
question of ‘who is a stakeholder?’ always gives rise to intense debate.
And appropriate forms of stakeholder engagement need to be based on
a clear understanding of its purpose. Again, there is useful guidance to
be had here.

Who is a stakeholder? Is it the case that anyone who claims to be a

stakeholder of another organization is, by definition, a stakeholder? The
debate in the working group highlighted reservations from two sets of
stakeholders about answering this question in the affirmative.

First, an organization seeking to identify its stakeholders, and assess the

role they can and should play in the affairs of the organization, might
have some reservations if it operates from the basis that it would prefer
minimal outside ‘interference’ in the conduct of its affairs, particularly
from stakeholders that might be challenging or even hostile. That is a
not uncommon view in the world of business, though it has eased
substantially as the idea of ‘stakeholder capitalism’ has become more
widely accepted. The analysis offered in the standard encompasses a
slightly narrower definition – namely that stakeholders ‘are organizations
or individuals that have one or more interests in any decision or activity
of an organization’.

The second set of reservations is expressed in the question: Does

someone else have a legitimate right to represent the stakeholders that
we believe we legitimately represent? This kind of question might be
asked most frequently by a trade union organization which sees, say, an
NGO claiming an interest in employment relationships. Hence the
passage: ‘An organization should examine whether groups claiming to
speak on behalf of specific stakeholders or advocating specific causes are
representative and credible.’

So, subject to these and other considerations discussed, the standard

suggests to organizations that stakeholder identification would be best
achieved through asking the following comprehensive set of questions:

• To whom does the organization have legal obligations?

• Who might be affected, positively or negatively, by the
organization’s decisions or activities?

46
Stakeholder engagement is the subject of Subclauses 4.5 and 5.3 of ISO 26000.

54 Understanding ISO 26000

 International norms and stakeholder engagement

• Who is likely to express concerns about the decisions and activities of

the organization?
• Who has been involved in the past when similar concerns needed to
be addressed?
• Who can help the organization address specific impacts?
• Who can affect the organization’s ability to meet its responsibilities?

These questions suggest that the circumstances would be rare where a

party claiming a stake in another organization’s affairs would actually
have no stake. Why would it otherwise make the claim? However, this
doesn’t mean that the organization should extend to every stakeholder
the same level of importance or priority. There are important judgement
calls to be made. Assessing these judgements would be aided by proper
consideration of the purpose of a particular engagement.

The simplistic view of stakeholder engagement might be that its purpose

is to increase an organization’s understanding of the particular
stakeholder’s perspectives, concerns and/or wishes of the organization,
and to provide information about the organization to stakeholders. The
added value of the guidance offered in this standard is that it illustrates
the complex and varied challenges that might arise. Consider that,
according to the standards, stakeholder engagement can be used to:

1. increase an organization’s understanding of the likely consequences

of its decisions and activities on specific stakeholders;
2. determine how best to increase the beneficial impacts of the
organization’s decisions and activities and how to lessen any adverse
impact;
3. determine whether the organization’s claims about its social
responsibility are perceived to be credible;
4. help an organization review its performance so it can improve;
5. reconcile conflicts involving its own interests, those of its
stakeholders and the expectations of society as a whole;
6. address the link between the stakeholders’ interests and the
responsibilities of the organization to society at large;
7. contribute to continuous learning by the organization;
8. fulfil legal obligations (for instance to employees);
9. address conflicting interests, either between the organization and
the stakeholder or between stakeholders;
10. provide the organization with the benefits of obtaining diverse
perspectives;
11. increase transparency of its decisions and activities; and
12. form partnerships to achieve mutually beneficial objectives.

Examining these in turn, the first two arguably describe the basic purpose
of stakeholder engagement, as does item 11 – providing relevant
information to stakeholders about the organization’s activities. Items 3, 4
and 10 require a deep willingness to listen, hear and analyse the stated
perspectives of stakeholders, though it is a necessary aspect of due

Understanding ISO 26000 55

Part I – ISO 26000 Issues

diligence in a process of self-examination. Items 5 and 9 are critical, and

should probably be considered together.

With the experience of AngloGold, it is possible to construct a

not-so-hypothetical situation of a high impact operation – say, a
mine – operating in a semi-rural region of a developing
country. And let’s assume that, as in many emerging developing
country democracies, there is a variety of social, political and
economic interests, some emerging from the new society, and
some residual elements of the old. So the management of this
mine, having identified its stakeholders, might have discovered
it is going to have to deal with the following sets of
stakeholders, interests and situations:

• A ‘traditional leader’ who, though his or her unelected

status derives from a centuries-old feudal system,
nonetheless carries a degree of popular status. And he
(almost invariably he) is particularly suspicious of and
hostile towards the local NGO campaigning on behalf of
the local community, often with links to prominent
international NGOs based in London, New York or Paris.
• An elected parliamentary representative, who may or may
not represent the country’s ruling party, and who therefore
may or may not identify with the government’s attempt to
encourage mining as an economic activity designed to set
the country on a new growth path.
• A national government encouraging private investment,
though also under pressure from civil society to ensure a
fair sharing of the proceeds between the state, the investor
and the local community, and with little historical
experience in balancing these interests.
• Local government institutions based in the various
surrounding towns and villages facing similar pressures.
They are interested in being seen to have leveraged
particular social investment projects from the mine,
whether or not these projects are necessarily the top social
priorities, and competing with each other to be first in the
queue to receive these investments, and where neither the
social elites of the local authorities nor in the mine
management necessarily have the capacity or the will to
objectively assess the primary social needs.

56 Understanding ISO 26000

 International norms and stakeholder engagement

• Small-scale miners who have been operating a

mining-based subsistence economy for decades or centuries
and are in danger of losing part of their livelihoods to
modern commercial mining activities. Their interests are in
conflict not only with those of the new commercial miner
but also with those of the elected central government
because they pay no taxes or royalties, use environmentally
dangerous production methods and, in general, clearly will
not and cannot be the basis of a modernizing economy.
• A local NGO of the sort mentioned above, whose past
experience and/or international links tells it that companies
of the sort that own and operate the mine are, in general,
untrustworthy and the NGO – and possibly some of the
other local representatives – may have opposed the
granting by the central government of the mining right to
the new investor.
• A trade union learning for the first time how to deal with
a multinational company with decades of experience of
collective bargaining elsewhere in the world.
• All of these stakeholders, one way or another, having to
deal with a new business environment which offers, for the
first time to the surrounding communities, employment,
but where the best paid positions require skills that have
not historically been developed in the communities or,
sometimes, in the entire country.

These are just some examples of situations that might exist.

Even where the mine management starts off with the best
intentions (which, of course, is not always the case), it discovers
that it has little or no understanding of the dynamics at work,
and where agendas are not clear to managers who are often
expatriate and not familiar with local culture, traditions and
political dynamics.

Starting from this kind of premise, reaching the ideal item 12 – real and
mutually beneficial partnerships – would take patient and energetic
engagement over a period of time, where building trust is a necessary
first step towards even beginning to create the mutual understanding
which is a precondition for any real partnership.

Understanding ISO 26000 57

A standard for companies or a standard for
communities?47
Bart Slob

A community is like a ship; everyone ought to be prepared to take

the helm.
(Henrik Ibsen)48

In Ibsen’s play, An Enemy of the People, Dr Thomas Stockmann is a

well-respected citizen of a small coastal town in Norway. The municipality
has recently invested a large amount of public and private funds in the
development of baths, a project led by Dr Stockmann and his brother,
Peter Stockmann, the Mayor. The town is expecting a surge in tourism
and prosperity thanks to the new municipal baths, which the citizens
believe to be of great medicinal value. However, just as the baths are
becoming a success, Dr Stockmann discovers that waste products from the
town’s tannery are contaminating the waters, causing serious illness
amongst the tourists. He expects this important discovery to be his
greatest achievement, and promptly sends a detailed report to the
Mayor. The report includes a proposed solution that would come at a
considerable cost to the town.

To his surprise, Dr Stockmann finds it difficult to get through to the

authorities. They seem unable to appreciate the seriousness of the issue
and are unwilling to publicly acknowledge and address the problem
because it could temporarily ruin the local economy. As the conflict
develops, the Mayor warns his brother that he should ‘acquiesce in
subordinating himself to the community’. Dr Stockmann refuses to accept
this, and holds a town meeting in order to persuade his fellow citizens
that the baths must be closed. The people, eagerly anticipating the
prosperity that the baths will bring, refuse to accept Dr Stockmann’s
claims; his friends and allies, who had explicitly given support for his
campaign, turn against him en masse. He is taunted and denounced as a
lunatic – an enemy of the people.

Dr Stockmann and his brother, the Mayor, personify the difficulties and
dilemmas that organizations face when they engage with communities.
Community members may have very different views on what is best for
the community, whereas companies and other organizations that develop

47
Community involvement and development is the subject of Subclause 6.8 of ISO 26000.
48
Henrik Ibsen (1882) An Enemy of the People, Pennsylvania State University, 2001, p. 13,
available at http://www2.hn.psu.edu/faculty/jmanis/h-ibsen/enemy-people.pdf (last accessed
11 March 2011).

Understanding ISO 26000 59

Part I – ISO 26000 Issues

activities in the community may overlook, or even ignore, the social and
environmental impacts of their decisions and mainly pursue financial
objectives.

In an international standard on social responsibility, a clause on

community involvement and development is likely to raise some
eyebrows. In the past two decades, many experts have advocated that
(corporate) social responsibility needs to be integrated into the core
business of an organization. Supporting the development of communities
was long considered to be akin to philanthropy or charity.49 In this
chapter, I argue that community involvement and development is a key
element of social responsibility, provided that it is linked to an
organization’s core business. Although the examples used in this chapter
refer mainly to the positive and negative effects of business operations,
other kinds of organization – such as development agencies, government
departments, academic institutions and religious associations – may have
similar or even greater impacts on a community. The guidance provided
in the ISO 26000 standard is applicable to all types of organization.

It is important to understand what the word ‘community’ means in the

context of ISO 26000. Traditionally communities have been defined as
groups of interacting people located in a geographic area, organized
around common values and attributed with social cohesion. Today,
however, many communities are emerging with no ties to a specific
location. These communities revolve around things people have in
common, such as religious persuasion, ideology, ethnicity, origin, sexual
orientation, profession or hobby. The internet has helped these
communities of interest to share information across the globe almost
effortlessly.

In the ISO 26000 standard, ‘community’ refers to residential or other

social settlements located in a geographic area that is in physical
proximity to an organization’s sites or within an organization’s areas of
impact. Nevertheless, the standard also affirms that the term ‘community’
can mean a group of people having particular characteristics in common,
for instance a ‘virtual’ community concerned with a particular issue.

Community involvement and development is the last of the seven core

subjects in ISO 26000. In terms of hierarchy, this topic is just as important
as other subjects like human rights, the environment and labour rights.
The core subject of community involvement and development comprises
seven different issues. In this chapter I will explain these issues and
provide examples.

49
Slob, B (2009) ‘A responsabilidade social corporativa: estratégias e ações a partir da
sociedade civil’, in Oswaldo Luiz Gonçalves Quelhas et al. (eds), Transparência nos negócios
e nas organizações: os desafios de uma gestão para a sustentabilidade, São Paulo: Editora
Atlas SA, p. 87.

60 Understanding ISO 26000

 A standard for companies or a standard for communities?

Subclause 6.8 begins by clarifying the principles and considerations that

underpin the concept of community involvement and development. The
principles in this clause are an addition to the general principles of social
responsibility outlined in Clause 4. Simply put, the four basic principles
for community involvement and development are:

• be part of the community;

• recognize and respect the rights of its members;
• recognize and respect its characteristics; and
• collaborate.

An organization cannot address the issues relating to community

involvement and development in an adequate manner if it is considered
an outsider. It must participate fully. A community should be able to
decide how to maximize its resources and opportunities. Every
organization should recognize this right. In addition, an organization
should have due regard for the distinctive aspects of a community and its
members, such as culture, religion, tradition and historical background.
Finally, an organization should never go it alone. It should exchange
experiences, resources and efforts with the community.

One of the most important set of goals that an organization should take
into account with regard to this clause are the Millennium Development
Goals (MDGs). These goals form a blueprint agreed to by all the world’s
countries and leading development institutions. They are to be achieved
by the year 2015, but recent progress reports show that some are looking
more achievable than others. There are eight MDGs, each of which
contains one or more quantifiable targets.

1. Eradicate extreme poverty and hunger

2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development

Although progress has been made in the past decade, it is highly uneven.
Without a major push forward, many of the MDG targets are likely to be
missed in most regions. Old and new challenges threaten to further slow
progress in some areas or even undo successes achieved so far. The most
severe impact of climate change is being felt by vulnerable communities
who have contributed least to the problem. The risk of death or disability
and economic loss as a result of natural disasters is increasing globally
and is concentrated in poorer countries. Armed conflict remains a major
threat to human security and to hard-won MDG gains. Large populations
of refugees remain in camps with limited opportunities to improve their

Understanding ISO 26000 61

Part I – ISO 26000 Issues

lives. According to the United Nations, in 2009 42 million people had

been displaced by conflict or persecution, four fifths of them in
developing countries.

The number of undernourished people has continued to grow, while slow

progress in reducing the prevalence of hunger stalled – or even reversed
– in some regions during the periods 2000–2002 and 2005–2007. About
one in four children under the age of five are underweight, mainly from
lack of quality food, inadequate water, sanitation and health services,
and poor care and feeding practices.

An estimated 1,4 billion people were still living in extreme poverty in

2005. Moreover, the effects of the global financial crisis are likely to
persist: poverty rates will be slightly higher in 2015 and even beyond, to
2020, than they would have been had the world economy grown steadily
at its pre-crisis pace.

Gender equality and the empowerment of women are at the heart of the
MDGs and are preconditions for overcoming poverty, hunger and disease.
But progress has been sluggish on all fronts – from education to access to
political decision making.50

In spite of these setbacks, the UN believes that the MDGs are still
attainable. The critical question for the international community is how
to transform the pace of change from what we have seen over the last
decade into dramatically faster progress. Although development should
be guided and driven primarily by public policies, the success of MDGs
will depend on the contributions of all organizations – large or small,
public or private. Through community involvement, organizations can
help to contribute, at a local level, to the achievement of the MDGs.

Community involvement
In the first issue described in the clause on community involvement and
development, the idea of community involvement is further explained. It
is defined as ‘an organization’s proactive outreach to the community’.
Organizations are encouraged to participate in and support civil
institutions, as well as to engage in networks of groups and individuals
that constitute civil society. An important notion related to the first issue
is that many groups in society are not formally established. These groups,
communities and social movements can be just as significant, if not more
significant, than formal organizations. Examples of important informal
organizations are indigenous communities everywhere around the world:
collectives of waste collectors in Argentina or Egypt, Brazil’s Landless

50
United Nations Department of Economic and Social Affairs (DESA) (2010) ‘The Millennium
Development Goals Report 2010’, New York: UN DESA.

62 Understanding ISO 26000

 A standard for companies or a standard for communities?

Workers Movement, the squatter community in The Netherlands and

social networks on the internet. All grass roots groups and movements
can contribute to development.

Among the actions and expectations related to the issue of community

involvement, the standard states that organizations should maintain
transparent relationships with local government officials and political
representatives, free from bribery or improper influence. This has been a
major issue for many large corporations.

In December 2010, leaked US diplomatic cables published by

Wikileaks revealed Shell’s grip on the Nigerian state. According
to Wikileaks, a top Shell executive told US diplomats that the
company had seconded employees to every relevant
department of the Nigerian government and so knew
‘everything that was being done in those ministries’. The
executive boasted that the Nigerian government had
‘forgotten’ about the extent of Shell’s infiltration and was
unaware of how much the company knew about its
deliberations.51

Another example of undue political influence is the funding

provided by ExxonMobil to think tanks and researchers, with
the aim of influencing policies on climate change. Research
undertaken by the Royal Society in the United Kingdom
indicated that, in 2005, ExxonMobil provided more than US$2.9
million to organizations in the United States that misinformed
the public about climate change. In October 2006, two US
senators wrote to ExxonMobil’s chairman and Chief executive
officer (CEO), asking the company to ‘end any further financial
assistance’ to groups ‘whose public advocacy has contributed to
the small but unfortunately effective climate change denial
myth’. They wrote that they were convinced that ExxonMobil’s
long-standing support of a small cadre of global climate change
sceptics, and those sceptics’ access to and influence on
government policy makers, had made it increasingly difficult for
the United States to demonstrate the moral clarity it needed
across all facets of its diplomacy.52

51
Smith, D (2010) ‘WikiLeaks cables: Shell’s grip on Nigerian state revealed’, The Guardian, 8
December 2010, available at
http://www.guardian.co.uk/business/2010/dec/08/wikileaks-cables-shell-nigeria-spying
(accessed 8 March 2011).
52
Slob, B and Weyzig, F (2010) ‘Corporate lobbying and corporate social responsibility:
aligning contradictory agendas’, in José Carlos Marques and Peter Utting (eds) Business,
politics and public policy: implications for inclusive development, London: Palgrave
Macmillan/UNRISD, pp. 166–67.

Understanding ISO 26000 63

Part I – ISO 26000 Issues

In 2007, the company pledged that it would ‘discontinue

contributions to several public policy groups whose position on
climate change could divert attention from the important
discussion on how the world will secure energy required for
economic growth in an environmentally responsible manner’.
Three years later, however, several newspapers reported that
the company was still funding organizations that campaign
against controls on greenhouse gas emissions.53

Education
ISO 26000 recommends that organizations engage in activities to improve
the quality of and access to education, promote local knowledge and
help eradicate illiteracy. The standard also states that organizations can
contribute to the elimination of barriers to children obtaining an
education – child labour, for example. This issue is intrinsically linked to
many of the MDGs, particularly to MDG 2 and MDG 3.

An example of a company that has invested in educational activities,

without losing sight of its core business and bottom line, is Unilever. In
2000, Valerie A Curtis, the director of the Hygiene Centre at the London
School of Hygiene and Tropical Medicine, was fed up with trying to
convince people of the necessity to use soap. She had been explaining to
people for years how soap kills germs, to little effect. She helped to form
an initiative called the ‘Global Public Private Partnership for Hand
Washing with Soap’, and convinced some of the world’s largest consumer
products manufacturers to participate. Dr Curtis contacted Unilever,
which set out to study the social situation of soap use in Ghana.
Ghanaians, it turned out, regularly washed their hands after going to the
bathroom, but usually without soap. The only time they used soap was
when they felt disgust – for example, after handling grease – and surveys
showed that they viewed going to the bathroom as natural and not
disgusting.

Dr Curtis, with the help of Unilever’s marketing team, produced a series

of advertisements designed to make people feel disgust in bathrooms.
One of the advertisements showed a red spot on someone’s hands after
they used the bathroom, and the spot followed them and could be seen
on everything they touched. Only washing with soap made the red stain
go away. An infectious-disease specialist who worked with Curtis on the
Ghana campaign explained: ‘This was radically different from most public
health campaigns ... There was no mention of sickness. It just mentions

53
See, for example, AFP (2010) ‘ExxonMobil breaks climate change pledge’, Perth Now, 19
July 2010, available at
http://www.perthnow.com.au/business/news/exxonmobil-breaks-climate-change-pledge/
story-e6frg2qu-1225894142490 (accessed 8 March 2011).

64 Understanding ISO 26000

 A standard for companies or a standard for communities?

the ′yuck′ factor. We learned how to do that from the marketing

companies.’ The advertisements seem to have worked: Dr Curtis reported
an increase in hand washing with soap after toilet use by 13 per cent and
an increase before eating of 41 per cent.54

Employment creation and skills development

Another way in which to contribute to the reduction of poverty and the
promotion of economic and social development is by creating jobs. The
third issue in the clause on community involvement and development is
about employment creation and skills development. Some national or
local investment decisions may lead to increased economic yields, but will
not create many jobs. Similarly, outsourcing production and services may
have a positive impact on the creation of jobs in one country, but cause
massive lay-offs in another.

Some sectors are labour-intensive, while others need very few workers.
An example of this is the soybean industry in Brazil. According to the
Federation of Social and Educational Assistance Organizations (FASE) in
Rio de Janeiro, the soy sector does not generate jobs in rural areas and
drives family farmers away from their lands. As a result, soybeans have
led to more social exclusion and poverty, affecting cities also, as many
rural workers are forced to leave rural areas in search of a job and
income elsewhere.55 A survey carried out in 2006 revealed that soybeans
generated only 5.5 per cent of all jobs in the Brazilian agricultural sector,
while they accounted for 47 per cent of all the area planted with grains
and beans.56 Research published in 2010 revealed that in Brazil staple
foods like cassava and beans have significant lower Gini coefficients (a
measure of income inequality, with high values representing greater
inequality) than soy.57 This means that soybean production in Brazil
constitutes a sector with high levels of inequality and low levels of
employment.

54
Woods, A K (2010) ‘A behavioral approach to human rights’, Harvard International Law
Journal, 51(1), winter 2010, available at http://www.harvardilj.org/articles/51-112.pdf
(accessed 10 March 2011), pp. 64–5; Curtis, V A et al. (2007) ‘Masters of Marketing:
Bringing Private Sector Skills to Public Health Partnerships’, American Journal of Public
Health, 634, 634–35.
55
Schlesinger, S and Noronha, S (2006) ‘O Brasil está nu! O avanço da monocultura da soja, o
grão que cresceu demais’, Rio de Janeiro: FASE, available at
http://www.boell-latinoamerica.org/downloads/soja_livro_rev_final_b1.pdf (accessed 10
March 2011), p. 10.
56
Ibid.
57
Martinelli, L A et al. (2010) ‘Agriculture in Brazil: impacts, costs, and opportunities for a
sustainable future’, Current Opinion in Environmental Sustainability, 2(5–6), December
2010, pp. 431–38, available at
http://www.sciencedirect.com/science/article/B985C-519D52C-1/2/
922c1e70c80c50a0c9c9888e4ac0cf13 (accessed 10 March 2011).

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Part I – ISO 26000 Issues

Development of and access to technology

The fourth issue pertaining to the clause on community involvement is
the development of and access to technology. In order to prosper, most
communities need safe access to modern and innovative technologies.
Among others, ISO 26000 recommends that organizations contribute to
the development of low-cost technologies that are easily replicable and
have a high positive impact on poverty and hunger eradication. Useful
innovations that contribute to community development do not necessary
involve high-tech systems.

Researchers at Phillips designed a wood-burning stove that can save up

to 80 per cent of fuel and also drastically reduce air pollution. The secret
of the many benefits of the stove is an electronically controlled fan
forcing air through the stove, leading to higher temperatures and a
better fuel-to-air ratio. This results in cleaner burning and more efficient
use of fuel. A thermoelectric generator using the heat from the burning
wood generates electricity for the fan. Apart from ensuring autonomy
from electricity supplies, the generator can also power external
equipment like radios or lighting. Philips Research also optimized the
construction of the stove for low thermal mass and good insulation. This
ensures that the stove takes less energy to heat up, decreasing the time
to get to cooking temperature, and makes sure the stove loses less of its
heat to the surroundings.58 In 2007, Philips reported that in comparison
with traditional stoves, the Philips Woodstove reduces 94 per cent of
carbon monoxide emissions, 93 per cent of particulate matter and results
in a 45 per cent wood saving. Some challenges remain, however, and
ongoing research focuses on improving the lifetime of the stove,
reducing biannual services and improving handling and safety without
additional cost.59 Philips believes that by selling these sorts of products to
low-income consumers (the so-called ‘bottom of the pyramid’) it can
make a profit whilst contributing to the alleviation of poverty.

Creation of wealth and income

Organizations can contribute to wealth and income creation though
entrepreneurship programmes, development of local suppliers, and the
employment of community members. The creation of wealth and income
also depends on a fair distribution of the benefits of economic activity.

58
Balmer, M and Hancock, D (2009) ‘Good for people can be good for business: the
convergence of opportunities for delivering basic energy to low-income households in
developing countries’, Journal of Energy in Southern Africa, 20(2), May 2009, available at
http://ol.up.ac.za/upspace/bitstream/2263/13644/1/Balmer_Good%282009%29.pdf (accessed
11 March 2011).
59
Alders, J (2007) ‘The Philips Woodstove. From a research prototype to a commercial
business proposition’, presentation made at the 2007 ETHOS Conference, Kirkland, 26–28
January 2007.

66 Understanding ISO 26000

 A standard for companies or a standard for communities?

Governments play an important role in this, since they must create and
implement sound taxation systems, and distribute revenues responsibly.

One of the main recommended actions relating to the issue of wealth

and income creation is that an organization should consider the
economic and social impact of entering or leaving a community, including
impacts on basic resources needed for the sustainable development of
that community. This recommendation is particularly valid for heavy
industry companies that execute projects with huge effects on the
livelihoods of communities, such as mining and oil companies. For these
organizations, community consent is extremely important. If a
community’s actual consent is required before operations begin, an
organization must treat the community as a partner in project
development rather than as an obstacle to overcome. It also implies that
a company must engage holistically with a community, providing its
citizens with access to critical information and allowing them adequate
time to assess their needs and interests before making a decision about
whether to accept an organization’s presence.60

Peru provides an example of how this plays out in practice. The country
has experienced a mining boom, driven by record-high prices for gold,
copper and other minerals that are among the country’s leading exports.
A record number of new mining projects have been initiated in the past
ten years. This boom was facilitated by the liberalization and
privatization of the mining sector that began in the 1990s. This new
wave of mining investment has generated widespread conflict as mining
companies have entered communities in rural Peru that have had limited
contact with foreigners but have suffered the impact of Peru’s previously
state-owned mining industry. In a number of situations, foreign
companies with little experience operating in this kind of context have
mishandled their community relationships.

In September 2004, 10 000 protesters took to the streets of the northern

Peruvian city of Cajamarca, near South America’s largest gold mine, to
protest against the mine’s plans to expand to a mountain that residents
believe is a key source of water for the surrounding communities. After
weeks of sometimes violent protests, the mining company, a subsidiary of
US-based Newmont, finally withdrew from the mountain and issued an
unprecedented public statement acknowledging that it had not fully
understood the concerns of the local communities.

As a result of the protest, the mine was forced to scale back operations
and the company’s stock price fell by 7 per cent, a loss of US$1 billion in
shareholder value. Furthermore, by losing access to the gold deposit, the
company relinquished an estimated US$1.7 billion in company earnings. If

60
Slack, K (2008) ‘Corporate social license and community consent’, 21 November 2008,
available at http://www.policyinnovations.org/ideas/commentary/data/000094 (accessed 13
March 2011).

Understanding ISO 26000 67

Part I – ISO 26000 Issues

the company had sought consent from local communities at the outset
and shared its strategy on entering and leaving the community, it could
have understood sooner the degree of community opposition and might
have more effectively addressed the community’s concerns.61

Health
The second-to-last issue in the clause on community involvement and
development is health. Threats to public health can have severe impacts
on communities and can hamper their development. Thus, all
organizations should contribute to the promotion of health, to the
prevention of health threats and diseases and to the mitigation of any
damage to the community. This may include participation in public health
campaigns, as Unilever has done in the Global Public Private Partnership
for Hand Washing with Soap.

ISO 26000 states that an organization should endeavour to eliminate the

negative health impacts of any production process, product or service it
provides. Many organizations fail to do this. Again, Newmont provides a
poignant case in point.

In October 2009, a cyanide spill at the Ahafo mine in Ghana

killed a large number of fish and threatened the water of local
communities. A Ghanaian Ministerial Panel that evaluated the
spill and its aftermath recommended that the company be
fined US$4.9 million for failing to prevent the spill or to
properly report on and investigate the spill. According to a
group of civil society organizations, Newmont caused a number
of major problems even before the spill. The first phase of the
mine (Ahafo South) displaced roughly 9,500 people, at least 95
per cent of whom were subsistence farmers. A possible
expansion of the mine (Ahafo North) would displace a further
10,000. The International Finance Corporation (IFC), the World
Bank’s private sector arm, approved US$175 million in loans to
Newmont for the development of the Ahafo project – in spite
of calls for the IFC to postpone the Ahafo loan and

61
Ibid.

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 A standard for companies or a standard for communities?

independent reviews which highlighted the problems with the

project. Compensation for lost houses, land, water access, fish
ponds and crops was woefully inadequate and public pressure
forced the company to allow a review of compensation rates in
2008 by representatives of civil society, the government and the
company.62

Social investment
Social investment, the final issue related to community involvement and
development in ISO 26000, occurs when organizations invest their
resources in initiatives and programmes aimed at improving aspects of
community life, such as projects in the areas of education, culture, health
care, income generation and access to information. This includes
philanthropy and charitable activities. The standard highlights that social
investments should prioritize projects that are viable in the long term
and contribute to sustainable development.

Conclusion
ISO 26000 is a solid attempt at describing how organizations can engage
responsibly with communities. The proposed actions and expectations in
the clause are as relevant for organizations as they are for the
communities in which these organizations participate or aspire to
participate. An intriguing question remains as we conclude this chapter.
Would Peter Stockmann, the Mayor of Ibsen’s imaginary coastal town in
Norway, have listened to his brother and decided to close the polluted
baths in his town or would he have kept them open, complying with the
wishes of the majority, had he known the contents of ISO 26000?

62
Earthworks (2010) ‘Denver-based Newmont Mining Co. fined millions for cyanide spill at
Ghanaian mine’, January 2010, available at
http://www.earthworksaction.org/PR_NewmontAhafo_spill.cfm (accessed 13 March 2011).

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Implementing ISO 26000

Integrating social responsibility into a commercial

organization – experiences at Aggregate
Industries UK
Miles Watkins

Introduction
When embarking on a journey to improve the social responsibility of an
organization, the context in which that organization operates is
incredibly important to understand. A failure to do so will result in a lack
of embeddedness of the key principles of social responsibility – even if a
vast array of procedures and systems exist indicating the contrary. It
needs to be understood that the most desirable outcome from an
integration of this kind is a set of identifiable behaviours where value for
humankind and the environment is evident. People within the
organization need to be able to feel whether a decision is right or
wrong. Decisions are unlikely to be made right all the time owing to the
array of conflicting interests that exist at any one time and the
differential power those interests hold over the individual. However,
when social responsibility is fully embedded, people will know when
something is not right even though their hand may have been forced
through powers beyond their control.

It is this desired cultural mindset that rules out the use of the term
‘implementation’ when considering social responsibility. The use of that
term implies that systems, processes and assets will be deployed to
achieve a result. With social responsibility, a great many of these items
may well be put in place as part of the overall journey but they are not
an end unto themselves – merely a collection of instruments to condition
people into working in a certain way. However, without natural dialogue
and significant visible, felt leadership, the complete journey to creating a
socially responsible organization will not be made.

It is in this respect that ISO 26000 really stands out as a very different
standard. One could have easily expected a normative, management

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system-type approach as is common with many existing standards that

address components of social responsibility – such as the environment,
safety or energy, for example. ISO 26000 takes a principle-based
approach, picking out key topics that are likely to be part of a social
responsibility journey, but neither definitely nor exclusively so. Also, the
clause that one would expect to be called ‘implementation’ or
‘management’ is called ‘integration’, reflecting that behavioural change is
required, rather than simply the establishment of a cluster of business
processes. This is consistent with the experiences within Aggregate
Industries, the organization in focus in this chapter.

Aggregate Industries is a large UK-based multi-site construction and

building materials business. It is a wholly owned subsidiary of the Swiss
stock exchange listed Holcim Group, one of the largest cement companies
in the world. Aggregate Industries’ business lies in the provision of
building materials largely derived from quarry products such as
aggregates, concrete and asphalt. It employs around 5,300 people across
approximately 300 locations and turns over in excess of £1,2bn. It holds
significant market positions in most of its material segments and is
recognized as leader in sustainability within the building materials sector.

Organization context
When considering the context of an organization, it is quite possible to
be intensely academic and intrusively analytical, but understanding what
the organization is trying to achieve in its day-to-day activities is a simple
but important start. There is a significant difference in the activities,
motivation, incentivization and culture of an organization if it is a
government body compared to a commercial entity, for example. On a
fundamental level, the former seeks to serve the people, society if you
will, and the latter to generate value for its shareholders. Dropping down
a level of detail, the government organization may be focused upon
health care or refuse collection and the commercial organization maybe a
family concern or a listed business. These subtleties make a difference
and need to be properly understood. One could move on from there and
examine the wider stakeholder context of an organization – which again
will be very different from one case to the next – but to whatever level
of intensity the investigation is carried out a clear understanding of the
aims of an organization is 100 per cent instrumental to the success of
integrating a more socially responsible way of operating.

At Aggregate Industries the commercial context looms very large in the

journey to being more socially responsible. The traction gained by various
programmes and initiatives created to move the business in a more
socially responsible direction is almost infinitely greater in the context of
a sound business case than it is from a purely ethical perspective. Simply
telling people that they should act in a certain way just because ‘they

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 Integrating social responsibility into a commercial organization

should’ does not compete well against other more pressing concerns as
the working day unwinds in front of them. However, using the
commercial context in conjunction with a normative reference makes a
dramatic difference. At Aggregate Industries, the two key areas that
allow the crystallization of a business case for social responsibility can be
broadly described as ‘licence to operate’ and the ‘commercial
opportunity’.

Maintaining the licence to operate in the broadest sense is critical to a

business – particularly one with a wide variety of physical assets,
including minerals extraction and manufacturing facilities. Licence to
operate has a literal meaning in terms of the actual licences required to
operate and then also a broader societal meaning in terms of whether
the operation is seen by local – and sometimes remote – stakeholders as
being at least ‘acceptable’. It should be obvious that this is highly
relevant to operational managers. Maintaining compliance with
regulatory requirements and managing the interface with the community
in the right way keeps the place open for business – a more powerful
concern than simply doing the right thing and completely in line with the
key business objective of generating product to market.

How products perform during their use provides not only a marketing
opportunity but also ascribes value to the transaction. In the UK
construction sector, a range of activities have begun to integrate social
responsibility issues into the supply chain. In 2008, the government
launched the ‘Strategy for Sustainable Construction’ and, around the
same time, the ‘Code for Sustainable Homes’. Private construction
businesses have begun to build ‘green’ buildings where high recycled
content and low embodied carbon have a value.

On a more complex level, the whole issue of ‘responsible sourcing’ has

become more readily discussed and again part of the value proposition in
the marketplace. This provides a great lever for the commercial parts of
the organization whereby the social responsibility credentials of the
business and its products – if positive – not only prevent exclusion from
markets but might actually generate more business. Again, this is
completely aligned to the activities of those who are charged with
marketing and sales of products and services. This in turn creates internal
pressure from the sales arm to the manufacturing arm to improve its
offer in this respect. Again, this is considerably more powerful than the
simple ethical argument of doing the right thing.

At Aggregate Industries, the use of both arguments has led to

considerable business success. The company won the tender to supply all
of the concrete and aggregates to the Olympic Park in East London
through not only its product offer but also its inherent credentials in
social responsibility. The latter was a significantly weighted part of the
tender and it demonstrated to the business and the wider construction

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community that investing in social responsibility was a sound business

proposition and not simply a ‘nice-to-have’.

The commercialization of social responsibility is often well debated

amongst professionals in the field. Some commentators believe this is
hijacking what is a relatively purist subject for commercial advantage.
Others, including the author, believe that aligning the needs of social
responsibility and the aims of a business creates a powerful change
agent, without which progress would be much slower and considerably
less embedded. Also, once there is an appreciation of the relevance of
social responsibility in a business context, it becomes more acceptable to
use the normative, ethical position of ‘because you should’.

Managing performance – the use of systems and processes

As much as the end result of the social responsibility journey is a
consistent and identifiable set of behaviours, it can be an awfully big –
and arguably impossible – leap to make in one go. Trying to make a
cultural shift is made increasingly challenging as organizational size,
geographic spread and diversity of activities come into play. Arguments
are often made regarding the challenges faced by small- and
medium-sized enterprises (SMEs) engaging with the social responsibility
agenda. In the author’s experience, the closer the proximity of the leader
to his or her organization, the easier any such transition becomes. A
single-site operation with a simply structured workforce is categorically a
much easier environment to develop than a sprawling mass of sites with
a wide variety of business silos and fragmented leadership. It is the latter
that characterizes complex businesses that serve local markets with many
different products. It is also the latter therefore that requires – at least in
the short to medium term – a range of systems and processes to tackle
areas of social responsibility. These systems and processes are essentially a
proxy for direct leadership. Ideally, as the culture matures, the
withdrawal of processes is possible.

For many business such as Aggregate Industries, the early journey into
embedding social responsibility starts with an environmental programme
of some sort or other. This is often driven from an internal assurance
requirement surrounding legal compliance – perhaps a need to save costs
through better energy or waste management, or indeed a directive
through the supply chain. Clearly, there are often a range of reasons. For
Aggregate Industries it was more the case of enlightened self-interest
surrounding realization that its environmental performance was nothing
to be proud of – but it should be. Again, in common with many
organizations, it was decided to implement an environmental
management system to the requirements of ISO 14001.

The system that was developed was largely electronic and completely
centralized. A one-size-fits-all mentality was pursued in order to raise

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 Integrating social responsibility into a commercial organization

standards to a common level. The system was ‘command and control’ in

its nature. It was heavily policed from the centre by a team of trained
auditors and was largely owned by the environmental function. This
approach was seen as necessary at the time to reduce the diversity in
decision making as far as environmental performance was concerned –
simply because the evidence suggested that the business managers had
not been making the right decisions by the environment up to this point.

The programme was successful from the perspective that a large number
of operational sites – somewhere in the region of 160 – achieved
certification to the standard within three years of the date of programme
commencement and before the end of 2000, which was the ultimate
target. The quality of housekeeping and management control of site
operations was greatly improved, leading to the best compliance record
in the sector. Environment was very much on the agenda but, owing to
the command and control nature of the approach, it would be hard to
argue that embedded responsibility had been achieved. A heavy reliance
on procedures and environmental professionals meant that the thinking
was ‘outsourced’ to someone else.

Moving forward a decade, the approach to environmental management

has changed dramatically to make considerable effort to ensure that
managers are taking responsibility for their actions and that those actions
could not simply be blamed on someone or something else. A dramatic
reduction in the central audit programme from annual to triennial
inspections mean that it is no longer acceptable to wait for a report and
then act – indeed, the creation of a self-audit tool has created a slight
crutch but it requires local thinking nonetheless. The establishment of
executive-led steering groups for key issues has decentralized the
ownership of the environmental agenda. The greater use of performance
targets has created competition and classic performance management
rather than relying on a strict application of process. Managers have to
determine the best way to drive out the desired performance in their
business units rather than follow the rule book. At the time of writing,
the business was in the transition phase across to this different way of
working; however, the quality of the conversation surrounding
environmental issues had already changed and responsibility was being
felt in the right places. An early observation of this approach shows that
it is much more reliant on management quality and internal
communication, and those issues are a journey in their own right.

The role of leadership

Organizations undertaking the journey to being socially responsible
generally fall into two categories, in the author’s experience. The first
category contains those organizations where an individual or a collection
of individuals work tirelessly as champions to move the organization

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forward the best they can. They are not necessarily in a position of
significant authority (particularly at the start of the journey) but, through
chipping away, progress is made on one or many issues to a greater or
lesser extent.

The second category of organization sees its leader taking social

responsibility as a key issue on a personal level and then driving a set of
behaviours into the organization. It is this latter category that has the
best chance of lasting behavioural change. Managing and leading are
often confused but it is leading that brings the results when it comes to
embedded change. The words, and more so the actions, of leading
individuals are instrumental in achieving that change.

At Aggregate Industries the safety programme provides a key illustration

of the power of leadership. As well as management system-based
instruments, classic performance management against targets and a
range of ‘cardinal rules’, there are specific activities built in for leaders to
engage with. Specifically, these activities enable a significant level of
commitment to be visibly shown to safety. It involves senior management
spending considerable and obvious time on the subject. It involves
dialogue specifically on safety between senior managers and junior staff.
It involves unplanned plant visits focusing on safety, which are about
dialogue and observed behaviour and not necessarily physical inspection.
Above all, it involves the senior leadership consistently applying safe
working practices so no one in the organization can call into question
their commitment at any time.

The key metric used in the management of safety is Lost Time Injury
Frequency Rate (LTIFR). A lost time incident is one where someone is
injured so badly that he or she has to miss a work shift. The frequency
used by many businesses is lost time injuries per million hours worked.
This allows comparisons to be made over time and between
organizations or parts thereof. Aggregate Industries, at the time of
writing, has an LTIFR of around 2. For the roughly one million hours per
month worked at Aggregate Industries, this translates to two lost time
injuries per month – the equivalent of 24 per year. Through the
application of many systematic processes, the safety record has improved
to this level by over 80 per cent in eight years. But it has been ‘stuck’ at
around 2 for some 12 months and a leadership programme is widely
believed to be the key to improving performance once more. By seeing
the organizational leadership taking personal responsibility for health
and safety, it is hoped that others in the organization will embody the
responsibility to the same degree and therefore make better decisions
before they act. Every accident is preventable. Most circumstances
immediately post-accident are not controllable – and this explains the
difference between a near miss and a fatality. Therefore, the prevention
of accidents is the key.

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 Integrating social responsibility into a commercial organization

It is extremely difficult to expect people to adopt a set of principles if

those who hold the expectation have not themselves committed to the
journey. Arguably, in all the fields of social responsibility, commercial
organizations have put more effort into safety than anything else. A
great deal of effort has been put into establishing ‘what good looks like’
in the field of safety – and every time visible, felt leadership is found to
be instrumental. Those organizations in which there is limited leadership
in this way are found to be wanting on their safety performance. At
Aggregate Industries, using the safety model and the lessons learned
from it provides an excellent insight into how more effectively to embed
other areas of social responsibility.

Interestingly, concerning safety, the argument can and is often made

about the bridge between being safe at work and being safe at home,
the idea being that one cannot switch on or off the safety mindset – you
are either safe or you are not. Also, it connects the worker’s well-being
with the impacts it could potentially have on friends and family if an
accident were to happen. This makes eminent sense as it helps to create
a values-based approach – moving beyond procedures to culture. When
concerning wider issues of social responsibility, is it possible and
appropriate to link work and home in the same way? Although there
may be many opportunities, there is an obvious tension between work
and home. At work, climbing the career ladder inevitably means
increasing wealth under the general mantra that more is better. In order
to achieve a more socially responsible lifestyle, classically less is generally
seen as more. Therefore, career progress in the commercial environment
may run counter to the needs of society where materialism is most often
the result of wealth. Given that the whole economy is based on
consumerism, no individual business is going to solve this conundrum and
it may rely on the creation of lower impact goods and services that can
be bought in a consumerist mode but with a reduced negative footprint.

Reflections on ISO 26000

The creation of ISO 26000 probably represents the best effort to date in
bringing together the wide range of issues that between them describe
social responsibility. It remains incomplete, as it admits in its text – it is
not possible to cover all issues that arise in the interface between
organizations and their stakeholders. However, it does provide an
excellent guide for determining what those issues are and how to
approach tackling them. Considering the document from an industry
perspective, there are some observations to be made regarding two of
the more challenging areas of the standard in the context of integration
into organizations.

First, the application of international norms of behaviour across the

business and its supply chain is potentially as complicated as it sounds.

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Yet simply because it is complicated does not mean organizations have

no inherent responsibility to act. Nor does it mean that organizations do
not wish to do so. The longer and more truly international a supply chain
becomes, the more difficult international norms are to pursue. Also, there
are many cultures in which a largely Western view of operating may not
be appropriate or desired. The simplest response would lead to a
situation where supply chains are short and avoid contentious regions.
However, this may not provide the best value to the consumer nor assist
the development of an emergent economy. So there is a difficult balance
between avoiding complex regimes and operating at an acceptable level
of performance. It could be argued it is the local population who have
the greatest say in what is or is not acceptable and organizations should
have processes in place to ensure this is the case.

As if supply chain issues are not complex enough, the ISO 26000
introduces and validates the concept of ‘sphere of influence’ and within
that ‘complicity’. Organizations – commercial or otherwise – should avoid
being complicit in acts that are socially irresponsible through
relationships with other organizations and/or individuals. As the standard
suggests, a reasonable due diligence effort should help in avoiding such
exposure, at least in most cases. The problem comes with existing
relationships and the need to perhaps re-evaluate those relationships in
the context of social responsibility. The bigger challenge is to use the
same network of relationships as a power for good in the context of
social responsibility. In order to achieve this, one could argue that a fully
embedded culture of social responsibility in the home organization is
required, owing to the complex web of interactions between the
organization and its stakeholders. This culture is the holy grail of social
responsibility and most, if not all, organizations have some way to go
before that journey is over. ISO 26000 can assist them on their way.

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ISO 26000 implementation – a Brazilian
perspective
Aron Belinky

Introduction
Brazil played a central role in the development of ISO 26000, not only
because of its participation in the co-ordination of the Working Group
that drafted the international standard, but also because the
representatives of the various Brazilian stakeholder groups were very
active in the process. While working on the building of the standard,
many members of the Brazilian delegation had the opportunity to keep
constant contact with their corresponding stakeholder groups, in fora
especially constituted to discuss the work in progress. In this way they
improved it while anticipating issues that could arise and expanding its
scope.

Therefore, it was natural that, as soon as the final text63 was presented
for balloting, a number of initiatives emerged in the country proposing
its practical application. This article outlines the experience and findings
of the pioneer activity conducted by GVces64 Working Group, in
partnership with GAO,65 from August to December 2010.

The GVces ISO 26000 Working Group and its process

The publication of ISO 26000 – after years of debate and work in the
largest group ever established to build an ISO standard – brought to
many of the people involved a concern as to how to ensure that a
document of such importance would be properly used by society.

With this in mind, GAO and GVces formulated a collective work

programme, focused on the practical application of the standard (at that

63
The FDIS version was published for balloting on 12 July 2010 and approved on 13
September 2010 with 93 per cent favourable votes (66 among the 71 voting countries).
64
GVces is the Center for Sustainability Studies at the Getulio Vargas Foundation, a think
tank devoted to this theme, based in the most prestigious business school in Brazil,
recognized nationally and internationally as a centre of excellence in the area.
65
GAO is the Portuguese acronym for ‘Group for Brazilian NGOs Articulation on ISO
26000’, an open forum that brings together more than 70 NGOs from all
over Brazil, created in March 2006 for the specific purpose of furthering the participation
of Brazilian civil society in building ISO 26000, while, at the same time, disseminating
the concepts and values of the future international standard.

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time ISO 26000 was being finalized) so that, right from the beginning,
there would be a specific and respectable reference point for its
application. To achieve this, they decided to organize in early July 2010
an open seminar on the applicability of ISO 26000. There were 427
participants from different segments of Brazilian society: companies of all
sizes and sectors, NGOs, trade unions, public organizations, consultants,
academics and media professionals were enrolled for the meeting.

Based on the results of the seminar, a working group – formed

predominantly by large companies already very active in the social
responsibility field – was established. Based on the experience of this
pioneering group, content and methodologies were developed, to be
shared with other segments. The group was finalized in August 2010 and
worked until December of that year, when its findings and experiences
were presented in a second major seminar open to the public.

Formation and methodology

The group was composed of 11 large companies: two banks, two
telecoms, two energy producers/distributors, one mining, one
petrochemical, one pharmaceutical, one agribusiness (sugar and ethanol)
and one tobacco. Besides these, São Paulo Stock, Commodities and
Futures Exchange (BMFBovespa), the National Confederation of Industry
(CNI/SESI) and two small Brazilian consulting companies specializing in
social responsibility, took their place in the group. Each institution was
represented by two professionals, from the management and/or
operational level, and working in areas dedicated to social responsibility
or sustainability, or in areas related to the subject, such as communication
and marketing, institutional relations and human resources.

The study was conducted over six meetings, each of one day’s duration,
and the two seminars referred to above: one at the beginning and one
at the end of the process. Each meeting was divided into two sessions,
and in each session discussions were held on one or two topics of
ISO 26000, thus eventually covering the whole standard.

Before each meeting, the participants read the ISO 26000 clauses that
they were going to discuss, and answered a number of questions relating
to its applicability in their companies. Before each meeting, the Working
Group’s facilitator gave short presentations providing an overview and
enhancing key aspects of the specific clause that was going to be
discussed. After the presentations, discussions were held in small groups
or in plenary. These activities were based on the questions posed for the
preparatory tasks. During the workshop, participants were encouraged to
take note of their insights, reflections and conclusions, bringing together

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 ISO 26000 implementation – a Brazilian perspective

key elements in order to develop a preliminary proposal for their

company’s own ISO 26000 customized implementation plan.

Figure 3 illustrates the work programme.

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Figure 3 – Preliminary analysis and customized implementation

framework

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 ISO 26000 implementation – a Brazilian perspective

Who is going to use the ISO 26000, and why?

One of the first discussions faced by the group involved a couple of key
questions:

1. Who would be the ISO 26000 target audience?

2. Who would be interested in the standard, and why?

In response, at least five possible user groups were identified:

• organizations that have invested in social responsibility and

sustainability, wanting to know if their strategic decisions about their
investments are aligned with the latest credible trends;
• social responsibility and social responsibility-related professionals who
need support for their proposals and positions within the
organizations they serve;
• stakeholders who wish to strengthen their claims or reinforce their
advocacy agendas in the face of organizations claiming to be
committed to social responsibility;
• legislators and public decision or policy makers who wish to
formulate public policies or regulations relating to social
responsibility and its themes;
• communicators, journalists, consultants and academics who study the
subject.

Besides these, a sixth large group was identified, formed by companies

and other organizations that still do not invest in social responsibility but,
for whatever reason, would like to do so. It was considered that this is,
undoubtedly, the largest potential user group, but also one that will take
a long time to approach ISO 26000, whose broad scope can intimidate
beginners. This group will benefit from the standard, but will only adopt
it if pushed to do so, or somehow become strongly motivated to adopt a
more socially responsible attitude.

Some GVces Working Group highlights

During each of the Working Group meetings (and therefore each clause
of the ISO 26000) various highlights were identified. An extensive
collection of these findings will be included in the report of the GVces
Working Group. What follows is an account of those four aspects that
the Working Group, as a whole, considered to be particularly important.

An integrated and consistent agenda

A point considered very important by the Working Group was the
‘complete agenda’ presented in Clause 6 of ISO 26000, which brings
together, in a structured way, a wide range of topics and questions

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related to social responsibility. The particular value of this content

appears because it is not a simple summary of requirements, but rather a
set of expectations and related actions, based on agreements of
unquestioned international legitimacy (authoritative international
agreements developed within the UN system). The content of such
sources, originally conceived to be addressed by states, were
appropriately selected and ‘translated’ so as to be applicable and to serve
as guidance for organizations of every kind and nature.

A renewed concept of stakeholder

Throughout ISO 26000, and especially in Clauses 5 and 7, the importance
of identifying and engaging stakeholders is emphasized. This is a key
aspect of social responsibility, without which there cannot be a
comprehensive and consistent focus by the organization on the impacts
of its actions and decisions. This has always been a key feature of social
responsibility but, over the years, the stakeholder concept became
distorted, ending up as something that can be translated as ‘those that
may affect the organization, or be affected by it’.

According to many who work with social responsibility, it is precisely the

stakeholders’ power to affect the interests of an organization that have
led many companies and other organizations to identify their most
relevant stakeholders and consider them in their decisions. From this
perspective, a stakeholder is not just an interested party (which may have
its interests affected by the organization) but mainly an interesting party
(a party to which an organization must pay attention to take care of its
own interests).

By clearly defining stakeholders as ‘those who have an identifiable

interest in the actions or decisions of an organization’, ISO 26000 rescues
and revitalizes the original concept of stakeholder, making it clear that a
socially responsible organization should take care of those affected by it,
regardless of whether or not they have the power to impact the
organization. And this doesn’t preclude an organization taking into
account those who affect its interests – what continues to be recognized
as important, although framed as good management practice, rather
than part of the organization’s social responsibility.

Creative tension for a dynamic balance

Digging into the implications of the renewed concept of stakeholder
adopted by ISO 26000, Figure 2 in Subclause 5.2.1 shows the relationship
between an organization, its stakeholders and society (reproduced here
as Figure 4), which is very important to everyone wishing to work
seriously with social responsibility. This figure illustrates very clearly the

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 ISO 26000 implementation – a Brazilian perspective

permanent tension that an organization is subjected to – pressured, on

the one hand, by expectations from society and, on the other hand, the
interests (not always convergent or consistent) of its multiple
stakeholders.

Figure 4 – Relationship between an organization, its stakeholders and

society

In the opinion of the members of the GVces Working Group, this figure
and its text synthesizes the fact that social responsibility requires – always
and necessarily – the management of conflicting interests, which come
both from the organization itself and from the various parties with
whom it is continuously maintaining a relationship, including the wider
society and stakeholders of different profiles. The consequence of this
understanding is that ‘being socially responsible’ means not simply
reaching a goal (a situation to be achieved), but rather managing a

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process (a way of acting and being able to identify and to fairly and
transparently balance diverse interests and conflicts). For that, the ability
to dialogue is of the essence.

Recognizing this fact is a key aspect for organizations and professionals

committed to social responsibility and wanting to have a healthy and
productive relationship with all involved, starting with the members of
their own team.

Three key concepts

Another innovative point of ISO 26000, with important implications for
the practice of social responsibility, is the combination of the three
concepts adopted by the standard:

• sphere of influence;
• due diligence; and
• complicity.

We will not fully explore each concept here since this goes far beyond
the scope of this chapter, but it is important to emphasize the power that
the relationship between them has.

By stating that the social responsibility of an organization comprises – to

a greater or lesser degree – its entire sphere of influence, ISO 26000
shows that, in order to be really socially responsible, an organization
must evaluate the extent and degree of the influence generated by its
relationship with other actors. The greater the influence, the greater is
the organization’s responsibility for the actions and consequences of
those it can influence.

ISO 26000 also indicates that an organization can be considered as an

accomplice of another organization when, consciously or unconsciously, it
takes advantages of non-socially responsible attitudes taken by the other
organization. Thus, it should be noted that ISO 26000 takes a broad
notion of complicity, not considering it only in the strict legal sense, but
according to common sense and based on an organization’s intention to
be effectively socially responsible.

But, given the vast extent of its sphere of influence, how can an
organization be aware whether it is being complicit in something that
violates social responsibility? The answer lies in the concept of due
diligence that ISO 26000 – following the latest trends in this area –
borrows from economic legislation and, more recently, from the human
rights area. It is by exercising due diligence that an organization can
understand the extent of its responsibilities, thereby avoiding becoming
complicit with situations that are not acceptable to social responsibility.

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 ISO 26000 implementation – a Brazilian perspective

Practising these guidelines in an articulated and consistent manner is

certainly one of the biggest challenges brought by the publication of
ISO 26000.

Main conclusions and lessons

In addition to the most relevant or innovative aspects of ISO 26000, the
GVces Working Group identified and shared some conclusions and
learning, which are presented here, divided into several categories:

1. The results for the professionals involved.

2. Challenges and recommendations for other organizations.
3. The methodology for its application.

Results for the professionals involved

• Studying ISO 26000 has brought to the members a whole set of new
knowledge. The exchange of experiences and perspectives during the
joint work significantly enhanced this.
• Focusing on an ‘ISO brand’ standard made the study more valuable:
it is strongly and broadly perceived as an important tool, developed
with seriousness and responsibility.
• The work brought more motivation and self-confidence to each
participant in his or her daily job, as employees in their respective
companies.
• ISO 26000 was taken as a reference to be introduced in professional
performance ‘from now on’. It proved to be a social responsibility
professional’s companion, a main guide, a handbook.
• The ideas and knowledge coming from the discussions helped to
improve the participants’ personal self-perception (not only as
professionals) on social responsibility subjects and their implications.
• The insights during the debates helped participants to perceive new
opportunities and possibilities for action in personal and professional
aspects.
• Working together brought the knowledge to implement social
responsibility themes in business, and also brought a sense of
importance for each member of the group. The high level of the
group meetings – people, companies, contents and facilitation –
provided credibility and importance to the work and to the messages
coming from each individual participant.
• Overall, the work renewed the participants’ confidence and
perception that social responsibility is not a short-lived phenomenon
or an outdated fashion.

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Challenges and recommendations

Some of the most relevant aspects of ISO 26000 for its application in
companies were identified as being that it:

• represents a global multi-stakeholder consensus: the reference point

of the greatest strength for social responsibility;
• is a guide to be used by a company in its self-monitoring, for its own
social responsibility assessment and evaluation of its own evolution;
• introduces a diverse range of topics and concepts – it is ‘the
Complete Guide’ for social responsibility, worldwide;
• facilitates the dissemination of social responsibility and its concepts
throughout the organization, helping to put social responsibility on
all types of company agendas and practices, in all areas, including
senior management;
• strengthens and facilitates the use of tools related to social
responsibility, and the applicability of social responsibility initiatives;
• adjusts some important nuances between social responsibility,
sustainability and sustainable development;
• offers much guidance from a practical point of view, establishing and
clarifying concepts and principles of great relevance and practical
utility.

The issues surrounding the greatest challenges in the adoption of the

standard and how to deal with them led to a wide range of responses,
summarized as follows.

• If a company has little or no experience in social responsibility, or

social responsibility is not fully institutionalized, the implementation
of ISO 26000 will start with a strong effort to convince the top
management. But if a company is already active in social
responsibility, the standard will reinforce actions and will help to set
the direction.
• It is necessary to establish what is motivating each company – how to
‘sell’ the idea to the senior management: this activity will vary from
one company to another.
• How can a company announce that it ‘has ISO 26000’? It must be
recognized that it is impossible ‘to have compliance’ with this
standard, because the topics it addresses are too many and complex.
It remains a challenge to materialize and capitalize on a company’s
commitment to ISO 26000.
• How far are consultants working in social responsibility really aligned
with ISO 26000? On the one hand they can help to disseminate the
standard, but they can also – voluntarily or otherwise – disseminate a
distorted perception and/or incomplete information.
• Smaller companies with fewer resources: how can they invest, have
the interest, advantages or resources to implement the ISO 26000
standard? Some parts may be self-financing, but not all.

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 ISO 26000 implementation – a Brazilian perspective

• Being ‘an ISO standard’ helps to overcome resistance, because even

small and ‘unconverted’ companies or organizations normally respect
and value the ISO brand.
• As we live in a context of broken paradigms, ISO 26000 should be
perceived as a guidance to be upheld by those who realize that fact.
In such a context, one may expect a similar trajectory to ‘the quality
movement’ powered by the ISO 9000 series in the 1990s.
• The identification and measurement of the benefits of implementing
ISO 26000 can help to avoid resistance, encouraging its adoption.
Measurements and estimations about the ‘cost of doing nothing’ can
also be an alternative.
• There is also a risk of malicious use or the improper seeking of
benefit (better image, for example) by simply ‘pretending’ to follow
the standard. On the other hand, a company acting in this way can
be ‘smoked out’ and may lose more than it gains.
• Overall, building a positive agenda can motivate more than risk
management or the threat of reputational losses.
• As the standard is very broad and diverse, it becomes difficult to
know exactly what is or is not a part of social responsibility. For a
more large-scale adoption by start-ups or less committed companies,
customized frameworks may be useful, selecting the most relevant
parts or subjects of the standard for each specific case or situation.
• Some possible solutions for the above questions may be the creation
of some ISO 26000 ‘offspring’, tailored for specific sectors, countries,
organizational profiles, etc. These could be more objective and
focused, as well as suitable for translation in step-by-step
methodologies.

Applying ISO 26000: an outline of the methodology

Finally, from a practical point of view, the Working Group presented an
interesting proposal as an initial approach to the implementation
methodology of ISO 26000.

There are five preliminary steps, followed by the effective

implementation work of prioritization, which will vary from organization
to organization. It is a creative process to develop a ‘customized
implementation plan’ for ISO 26000. The steps are:

1. Review the whole standard, identifying aspects applicable for

possible implementation in the organization and identification of the
standard’s aspects relevant for that particular organization.
2. Produce a preliminary ‘customized implementation framework’ (CIF),
which will consider the key aspects of ISO 26000 mapped in step 1:
detailed and clear points identified as relevant to that particular
organization.

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Part II – Developing and Implementing ISO 26000

3. Validate the results of steps 1 and 2 with key people within the
organization. It is expected that the initial work of reading and
doing a detailed analysis of ISO 26000 will be undertaken by people
in the operational area of the organization, either on their own
initiative or by following the needs of an area that wishes to do
something about social responsibility. In this step it is not necessary
to involve all internal and external stakeholders. But at least some
key people that may help (or hinder) further proceedings must
somehow be involved.
4. Once the draft of the CIF is validated with the key people in the
organization, the next step is to validate it with other stakeholders.
This can be done at the same time as the evaluation of the
importance of each aspect selected (the identification of priorities:
the greater the impact associated with each aspect, the higher is its
priority). ISO 26000 itself, in Clause 7, contains important guidance
on this.
5. With the CIF validated by stakeholders, the next step is to transform
it into a ‘general ISO 26000 implementation plan’ for the
organization, which should be nothing more than the combination
of deadlines, responsibilities, outcomes and resources for each of the
points to be worked out, identified and prioritized in the CIF.
6. Following that customized implementation plan, the process should
proceed with implementation, using as far as possible the usual
methods of the organization or activity area (as far as compatible
with social responsibility) and with appropriate controls and periodic
reviews of the results. It is also essential to maintain a strong
involvement with the relevant stakeholders in the process of
implementation and monitoring.

Although not contemplated in the above methodology, one of the key

issues highlighted by Working Group members was the need, when
working with ISO 26000 in a company, to seek the continued involvement
of top management. This is essential for both political and financial
backing, and to include some aspects of social responsibility in the
decision-making structure and effective organizational management.

The ultimate goal is that social responsibility is not a separate project or

department, but something that is completely embedded in the
organization, from strategic planning and governance to its
management, daily operation and reporting of results.

The results of this first Working Group were very well received and
positively evaluated by participants. Throughout 2011, a second edition
of the Working Group is planned, involving small- to medium-sized
companies, as well as organizations of other kinds. The methodology will
be adapted, allowing interaction between the different groups, while
preserving and respecting their specificities.

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Part III – Cross-Cutting Issues

Trade implications of ISO 26000

Gwenann Manseau66

In developing ISO 26000 on social responsibility, ISO has entered the

territory of public policy and law in an unprecedented fashion. The
standard seeks to address a vast breadth of social and political matters
that will invariably raise further questions in ways that may not have
been fully considered or understood. One of these questions is how the
standard will affect international trade. While some may challenge the
idea that a voluntary standard could affect trade, voluntary standards
play an important role in the international trade framework and
therefore can also implicate many trade concerns.

In this chapter, I will first describe in general terms the role of

international standards in international trade, and then how ISO 26000
fits within the common understanding of how such standards affect the
international trade legal framework. I will describe the complications that
ISO 26000 and other public policy standards could pose within this legal
framework, potential negative trade effects of the standard and how
such concerns were addressed during the development of the standard.

Standards and international trade

Standards are crucial to the smooth operation of international trade but,
when they serve to prevent the legitimate import of products, standards
may also pose a barrier to trade. When a country adopts voluntary
standards into mandatory regulation, standards can become a pillar of
the country’s regulatory system as the country seeks to protect the health
and safety of humans, plants and animals, protect the environment,
protect its national security interests and prevent deceptive practices.
However, standards can also be misused as a disguised means of
discriminating against products from certain regions or countries and
protecting a country’s domestic market, rather than serving to facilitate
trade. The World Trade Organization (WTO) addresses this concern
specifically with regard to standards-related measures for products

66
Senior Attorney, Office of the Chief Counsel for International Commerce, US Department
of Commerce. This paper reflects only the views of the author and does not represent the
views of the Department of Commerce or any other agency of the US Government.

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Part III – Cross-Cutting Issues

through its Agreement on Technical Barriers to Trade (TBT Agreement),

to which all 153 WTO Members are party.67

Standards-related measures, as understood in trade law, include

standards, technical regulations and conformity assessment procedures.68
Standards in the context of the TBT Agreement are voluntary product
rules, guidelines or characteristics approved by recognized bodies.
Technical regulations are mandatory; they may incorporate product
standards, which then become mandatory under the law of the country
that has adopted them. Examples of technical regulations include
nutritional labelling requirements, electrical safety requirements and
production methods for products. In regulating, countries may develop
their own mandatory requirements, or reference other standards in their
regulations. Conformity assessment procedures are procedures used to
determine that requirements in technical regulations or standards have
been met; these include testing and inspection, verification and assurance
of conformity, and registration processes.

Under the TBT Agreement, WTO Members are obligated (among other
things) to ensure that their standards-related measures do not
discriminate against products of other WTO Members, do not create
unnecessary obstacles to trade and are adopted transparently, taking into
account comments of other WTO Members. However, it is important to
note that a fundamental precept of the TBT Agreement is the
recognition of the right of countries to take measures necessary to
ensure the quality of products in their markets, and protect important
legitimate objectives such as protection of health, safety and the
environment, at the levels they consider appropriate – as long as in doing
so, they do not apply their laws and regulations discriminatorily or as
disguised restrictions on trade.

The following is a hypothetical illustration of how a country could

impose a technical regulation that results in a fairly egregious trade
barrier. Let us imagine that a WTO Member adopts a regulation requiring
extensive labelling of consumer information. It states

All products must be labelled with information on performance,

impact on health, country of origin, energy efficiency (where
applicable), contents or ingredients including use of genetically
modified organisms and nanoparticles, aspects related to animal
welfare including use of animal testing and safe use, maintenance,
storage and disposal of the products and their packaging. Any
products that do not contain such a label are not allowed to be sold
or manufactured in the country.

67
WTO Agreement on Technical Barriers to Trade, available at
http://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm. Membership figure is current as of
21 January 2011: see http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
68
See TBT Agreement, Annex 1 for full definitions of these terms.

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 Trade implications of ISO 26000

One would view this regulation through the lens of trade law as follows.
The country is within its rights to regulate at the level it considers
appropriate, for reasons including ensuring the prevention of deceptive
practices, or the protection of human, animal or plant life, or health.
However, while the intent may be to benefit consumers by showing
additional information relating to a product, such an extensive labelling
requirement may be unnecessary. Among other things, as written it is
vague, wide-ranging and applicable to all products with no exceptions. It
is sure to be burdensome, especially on small companies and companies
in developing countries, and possibly overlapping with other existing
regulations. The requirements are likely to be an obstacle to trade,
creating a difficult administrative hurdle for manufacturers and importers
that may not be justified by the end result. If there is a less
trade-restrictive way of achieving the objective of informing consumers –
such as making the labelling voluntary for both domestic and foreign
products – that method should be used instead. In its current form,
however, the labelling requirement could be challenged by another WTO
Member under the TBT Agreement as being an unnecessary obstacle to
trade.

One way in which the WTO legal framework seeks to reduce the effect
and prevalence of these regulatory trade barriers is by promoting the use
by WTO Members of international standards. In this way, the
international trade law system recognizes the importance of standards in
trade and accords special status to international standards, and further
recognizes that international standards in particular have a role in
reducing trade barriers. The term ‘international standard’ is not defined
anywhere in the WTO Agreements. The WTO Committee on Technical
Barriers to Trade has, however, articulated six principles that should be
observed when international standards are developed:

• transparency;
• openness;
• impartiality and consensus;
• effectiveness and relevance;
• coherence; and
• addressing concerns of developing countries.69

Many WTO Members understand this to mean that full application by

standardizing bodies of the Committee’s six principles promotes the
development of standards that should be considered ‘international’.70 In
this context, ISO and other standards development organizations have a
crucial role to play in international trade and must follow these six
principles to ensure that the standards they develop are indeed
‘international standards’.

69
Decision of the Committee on Principles for the Development of International Standards,
Guides and Recommendations, G/TBT/1/Rev.9, p. 37.
70
See Submission of the United States on the Decision of the Committee, G/TBT/W/305, p. 2.

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Part III – Cross-Cutting Issues

The TBT Agreement specifically recognizes ‘the important contribution

that international standards and conformity assessment systems can make
[to further the objectives of the General Agreement on Tariffs and Trade
1994] by improving efficiency of production and facilitating the conduct
of international trade’.71 It therefore imposes an important obligation on
WTO Members as they prepare and adopt technical regulations: when
regulating, WTO Members must use relevant international standards
where they exist as a basis for their technical regulations, except when
they would be ineffective or inappropriate in achieving the goals of the
regulating country.

Several provisions follow from that basic obligation.

1. Perhaps most importantly in this context, if a technical regulation is

adopted for one of the legitimate objectives listed in the TBT
Agreement (such as the protection of human, plant and animal
health and safety) and is in accordance with relevant international
standards, it is presumed not to create an unnecessary obstacle to
trade. Therefore, regulations developed in accordance with relevant
international standards are presumed to comply with the TBT
Agreement. WTO Members wishing to challenge any regulation that
is in accordance with an international standard must overcome that
presumption in dispute settlement before the dispute settlement
panel reaches substantive claims, making it more difficult for the
challenging party to be successful.
2. With a view to harmonizing technical regulations on as wide a basis
as possible, WTO Members are expected to play a full part, within
the limits of their resources, in the development of relevant
international standards for products that they will be regulating. This
provision seeks to ensure that the relevant governments are involved
as stakeholders in the development of international standards by
private sector or other international standardizing bodies.
3. If a regulation is based upon an international standard, a WTO
Member is not legally obligated to follow the TBT Agreement’s
requirements for transparent development and adoption of
regulations. Generally, if a proposed technical regulation is not in
accordance with an international standard, and if the regulation may
have a significant effect on trade, WTO Members must:
– publish notices of the proposed technical regulation;
– notify other WTO Members of the products to be covered by the
proposed regulation;
– allow other WTO Members to comment upon the proposed
regulation, and take those comments into account.

This system encourages regulatory transparency and allows countries and

interested parties to work out trade concerns on regulations before they
come into effect. However, these transparency requirements presume

71
Recitals to the TBT Agreement.

94 Understanding ISO 26000

 Trade implications of ISO 26000

that if a regulation is in accordance with a relevant international

standard, then governments have already had a chance to participate in
the development of the referenced standard via the international
standardizing body’s development process. The provision serves as a
further incentive to harmonize technical regulations via use of
international standards.

Now let us consider the previous hypothetical illustration again, but

imagine that a relevant international standard has been used as a basis
for the technical regulation at issue, requiring products to carry a broad
label for consumer information purposes.72 Indeed, the language in this
hypothetical was drawn directly from the text of ISO 26000.73 The
situation changes drastically. The technical regulation will now be
rebuttably presumed not to be an unnecessary obstacle to trade – that is,
it is now understood to be compliant with a major part of the TBT
Agreement; in addition, the adopting country need not follow the
transparency provisions laid out in the TBT Agreement to help other
WTO Members learn of the regulation in advance. A WTO Member
wishing to challenge the regulation as being more trade restrictive than
necessary would be at a serious disadvantage in a WTO dispute
settlement proceeding. The regulation could seriously impact trade of
countless products between many countries in many industry areas,
thereby negatively affecting manufacturers, producers, workers and
ultimately consumers throughout the global supply chain, but would be
costly and difficult to challenge.

Legal and trade implications of ISO 26000

ISO 26000 would generally be considered an ‘international standard’
under the TBT Agreement, having been adopted by an international
standardizing body, ISO, at least in large part pursuant to the principles
of transparency, openness, impartiality and consensus, effectiveness and
relevance, coherence and addressing concerns of developing countries.
But ISO 26000’s scope and potential effects are different from the strictly
technical, systems-oriented, science-based or methodological standards in
ISO’s portfolio. Many standards in ISO are the result of efforts to
harmonize existing national, regional and international standards so that
technical objectives can be met while facilitating trade. But in the case of
ISO 26000, the harmonization that was required was of concepts,
principles and policies that, in some cases, are still being deliberated

72
A WTO dispute settlement body has interpreted the term ‘as a basis for’ quite broadly,
noting that an international standard is used ‘as a basis for’ a technical regulation ‘when it
is used as the principal constituent or fundamental principle for the purpose of enacting
the technical regulation’; and that the international standard is clearly not used ‘as a basis
for’ a technical regulation when it is contradictory: EC-Sardines, Appellate Body report,
WT/DS231/AB/R, adopted 26 September 2002, paras 240–48.
73
See ISO 26000, p. 57, Subclause 6.7.5.2, ‘Related actions and expectations’.

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Part III – Cross-Cutting Issues

within intergovernmental bodies and treaty organizations such as the

WTO, the United Nations, the International Labour Organization (ILO),
and the Organisation for Economic Co-operation and Development
(OECD), as well as within national and international courts of law.

ISO 26000 is therefore a ‘special case’ for ISO: the standard provides
guidance on how organizations can operate responsibly and in doing so
incorporates regulatory matters and social and public policy and
principles – including policies and principles on which international
consensus has been elusive in the intergovernmental bodies mentioned
above. Examples include:

• the treatment within the text of disputed concepts of international

norms, an organization’s sphere of influence, animal rights, sexual
orientation and responsibilities of government organizations;
• espousal of the ‘precautionary approach’ and ‘polluter pays’
principles;
• the application of international law to private parties.

In the course of the standard’s development, it appeared that ISO 26000

was at risk of becoming a forum for legitimizing policies that were not
able to get full consensus on the world stage – for example, the late
proposal by China to add language on ‘common but differentiated
responsibilities’, a concept that was at the time being hotly disputed in
the course of the negotiations under the United Nations Framework
Convention on Climate Change.

Further, ISO 26000’s relationship with the relevant international

intergovernmental bodies and treaty organizations was complex: while
ISO had agreements in place with several intergovernmental bodies such
as the ILO and UN Global Compact, in various drafts important principles
as developed in treaty organizations or in customary international law
were misapplied, described incorrectly or taken out of context. In a key
example, Special Representative of the United Nations Secretary-General
on Business and Human Rights, Professor John Ruggie, noted in 2009 that
he had serious concerns about the inconsistency in the use of the ‘sphere
of influence’ concept within the draft standard, as well as between the
draft standard and the framework for business and human rights that he
had been mandated to develop in the context of the United Nations.74
He then urged the Working Group tasked with drafting ISO 26000 to
ensure that references to ‘sphere of influence’ were consistent
throughout the document and with the UN framework. As it happened,
the task of ensuring consistency both within the ISO 26000 document and
with international law and guidance documents was required in many
other subject areas of the standard as well.

74
Ruggie, J (2009) ‘Note on ISO 26000 Guidance Draft Document’, available at
http://www.business-humanrights.org/media/documents/ruggie-note-re-iso-26000-nov-
2009.pdf

96 Understanding ISO 26000

 Trade implications of ISO 26000

While governments were involved from the beginning of the ISO 26000
initiative – and indeed had their own stakeholder group in the Working
Group on Social Responsibility tasked with developing the standard – the
legal and trade implications of the standard were late in being fully
understood. Most participants in the development of the social
responsibility standard wished to promote social responsibility overall,
but many dismissed the legal and trade concerns as being overly
academic or irrelevant to the concept of social responsibility. Experts in
law and trade matters came late to the process and were few in number.
However, during the course of the standard’s development the
government stakeholder group began to discuss a number of emerging
legal and trade concerns and worked to address these both within the
small group and with the larger Working Group.

First, it was evident that the existing legal framework under the TBT
Agreement did not adequately account for the possibility for misuse: that
an international standard might be embedded with public policy and
principles that could provide the basis for overly burdensome,
unjustifiable and difficult to challenge regulations and measures. Another
important issue for some governments’ representatives was the potential
for this standard to be interpreted by courts of law as a crystallization of
certain disputed concepts into customary international law.

A further issue was the potential for governments to require certification

to the standard as a condition for procurement or trade. For example, if
a country required products to contain labels stating that certification to
ISO 26000 had been met, this would be a conformity assessment
procedure under the scope of the TBT Agreement. This conformity
assessment procedure would require products to be able to meet the
standard’s guidance on numerous topics, despite the enormous difficulty
of such a task. Much of the language in the standard is not written in a
way that can be measured or audited so conformance would be difficult
to determine and likely to vary considerably from one organization to
another.

The United States, Indian and Canadian government experts in the

Working Group for ISO 26000, along with others in the government
group, were greatly concerned with the potential misuse of the standard,
reflecting concerns from both developing and non-European developed
countries. For this reason they advocated strongly for inclusion of special
language in the scope of the standard to address the risk of misuse.
Instead of seeking to edit all the text in the standard that would be
unacceptable from some governments’ standpoint in a treaty context, the
approach was to focus on limiting the applicability of ISO 26000 in courts
of law and in the WTO. Other experts, however, were concerned at what
they saw as attempts to weaken the application of the standard. Many

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Part III – Cross-Cutting Issues

experts expressed the desire to use the standard as part of public policy
activities, and follow the guidance in the standard in their countries’
policies and laws.

After a great deal of negotiation in the course of the standard’s

development, all concerned came to consensus on ‘disclaimer’ language
that would best address these various concerns. The final international
standard of ISO 26000 states, in the Scope clause:

This International Standard is intended to provide organizations with

guidance concerning social responsibility and can be used as part of
public policy activities. However, for the purposes of the Marrakech
Agreement establishing the World Trade Organization (WTO), it is
not intended to be interpreted as an ‘international standard’,
‘guideline’ or ‘recommendation’, nor is it intended to provide a basis
for any presumption or finding that a measure is consistent with
WTO obligations. Further, it is not intended to provide a basis for
legal actions, complaints, defences or other claims in any
international, domestic or other proceeding, nor is it intended to be
cited as evidence of the evolution of customary international law.75

Through the addition of this language in the text of the Scope, the
Working Group experts sought to prevent the application of the standard
to the provisions of the TBT Agreement that give preference to technical
regulations that are based upon international standards. It also provides
a guidepost for dispute settlement bodies or courts of law for any claims
based upon the use of ISO 26000. Further, to address the concerns that
certification to the standard would raise, the Working Group experts
agreed on strong language in several places in the standard designed to
dissuade parties from attempting to certify organizations to the standard:

This International Standard is not a management system standard. It

is not intended or appropriate for certification purposes or
regulatory or contractual use. Any offer to certify, or claims to be
certified, to ISO 26000 would be a misrepresentation of the intent
and purpose and a misuse of this International Standard. As this
International Standard does not contain requirements, any such
certification would not be a demonstration of conformity with this
International Standard.76

The language here emphasizes the inappropriateness of basing a

country’s regulations, conformity assessment procedures or procurement
contracts on the guidance provided in ISO 26000. What this language
does not do is prevent countries from adopting ISO 26000 as a national
or regional standard tailored to their own needs, to provide a basis for

75
ISO 26000, Scope, page 1.
76
Ibid. See also Introduction, p. vii and Annex A.

98 Understanding ISO 26000

 Trade implications of ISO 26000

their own public policies.77 Countries are still free to adopt regulations
based on national standards fashioned after ISO 26000 for government
procurement purposes, or to prevent trade in certain objectionable
products.

The impact of the ISO 26000 Scope language is simply that when
countries do impose trade barriers based on social responsibility guidance
provided in ISO 26000 (or indeed in their own national social
responsibility standards), they may be more easily challenged in the WTO
if there is a less trade restrictive method of reaching the countries’
legitimate social responsibility objectives. We are back to the first
hypothetical situation: a country may establish labelling requirements for
products that inform consumers of certain social responsibility aspects of
those products; but under their WTO obligations, the country may not do
so in a way that is an unnecessary obstacle to trade.

Conclusion
We may expect to see more international standards being developed in
the public policy sphere or with implications for public policy and
customary international law. ISO has specifically indicated its intentions in
the near term to clarify to governments that ‘ISO standards are voluntary,
do not seek to establish public policy, and bring substantial value as
efficient and cost effective tools in support of the implementation of
public policies and as an element of good public governance.’78

Many questions remain on how private sector standards operating in this

sphere may effectively work within the existing legal framework so as to
remain a positive factor in facilitating trade and supporting legitimate
regulatory activity. Will the disclaimer as it exists in ISO 26000 be
demanded in all such standards? Will the disclaimers be effective in
addressing the concerns of trading partners? Will the necessary experts in
international trade and law be involved in the development of such
standards from the earliest stages? Will ISO consider that a different
format for standards specific to public policy is appropriate, so as to
avoid the issues that naturally arise with the insertion of public policy
into technical standards?

77
Text in the standard exists to ensure this: ‘This International Standard is not intended to
prevent the development of national standards that are more specific, more demanding, or
of a different type.’ ISO 26000, Scope, p. 1.
78
ISO Strategic Plan 2011–2015, section 4.4, p. 9, available at
http://www.iso.org/iso/iso_strategic_plan_2011-2015.pdf. See also ISO’s ‘Principles for
Developing ISO and IEC Standards Relating to or Supporting Public Policy Initiatives,’
available at
http://www.iso.org/iso/
principles_for_developing_iso_and_iec_standards_related_to_or_supporting_public_policy_initiatives.pdf

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In any case, it is certain that ISO 26000 will have an enormous effect on
governmental considerations of international standards, and the relevant
government experts involved in similar international standardization
activities would do well to fully consider the range of legal and trade
implications of these standards as well as their own related national
measures.

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Social responsibility and cultural difference
Khawla Al-Muhannadi

East and West: is there a common ‘social responsibility’?

Does ‘social responsibility’ have a universal meaning? Is it a realistic
dream to aim for one set of guidelines for social responsibility for all
types and sizes of organization from all cultures, geographical and
economic categories, beliefs and backgrounds?

Within the context of ISO 26000, social responsibility has to show

sensitivity to the society it is directed to or working within. It has a
dynamic meaning that develops and evolves according to the needs and
development status of each society. Does this make an English social
responsibility different from an Egyptian one? Even more: is a Palestinian
understanding of the meaning of social responsibility the same as an
American understanding of the term?

I write from the perspective of the Arab World, which is 22 countries

inhabited by Arabic tribes, sharing much of the same history and culture
and is mostly Islamic. Although several languages are spoken in different
African and Asian countries from the Atlantic Ocean to the Red Sea and
Arabian Gulf, and from the Mediterranean to the Indian Ocean, classical
Arabic is still the common language.

Islam is a religion with a great focus on the importance of – and bases

many of its commandments, rules and regulations on – what is good for
society. It has very detailed sets of rules for controlling crime and for
protecting rights and property. It also has extensive teaching on
preventing crimes and social diseases that weaken society or allow more
powerful individuals to control others. Most of the verses in the Holy
Quraan and Hadeeth (the Prophet’s sayings) are about how to live in
society and to treat one another; they state that everyone is equal and
only distinguished by good manners.

The concepts of accountability and transparency within the discourse on

social responsibility share the general thrust of Hisbah in Islam. Within
this system, the Muhtasib or ‘judge’ and his office are responsible for
ensuring that people in important positions of state account for their
actions – especially those involving spending money. This is one of an
Islamic state’s strongest weapons against corruption. Similarly, many
issues relating to social responsibility come within the spirit of the

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Prophet’s sayings that ‘who cheats us is not one of us’. This general
position has been lost in the last few centuries, but it remains a gap that
has to be filled.

Does social responsibility as a concept and ISO 26000 as a set of

guidelines have the power and potential to fill this gap and answer the
hopes of so many NGO activists? In one of the first public NGO meetings I
held in Bahrain to introduce ISO 26000 and invite NGO input to
reviewing the text, some women’s NGOs and labour activists raised the
question as to whether ISO 26000 could stop corruption. Could it be used
to stimulate change and gain more rights?

Let’s take two examples from recent major events in the Arab World. In
Libya, Gaddafi declared himself the President of Libya 42 years ago and
has just stayed there. When anyone, encouraged by the Egyptian nation’s
victory, decided that enough was enough, reform had to happen and
that he had to step down, his answer was explicit (as stated in his
speeches): anyone who raises questions against him deserves to die and
he will make sure that this happens. And we have seen during recent
events in 2011 that he has cruelly kept his word while the world watched
people die.

Is this an area for social responsibility?

Obviously, the weapons he used were supplied by international firms,

firms that traded all types of weapon including gun machines, explosive
materials and biological weapons. But if we stopped there, we may
wonder whether questions of social responsibility should be raised only
at the time at which massacres and crimes are committed. Should our
concerns not have been raised a long time before when he started
expressing and practising his dictatorship and misusing power to suppress
civilians? Could thousands of lives and the misery of a nation have been
spared?

On the other hand, Iraq is an example at the other extreme. Here, the
United States, as a world power, decided to invade another country and
used depleted uranium shells and internationally forbidden weapons
against Iraqis who stood against the invasion and wanted to defend their
country (whether they liked the US-declared target, Saddam Hussein, or
not). Subsequently the US and alliance forces effectively permitted
looting by destroying the Iraqi army and police, thus allowing hungry,
angry and confused people – as well as those with criminal intent – to
loot freely, including from the Iraqi Museum that is a part of the world’s
heritage and the pride of the Iraqi people.

From an NGO perspective, one could assume that NGOs concerned with
human rights, the rights of women, children and indigenous people,
heritage, ethics, art and culture, the environment, religious dialogue,
peace, and more, should have raised their voices loudly before the

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 Social responsibility and cultural difference

invasion to show the world the likely results and impacts on people, the
environment and culture if the United States did invade Iraq.

The media was focusing during those months, weeks and days before the
invasion on scaring the world with what Saddam Hussein was capable of
doing, using reality TV-like simulations of places that he could possibly be
hiding weapons of mass destruction. As part of their social responsibility,
the media could have played a much more constructive role in stopping
the invasion by suggesting better alternatives in co-operation with other
stakeholders. They could have tried to discover the truth (that was
disclosed years later after Iraq had been destroyed) about the alleged
weapons of mass destruction. They could also have reported how much
Iraqi people suffered during the 10 years of sanctions that killed more
than half a million Iraqi children through lack of health care and medical
necessities. The media could also have shown the simple fact that
Saddam Hussein and Al-Qaeda are two quite different issues that are not
at all connected.

All stakeholders could have contributed far more effectively. Industry

could have denied support to stop those preparing for war. The skills of
research, services and academia could have supported NGO efforts
through systematic studies aimed at avoiding the killing of so many
thousands. Labour unions could have called for boycotts of the invading
forces as well as the regime. Similarly, consumer organizations could have
contributed in a call to boycott organizations involved in the war.

Of course, this is from the perspective of an Arabic NGO and an

individual who viewed the Iraqi invasion as illegal and unethical – and
viewed the people of Iraq as brothers and sisters and not just as
appropriate collateral damage for the destruction of one person: Saddam
Hussein. Nevertheless, social responsibility could have played a crucial role
in protecting people and helping to start a democratic process in the
region.

Dealing with cultural difference within the ISO 26000

process
Within the ISO 26000 team of experts attempting to reach a compromise
on the issue of how to describe sexual orientation, cultural differences
showed clearly, first in the way in which sexual orientation was viewed
and, secondly, in the way the view was expressed. Furthermore, it showed
in the way in which compromises were reached and the way in which
individuals reacted to the final decision that was agreed upon.

From the point of view of a Western European NGO, sexual orientation

was a big issue that should be highlighted to protect the minority group
interest. From a conservative Islamic (and even Christian) point of view,
this term should not be used in the standard. Some Western European

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NGOs, together with some other European voices, assumed that the
conservative view resulted from being against the human rights of the
minority group, and decided that the best way of dealing with it was to
show some teeth. From the Islamic point of view, the Europeans were
trying to impose their culture, were showing no respect for important
elements of the cultural and ethical values of the East, and threatened to
vote against the standard if it did not deal with sexual orientation
explicitly.

The two groups were talking about, rather than to, one another – each
trying to build more alliances. The Islamic perspective was stronger in
terms of the number of countries and stakeholder groups: all
stakeholders from all Islamic countries shared the same view. All Islamic
countries supported the conservative perspective. This group was capable
of swinging the vote in at least six countries (and possibly 18) according
to how the issue was decided. The European group did not have such
potential impact on member state voting. This again is an issue of
cultural difference.

When trying to reach a solution, the Islamic group demanded that the
term ‘sexual orientation’ be removed entirely from the standard. It was
considered totally unacceptable to include a term like this in an
international standard. The argument was also that there are many issues
of similar significance that are not mentioned in the standard, so why
persist on this particular point when there is such strong feeling against
it? The only interpretation seemed to be disrespect to a culture.

The argument from the European group was that if this particular
vulnerable group was not mentioned, even as an example, then the
standard did not recognize that it could be an issue. To inject more heat
into the argument, the European group said that some of its members
had already reported the inclusion of the term to their supporters and
they could not now explain that it had been removed. Against this was
the argument that the stakeholder representatives of all Arabic and
Islamic countries could not ask their national standards bodies to vote for
the standard when a very small, but culturally important, request had
been ignored.

The issue was resolved through practising what ISO 26000 preaches.
Volunteers from three continents and three different cultures worked
together to reach a solution. The first proposal was to bring everyone
with strong feelings from both sides together in one room to debate the
issue. There was a debate about how positive the results of this approach
would be, but an agreement was reached to give it a try. This
achievement took several pre-meetings and consultations and strong
persistence from the three volunteers. As the room was filling, everyone
realized that this was not a normal unresolved issues session. The number
of people involved was much larger and the atmosphere was becoming
more and more heated.

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 Social responsibility and cultural difference

The session started with strong facilitation with the aim of stopping
either group from saying something that would alienate the other group.
Each group was asked to summarize its point of view in a
non-confrontational way to allow the other group to see where it was
coming from. The facilitators had an idea in advance as to where they
wanted to lead the discussion. They succeeded in breaking the ice and
getting people together in one place, but by now everyone was
addressing the facilitators. So the talk quickly became heated, each group
had more to say, and the volume increased.

A fourth facilitator, from a fourth continent and who was older than
everyone in the room, was invited to co-chair. He took the lead and was
generous in the amount time given to each person who wanted to speak.
Everyone started to address him. It seemed as though the meeting would
never end. Yet his comments and the way he moved between the two
groups in trying to understand where the issues were somehow made
people confident that their points of view has been heard.

This led the discussion to a new level at which solutions were invited, and
the meeting ended with a promise to return and vote for one or other of
the solutions. The facilitators had to formalize the different solutions
proposed into three lines of thought and asked the full Working Group
to give the committee one more day to reach an agreement before the
issue was finalized.

It took a further meeting of the European and Islamic groups to decide

to exclude one of the three proposals and discuss the other two,
concluding with a compromise such that the meaning stayed but the
term went. Yet another meeting was scheduled to agree on a new term
for sexual orientation that still protects the human rights of a vulnerable
group but did not provoke cultural issues. ‘Personal relationship’ was the
new term agreed after a long discussion. The meaning of personal
relationship can be even broader than social responsibility covering issues
of human rights, transparency and justice. One person from the European
group objected but agreed to let it go in order to reach a compromise.
Four people from the Islamic group expressed their rejection of the idea
of rephrasing and demanded deleting the examples completely. It took a
special side session in Arabic, facilitated by one of the four facilitators, to
convince them to agree to the compromise.

In the plenary session, the new term was welcomed after a presentation
by one of the facilitators and everyone was relieved. Although a
European member raised his objection in plenary, it was not sustained.
Outside the plenary, he expressed his content with the way things had
gone. On the other hand, while the Islamic group welcomed reaching a
compromise, outside the plenary some expressed their uneasiness about
it. This arose because the European member had expressed a strong
feeling in the plenary when everyone agreed to the compromise and he
made it sound as if he alone was concerned about the issue and the Arab

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group was not. For the Arab group this felt like a betrayal of the
agreement, but everyone was able to find reasons to feel at ease with it
eventually.

The compromise and the process by which it was reached, as the

presenter from the sexual orientation committee said, showed practising
the social responsibility that was preached. The chain of events that led
to compromise is a great lesson for understanding cultural differences
and how they should be handled in the details of social responsibility.
Giving people a chance to express fully their point of view works for all
cultures.

Conclusion: social responsibility and Islam

When attempting to list the social responsibility initiatives and
programmes of the Arabian Gulf region and compare this to those from
Europe and the USA, it is evident how the meaning of social
responsibility varies according to the expectations of organizations and
individuals and the needs of society. In societies where special needs and
orphans, for example, are yet to be acknowledged by society, many social
responsibility activities and initiatives are directed towards those issues.
Priority is given to health care and relieving patients with chronic
diseases where life can be saved if specialized required care is provided in
time, such as that for sickle cell anaemia, heart conditions and kidney
failure. Orphans are another clear subject for social responsibility
projects, especially when the state provides protection, shelter and basic
education for all, but specialized training or jobs are provided for only a
few.

Arabic culture, originating in the desert, is based on helping those found

to be hungry or thirsty. It states the social responsibility rule of three
days’ hospitality for those who ask for protection, and states that this is
done without question as to their identity or nature of their problems.
Such individuals are then taken care of to be able to continue their
journey in the desert. Otherwise, they are asked to identify themselves
and provide an explanation of what they are running from; the tribe will
then decide if it will protect a person in that situation as a member of
the tribe, or simply provide water and ask the person to leave. When
Islam came about 1 500 years ago, the Prophet stated that he was sent to
complete and make perfect its high ethical values and practices.

The social responsibility principles of ISO 26000 are deeply rooted in

Islamic teaching, starting from the zakat, according to which a
percentage of what a person owns goes to help the needy. Also, through
the waqf system a person or a family can continue to help the needy and
contribute to society after their death, bequeathing farms, land or water
wells. The owner signs papers to prevent (waqf) any use of his property
other than for charitable purposes.

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 Social responsibility and cultural difference

People in the Islamic community expect to be supported by one another

as an Islamic obligation. Widows, orphans, the elderly, sick and those in
need have a right to everyone’s money and the state’s budget. According
to Islamic Sharee’ah (law), it is not considered charity to help others in
these ways but rather a compulsory duty, similar to a tax although not
named as such. Helping other people in society to solve their financial or
social problems is ranked more highly than going to pray in the mosque.

The meaning of Islam is the way you deal with others. Sustainable
development and its basic idea of taking what we need and considering
future generations is embedded in many Islamic instructions from the
Prophet such as ‘if it is the day of justice and you have a palm tree in
your hand, plant it first’ and ‘none of you is a believer till he loves for
others what he loves for himself’. Justice and accountability is high in the
Islamic teaching (‘nothing can possibly stop answering a prayer coming
from someone who was treated unfairly’ and ‘be wary of a prayer from
someone you treated unfairly’).

A summary of the Islamic teaching is the Prophet’s repeated

commandment: ‘Every one of you is responsible for whatever happens to
those who are shepherded by him’, and under this comes a long list of
responsibilities: parents towards their children, teachers towards students,
rulers towards citizens, and even a farmer towards his plants and animals.
This strengthens the feeling that God is watching and even if no one
knows about it, you are rewarded in life and the life hereafter for your
deeds. Creating a social responsibility consciousness is therefore basic for
ensuring the continuity of the practice. In fact, if you teach one person
something and he propagates it, you are rewarded for your first action
and also every time the other person practises something similar. This
principle is very close to the idea of supply chain responsibility and the
sphere of influence concept. The way in which Arab and Muslims
understand social responsibility is part of their duty in life and part of
giving their life a meaning and a value. A Muslim does not live for
himself only, and their entire life is a test of how well he performs.

It is interesting to record how the ISO 26000 guidelines are translated in

Islamic banks and organizations declaring that their practices are in
accordance with Sharee’ah. One insurance company in 2010 was awarded
a prestigious award, ‘Best Islamic Insurance Company’, for its corporate
social responsibility in accordance with the spirit of Islamic law. The main
reason for that was its initiative that made charitable donations more
‘sustainable’. Customers agreed to donate for a certain number of years.
Under circumstances that might prevent the donor from making a
donation (such as disability or critical illness), the company would
continue to make donations on behalf of the donor. This gives a brief
insight into the way in which social responsibility is currently interpreted
by Islamic banks and the 500 institutions worldwide that follow similar
principles. It will be even more interesting to follow this up in five years’

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time and see how these Islamic financial institutions then define
themselves in terms of social responsibility.

108 Understanding ISO 26000

Standards and the state
Chen Wang

The economic and social development of the world is entering a new

historical era, and countries of the world are paying more attention to
social harmony and sustainable economic and social development. Social
responsibility has become a requisite for the survival and development of
all types of organization.

Acting as a remarkable vehicle for providing guidance on how to

integrate the ideas and requirements of social responsibility throughout
an organization, the ISO 26000 standard is typically used to effectively
promote social responsibility awareness and progress, as well as to
achieve the aims of economic, social and environmental sustainable
development. Meanwhile, advocating and encouraging the idea of social
responsibility through standards is also conducive to innovations in ideas
of development and to changes in the mode of development. It will help
to stimulate creativity, enhance brand image and greatly upgrade the
quality and level of the comprehensive national development.

The state, while a participant of international standard development,

plays an essential role in international affairs and national governance.
At the same time, as the representative of the public interest, the state
also possesses the ability to promote and balance social responsibility
practice. In regard to this, it is necessary to clearly articulate the
relationship between the standard and the state and the proper
orientation of the state’s role and policy options.

The relationship of ISO 26000 to the state and national

governance
The proper functioning of the state is indispensable for social
responsibility and sustainable development. Stakeholders from
government, the public, news media, employees, consumers,
non-governmental organizations, investors, academics and guilds can
assist organizations in their efforts to operate in a socially responsible
manner in many ways.

The role of the state is essential in ensuring the effective application of

laws and regulations so as to foster a culture of compliance with the law.
Governmental organizations, like any other organization, may wish to
use this international standard to inform their policies, decisions and
activities related to aspects of social responsibility. However, taking into

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Part III – Cross-Cutting Issues

consideration societal, environmental, legal, cultural, political and

organizational diversity, as well as differences in economic conditions, the
way of using ISO 26000 varies between different countries. How to
implement this international standard depends on a country’s basic
condition, and the state has the right to adjust the standard accordingly.

ISO 26000 cannot replace, alter or in any way change the duty of the
state to act in the public interest. ISO 26000 does not provide guidance
on what should be subject to legally binding obligations; neither is it
intended to address questions that can only properly be resolved through
political institutions. Because the state has the unique power to create
and enforce the law, it is different from organizations. For instance, the
duty of the state to protect human rights is different from those
responsibilities of organizations with regard to human rights that are
addressed in this international standard.

The state and social responsibility

The state should promote the progress and lead the development of
social responsibility in the ways of multi-stakeholders engagement, and
so on. In general, the state’s roles in promoting social responsibility are
defined under three major categories: regulator, promoter and supervisor
(see Table 1). Specific policy options in China will be introduced
combining practice as follows.
Table 1 – Roles and policy choice of the state when promoting social
responsibility

Role Policy tools

Regulator Responsibility legislation and management standards
Promoter Responsibility dialogue; promoting introduction;
responsibility report; responsible procurement;
responsible investment; stimulation mechanism
Supervisor Supervision administration; responsibility performance
evaluation; responsibility label

Regulator

Traditional theory holds that the external and internal nature of market
failures calls for a social demand for national regulation. Regulations are
the corrective measures and restrictions on behaviour imposed by the
state. In situations where organizational behaviour is inconsistent with
the common goal of society, the state can intervene and constrain social
and economic activities through laws and regulations, so as to prevent
and eliminate the many factors that cause market failure, and encourage
the optimal allocation of resources. Therefore, when assuming the role of
the regulator in the process of social responsibility development, the

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 Standards and the state

state should develop relevant policies and regulations and establish

technical standards to promote social responsibility.

• Responsibility legislation is the effective way to insist on a legal and

honest approach to business operation. Organizations are asked to
comply with regulations and laws, public ethics, commercial
conventions and trade rules. They should also fulfil their tax
obligations, protect the interests of investors and creditors, protect
intellectual property rights, maintain business creditability, oppose
improper competition and eradicate corruption in commercial
activities.
• Responsibility standards are the foundation of an organization’s
social responsibility performance evaluation. Social responsibility
should be integrated into corporate governance and business
strategy, and implemented at all levels of its daily operations.
Organizations should also identify a department to handle social
responsibility affairs, gradually building a statistical index and
assessment system for social responsibility. For those organizations at
the leading edge of social responsibility, a formal performance
evaluation system can be set up.

Promoter

As the promoter of social responsibility, the state can utilize its own
administrative resources to carry out social responsibility advocacy,
education and research work, focusing on cultivating the idea of social
responsibility, improving awareness and level of take-up. In addition,
government procurement and other measures should be adopted to give
economic incentives to organizations to fulfil their responsibilities. This
will guide the flow of socially responsible investment and encourage
organizations to actively fulfil their social responsibility.

• Setting up a communication platform for social responsibility

dialogue. This is suggested in order to enforce communication
between organizations and support international co-operation.
Organizations are encouraged to exchange concepts and experience
in fulfilling social responsibility with other organizations at home
and abroad, benchmark with the best social responsibility practices
and summarize their own experience, so as to constantly improve
their work. They should conduct more dialogue and communicate
with relevant international organizations, and take part in
international social responsibility standard development.
• Disseminating and promoting social responsibility information and
share and encourage the publishing of social responsibility reports.
Organizations with experience of social responsibility work should
establish an information dissemination mechanism, providing updates
and regular information about social responsibility performance and
sustainable development and of plans and measures concerned with
carrying out social responsibility. Meanwhile, a regular

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communication and dialogue mechanism concerning social

responsibility should be established, so that the organization can
receive feedback from its stakeholders and in turn give its response
quickly. All information and feedback should be public so that the
organization can receive supervision from stakeholders and society.
• Strengthening training and education to establish awareness of social
responsibility. Organizations should thoroughly understand the
significance of social responsibility and attach great importance to it
in their working plans and daily business activities. Organization
leaders should arrange for the promotion of social responsibility
within their organization, adopt corresponding new ideas and
methods in management and strive to establish a corporate culture
with social responsibility at its centre.

Supervisor

After enacting laws and regulations relating to the promotion of social

responsibility, the state should effectively use administrative means,
auditing and certification to help its supervision of law enforcement. If
the cost of social responsibility is far greater than its benefit,
organizations will not consciously fulfil their social responsibilities, and
the ‘bad money drives out good money’ phenomenon will appear in the
entire community. Therefore, the state should strengthen supervision
enforcement, which is undertaken by the supervisor role.

• Reinforcing state supervision for better fulfilment of social

responsibility. Organizations should improve corporate governance,
and practise scientific and democratic decision making. They should
optimize their development strategy, focus on and strengthen their
core businesses, reduce management layers and distribute resources
in a reasonable way. Business administration and the capabilities of
control and supervision should be enforced. Examples include
minimizing operational costs, strengthening risk precaution,
increasing the investment profit ratio and enforcing market
competitiveness.
• Promoting the establishment of evaluation systems to improve social
responsibility performance. In this way, organizations could
constantly improve their ability to make sustainable profits. An
evaluation system can help to improve product and service quality,
strengthen resource conservation and environmental protection,
promote independent innovation and technological advancement,
ensure production safety, protect the legal rights of employees and
participate in social public welfare programmes.

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 Standards and the state

ISO 26000 and its applications for the state in increasing

social responsibility
ISO 26000 is the most comprehensive summary of social responsibility
developed so far, and its recommendations are of wide applicability and
provide flexibility and room for manoeuvre in their application. The
ISO 26000 standard can be used as a reference point for states in
encouraging social responsibility. In the process of promoting social
responsibility – according to which of the roles of regulator, promoter or
supervisor is taken – a state can select the corresponding policy tools and
develop national standards in line with local circumstances while
referring to the core concepts, principles and fundamental practices of
responsibility, and to the social responsibility core subjects and issues of
ISO 26000. Development is founded on responsibility, and standards can
lead the way. It may be expected that ISO 26000 will bring about a bright
future for the world’s economic, social and environmental development.

Understanding ISO 26000 113

The meaning of ‘sphere of influence’ in ISO 26000
Stepan Wood

Introduction
One of the key controversies in the drafting of ISO 26000 was what role,
if any, the concept of ‘sphere of influence’ should play in social
responsibility. The debate came to a head at the last meeting of the ISO
Working Group on Social Responsibility (WGSR) in Copenhagen in June
2010, after an intervention by the Special Representative of the United
Nations Secretary-General on Business and Human Rights (SRSG),
Professor John Ruggie. Essentially, it is a debate about how to draw the
outer boundaries around an organization’s social responsibility. The
sphere of influence concept offers one approach to answering this
question, based on the proposition that every organization has a certain
domain within which it can influence actions and outcomes through its
relationships. For many, sphere of influence is a useful metaphor for the
extent of an organization’s social responsibility. Many others, including
the SRSG himself, have argued that it is ambiguous, misleading, based on
flawed moral premises and susceptible to strategic manipulation.

The purpose of this chapter is not to evaluate the merits of this debate
but to examine how the concept of sphere of influence is articulated in
ISO 26000 and the extent to which it responds to critics’ concerns.
ISO 26000 responds to the complaint that sphere of influence is
ambiguous and misleading in two ways. First, it avoids the main source of
conceptual ambiguity identified by the SRSG, the conflation of ‘influence
as impact’ with ‘influence as leverage’. Influence as impact refers to the
impacts caused by an organization’s decisions and activities; influence as
leverage refers to an organization’s capacity to influence other parties’
decisions to act or refrain from acting in certain ways. ISO 26000 defines
sphere of influence exclusively in terms of leverage. Second, ISO 26000
avoids the main source of operational ambiguity identified by the SRSG,
the tendency to operationalize sphere of influence in terms of the
potentially misleading criterion of ‘proximity’. ISO 26000 eschews this
problematic criterion when operationalizing the concept of sphere of
influence.

As for the critics’ third main complaint, ISO 26000 is ambivalent on the
normative question of whether responsibility should be based on
leverage. It is important to distinguish between two issues that are often
blurred in social responsibility discourse: the first is the distinction
between influence as impact and influence as leverage; the second is

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between negative and positive responsibility. A negative responsibility is

one that calls upon an actor to ‘do no harm’; a positive responsibility is
one that calls upon an actor to ‘do good’. Taking these two distinctions
together, there are four varieties of influence-based social responsibility:

• impact-based negative responsibility;

• impact-based positive responsibility;
• leverage-based negative responsibility; and
• leverage-based positive responsibility.

ISO 26000 incorporates all four, although it favours impact-based

responsibility.

Finally, ISO 26000 responds partially to the critics’ fourth complaint about
strategic gaming.

The idea of sphere of influence

The concept of sphere of influence was introduced into social
responsibility discourse by the UN Global Compact, which calls on
signatories to embrace, support and enact its ten principles ‘within their
sphere of influence’.79 This approach assumes that every organization has
a zone within which it has significant influence over social or
environmental conditions, and outside which it does not. The notion of a
sphere offers a crude metaphor for the array of relationships through
which an organization can act upon the world around it. It is often
portrayed as a series of concentric circles (e.g. BLIHR et al., 2006: 8; Baab
& Jungk, 2009: 2). The UN Global Compact Office, for example, puts the
workplace in the centre, moving outward to the supply chain,
marketplace, community and government (SRSG, 2008a: 4). The sphere of
influence model assumes that the organization’s degree of influence
diminishes with distance from the centre (ibid.).

The nature and degree of influence are highly fact-specific, depending on

an organization’s size, geographic scale of operations, resources,
technology, knowledge, ownership, governance and strategic position in
particular networks or communities, the issues at stake, and other factors
(Gasser, 2007). Nonetheless, many proponents of the concept assume that
influence is correlated with size: the larger the company, ‘the larger the
sphere of influence is likely to be’ (OHCHR, 2005: 14).

Sphere of influence is often operationalized in terms of proximity: it

‘tends to include the individuals to whom [the organization] has a certain
political, contractual, economic or geographic proximity’ (ICHRP, 2002:

79
United Nations Global Compact, ‘The Ten Principles’, available at
http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html (accessed 5
February 2011).

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136; OHCHR, 2005; 14). The online ’Guide for Integrating Human Rights
into Business Management’ published jointly by the Business Leaders
Initiative on Human Rights, UN Global Compact Office and the Office of
the United Nations High Commissioner for Human Rights (OHCHR)
explains the proximity principle:

The extent of a company’s ability to act on its human rights

commitment may vary depending on the human rights issues in
question, the size of the company, and the proximity between the
company and the (potential) victims and (potential) perpetrators of
human rights abuses ... The closer a company is to actual or potential
victims of human rights abuses, the greater will be its control and
the greater will be the expectation on the part of stakeholders that
the company is expected to support and respect the human rights of
proximate populations. Similarly, the closeness of a company’s
relationship with authorities or others that are abusing human rights
may also determine the extent to which a company is expected by its
stakeholders to respond to such abuse.80

Criticism of sphere of influence

The sphere of influence approach has come in for criticism, particularly
after it was incorporated in the ill-fated Draft United Nations Norms on
the human rights responsibilities of transnational corporations
(Sub-Commission on the Promotion and Protection of Human Rights,
2003: art. A.1 (‘spheres of activity and influence’); Weissbrodt, 2008). The
SRSG has written that ‘while sphere of influence remains a useful
metaphor for companies to think broadly about their human rights
responsibilities and opportunities beyond the workplace, it is of limited
utility in clarifying the specific parameters of their responsibility to
respect human rights’ (SRSG, 2008a: 6).

One problem with the concept is imprecision. Until ISO 26000 there was
no authoritative definition of the concept (OHCHR, 2005: 14; Gasser,
2007). The SRSG criticizes the sphere of influence model for failing to
distinguish between actors whose rights might be affected negatively by
the company’s practices and those over whose actions the company might
have leverage (SRSG, 2008a; 6).

80
Business Leaders Initiative on Human Rights, United Nations Global Compact Office and
Office of the United Nations High Commissioner for Human Rights, ‘A Guide for
Integrating Human Rights into Business Management’ (2nd ed.), ‘Global Business Case:
Supporting Tools’, available at
http://www.integrating-humanrights.org/global_business_case_sphere_of_influence
(accessed 10 February 2011). The passage is adapted from UN Global Compact and OHCHR,
2004: 17, 21.

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It thus conflates two different meanings of ‘influence’:

One is ‘impact’, where the company’s activities or relationships are

causing human rights harm. The other is whatever ‘leverage’ a
company may have over actors that are causing harm or could
prevent harm. (Ibid.)

Recognizing that activities and decisions may also have positive effects,
ISO 26000 defines ‘impact’ as a ‘positive or negative change to society,
economy or the environment, wholly or partially resulting from an
organization’s past and present decisions and activities’ (Subclause 2.9).
Influence as impact thus refers to an organization’s direct or indirect
contribution to positive or negative outcomes. Influence as leverage
refers to an organization’s ability to influence the decisions or activities
of other organizations or individuals through its relationships.

Secondly, the SRSG argues that operationalizing sphere of influence in

terms of ‘proximity’ is problematic:

What constitutes ‘political proximity’, for example? The most intuitive

meaning of proximity – geographic – can be misleading. Clearly,
companies need to be concerned with their impact on workers and
surrounding communities, but their activities can equally affect the
rights of people far away from the source, as, for example, violations
of privacy rights by Internet service providers can endanger dispersed
end-users. (SRSG, 2008a: 6).

The spatial metaphor of a sphere of concentric circles, with influence

declining from one circle to the next, can therefore be misleading (SRSG,
2008b: 19).

Next, the SRSG rejects sphere of influence as a basis for assigning human
rights responsibility on normative grounds because ‘it requires assuming,
in moral philosophy terms, that “can implies ought”’ (SRSG, 2008a: 5). In
his view, ‘companies cannot be held responsible for the human rights
impacts of every entity over which they may have some leverage, because
this would include cases in which they are not contributing to, nor are a
causal agent of the harm in question’ (ibid.). The responsibility to respect
human rights, he concludes, should be limited to situations where a
company is contributing directly or indirectly to negative impacts.

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Finally, the SRSG argues that assigning responsibility on the basis of

influence invites strategic gaming:

the proposition that corporate human rights responsibilities as a

general rule should be determined by companies’ capacity, whether
absolute or relative to States, is troubling. On that premise, a large
and profitable company operating in a small and poor country could
soon find itself called upon to perform ever-expanding social and
even governance functions – lacking democratic legitimacy,
diminishing the State’s incentive to build sustainable capacity and
undermining the company’s own economic role and possibly its
commercial viability. Indeed, the proposition invites undesirable
strategic gaming in any kind of country context. (SRSG, 2010: 14)

In summary, Professor Ruggie concludes that the scope of the corporate

responsibility to respect human rights ‘is not a fixed sphere, nor is it
based on influence’ (ibid.: 8). Rather,

Scope is defined by the actual and potential human rights impacts

generated through a company’s own business activities and through
its relationships with other parties … Such attributes as companies’
size, influence or profit margins may be relevant factors in
determining the scope of their promotional CSR activities, but they
do not define the scope of the corporate responsibility to respect
human rights. Direct and indirect impacts do. (Ibid.: 13)

The critique of sphere of influence has gained considerable traction. The

ISO Working Group on Social Responsibility made substantial changes to
the draft ISO 26000 in response to the SRSG’s concerns, expressed in SRSG
(2009). His three-part ‘Protect, Respect, Remedy’ framework, in the
context of which his critique of the sphere of influence approach was
articulated, has been endorsed by the United Nations Human Rights
Council. The Draft UN Norms, with their ‘spheres of activity and
influence’, are a dead letter. On the other hand, sphere of influence
features prominently in ISO 26000 and was recently reaffirmed in the UN
Global Compact.81 The concept still has a ‘life of its own’ (SRSG, 2006: 10).

My purpose here is not to assess the merits of the sphere of influence

debate. Rather, it is to consider how the concept is articulated in
ISO 26000 and the extent to which it responds to Professor Ruggie’s
concerns. At the outset it is worth noting that he rejects the sphere of
influence approach only in relation to the corporate responsibility to
respect human rights, while recognizing that it can be useful in other
contexts (SRSG, 2008a: 6, 8; SRSG, 2009: 2).

81
United Nations Global Compact Office, ‘Business and UN Raise the Bar for Corporate
Practices in “New York Declaration”’, available at
http://www.unglobalcompact.org/news/53-06-25-2010 (accessed 5 February 2011).

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Sphere of influence in ISO 26000

ISO 26000 defines social responsibility as:

responsibility of an organization for the impacts of its decisions and

activities on society and the environment, through transparent and
ethical behaviour that

• contributes to sustainable development, including health and the

welfare of society;
• takes into account the expectations of stakeholders;
• is in compliance with applicable law and consistent with
international norms of behaviour; and
• is integrated throughout the organization and practised in its
relationships. (ISO 26000, Subclause 2.18)

Relationships refer to ‘an organization’s activities within its sphere of

influence’ (ibid.). Sphere of influence is thus integrated into the
definition of social responsibility. The term ‘sphere of influence’ appears
34 times in ISO 26000 and is discussed at length in two subclauses (5.2.3
and 7.3.3). Sphere of influence, in short, is one of the central concepts in
ISO 26000.

ISO 26000 defines sphere of influence as ‘range/extent of political,

contractual, economic or other relationships through which an
organization has the ability to affect the decisions or activities of
individuals or organizations’ (2.19). This responds to the SRSG’s main
concern about conceptual ambiguity, the conflation of ‘impact’ with
‘leverage’. ISO 26000 avoids this problem by defining sphere of influence
strictly in terms of leverage although, as we shall see, this does not imply
that responsibility should be based on leverage as a normative
proposition.

The definition also responds to the SRSG’s concern about the limits of the
spatial metaphor of concentric circles by making clear that sphere of
influence is a relational rather than spatial concept. While the term
‘range/extent’ is awkward, it is best understood as referring to the variety
of the organization’s relationships and the degree of its influence. The
definition goes a long way towards liberating the concept from its spatial
origins.

ISO 26000’s definition of sphere of influence does not refer to ‘proximity’.

Proximity is mentioned only three times in the standard, and each time
physical proximity is clearly meant (6.3.4.1, 6.8.1, 7.3.3.1). Sphere of
influence is operationalized in terms of an open-ended set of contextual
factors that includes typical sources of influence (ownership and
governance, economic relationships, legal or political authority and public
opinion), factors affecting the degree of influence (physical proximity,
scope, length and strength of the relationship) and means of exercising

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influence (contractual terms, public statements, stakeholder engagement,

investment decisions, knowledge dissemination, joint projects, lobbying,
media relations, promotion of good practices, and partnerships with
other organizations, among others) (7.3.3.1, 7.3.3.2).

Professor Ruggie’s third complaint with sphere of influence is that it

assumes, as a normative matter, that leverage gives rise to responsibility.
ISO 26000 is ambivalent on this point. The definition of social
responsibility, the passages devoted to guidance on sphere of influence
(5.2.3 and 7.3.3) and the subclause on human rights (6.3) adopt Professor
Ruggie’s position more or less; but numerous other passages appear to
embrace a leverage-based conception of responsibility. To make sense of
this issue, it is important to distinguish between two dimensions of
variation that are often blurred in discussions of the relationship
between influence and social responsibility. The first is the distinction
introduced earlier between influence as impact and influence as leverage.
The second is the distinction between negative and positive responsibility.

A negative responsibility is one that calls upon an actor to do no harm; a

positive responsibility is one that calls upon an actor to do good.
Negative responsibility is often couched in terms of avoiding, preventing,
minimizing or eliminating some undesired state of affairs, positive
responsibility in terms of supporting, promoting, improving, fulfilling or
otherwise contributing to some desired state. The corporate responsibility
to respect human rights, as articulated by the SRSG, is a negative
responsibility: to exercise due diligence to avoid contributing to human
rights violations. A responsibility to support the fulfilment of human
rights is a positive responsibility.

The negative/positive responsibility distinction is not the same as the

distinction between a responsibility to act and a responsibility to refrain
from acting. A negative responsibility to ‘do no harm’ is not merely
passive but entails affirmative steps (SRSG, 2008b: 17; ISO 26000,
Subclause 6.3.2.2). Indeed, it is clear that ‘due diligence’ demands
affirmative steps.

ISO 26000 embraces both positive and negative dimensions of social

responsibility. It encourages organizations, for example, to ‘respect and,
where possible, promote’ fundamental human rights (4.8) and ‘respect
and promote’ specified environmental principles (6.5.2.1). In this respect
ISO 26000 is more like the UN Global Compact, with its emphasis on
embracing, supporting and enacting, than the ‘Protect, Respect, Remedy’
framework, which restricts positive responsibilities to states.

Taking the impact/leverage and negative/positive distinctions together,

we can distinguish among four varieties of influence-based social
responsibility (Table 2). The vertical axis represents the operative
definition of influence: influence as impact or influence as leverage. The
horizontal axis represents the character of responsibility: negative (‘do no

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harm’) or positive (‘do good’). The potential scope of social responsibility

is smallest in the top left-hand cell, expands as one moves down or to the
right, and is greatest in the bottom right-hand cell.
Table 2 – Four varieties of influence-based social responsibility

Impact-based negative responsibility, which corresponds to the SRSG’s

formulation of the corporate ‘responsibility to respect’, is found in the
upper left-hand cell. Under this approach, an organization has a
responsibility to avoid or minimize the negative social and environmental
impacts of its own activities and decisions. It has a responsibility, in other
words, to avoid contributing to negative social and environmental
impacts directly or through its relationships with other actors. An
example is the responsibility not to be complicit in human rights abuses
committed by third parties.

Under leverage-based negative responsibility (bottom left-hand cell), an

organization has a responsibility to use its leverage to avoid or minimize
the negative social and environmental impacts of the decisions and

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activities of other actors with whom it has relationships, regardless of

whether it is contributing to such impacts. A responsibility to take steps
to encourage other parties to minimize pollution or avoid corruption,
even where the organization is making no contribution to such pollution
or corruption, is an example of leverage-based negative responsibility.

There are two varieties of positive responsibility. In the top right-hand

cell (impact-based positive responsibility), an organization has a
responsibility to contribute to positive social and environmental impacts,
either directly or through its relationships with other actors. Stated
otherwise, it is responsible to increase or maximize the positive impacts
of its own activities and decisions. A responsibility to contribute to
sustainable development or the fulfilment of human rights is an example
of this variety of responsibility. Finally, under leverage-based positive
responsibility (bottom right-hand cell), an organization has a
responsibility to use its leverage to increase or maximize the positive
social and environmental impacts of the decisions and activities of other
actors with whom it has relationships. A responsibility to encourage the
development of public policies that benefit society at large is an example
of this variety of responsibility.

The distinction between the last two varieties of responsibility is slight

and difficult to discern, since both may require an organization to
promote positive outcomes through its relationships. The difference is
largely one of emphasis: with impact-based positive responsibility the
emphasis is on the organization’s actual contribution to desired
outcomes, while with leverage-based it is on the effort expended to get
others to achieve them.

Impact-based responsibility
ISO 26000 embodies all four varieties of responsibility. Let us first consider
impact-based responsibility. ISO 26000 is full of references to this type of
responsibility. The most important is the definition of social responsibility
itself, which refers to an organization’s responsibility ‘for the impacts of
its decisions and activities on society and the environment’ (2.18).
ISO 26000’s guidance on sphere of influence also emphasizes impacts. It
acknowledges that an organization may have the ability to affect the
behaviour of actors through its relationships and declares: ‘An
organization does not always have a responsibility to exercise influence
purely because it has the ability to do so’ (5.2.3). It goes on to state that
the situations in which an organization will have a responsibility to
exercise its leverage ‘are determined by the extent to which an
organization’s relationship is contributing to negative impacts’ (ibid.).
Outside such situations, an organization may wish, or be asked, to
exercise its leverage, but this is a voluntary choice rather than a
responsibility (ibid.).

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Subclause 7.3.3 gives further guidance on sphere of influence. While it

notes that an organization ‘can exercise its influence with others either
to enhance positive impacts on sustainable development, or to minimize
negative impacts, or both’, its use of the word ‘can’ rather than ‘should’
denotes possibility, not desirability. A note to the definition of sphere of
influence states that the term should always be understood in the
context of the guidance in 5.2.3 and 7.3.3 (2.19). The overall message of
these passages is that social responsibility is based on impact rather than
leverage, and that it is negative, not positive in character (see Box 1 for
examples of impact-based negative responsibility in ISO 26000).

Box 1 – Examples of impact-based negative responsibility in

ISO 26000

An organization should:

• ‘exercise due diligence to identify, prevent and address

actual or potential human rights impacts resulting from
their activities’ (6.3.3.1) and ‘to ensure that it does not
engage in activities that infringe, obstruct or impede the
enjoyment of’ economic, social and cultural rights (6.3.9.2);
• ensure that it does not discriminate against anyone ‘with
whom it has any contact or on whom it can have an
impact’ (6.3.7.2);
• ‘implement programmes … to assess, avoid, reduce and
mitigate environmental risks and impacts from its activities’
(6.5.2.1);
• prevent corruption (6.6.3);
• prohibit the use of undue influence and coercion in
political processes (6.6.4);
• avoid anti-competitive behaviour (6.6.5);
• respect property rights (6.6.7);
• avoid actions that would jeopardize people’s ability to
satisfy their basic needs (6.7.2.2);
• ‘provide products and services that, under normal and
reasonably foreseeable conditions of use, are safe’ (6.7.4.2);
• seek to eliminate the negative health impacts of its
processes and products (6.8.8.2).

The human rights clause of ISO 26000 (6.3) embodies the same
impact-based negative variety of responsibility, which is not surprising
given that this clause deals squarely with the SRSG’s ‘business and human
rights’ mandate.

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The subclause on discrimination is typical:

An organization should take care to ensure that it does not

discriminate against employees, partners, customers, stakeholders,
members and anyone else with whom it has any contact or on whom
it can have an impact. … It should also ensure that it is not
contributing to discriminatory practices through the relationships
connected to its activities. (6.3.7.2)

Going beyond this ‘baseline responsibility’ and contributing to the

fulfilment of human rights is portrayed as a voluntary choice, not a
responsibility (ibid; see also 6.3.9.2). The standard recognizes that the
concept of sphere of influence can help an organization to understand
the extent of the opportunities to support human rights (6.3.2.2), but
also warns against the potential negative or unintended consequences of
exercising leverage (ibid.).

ISO 26000’s guidance on due diligence, both in the context of human

rights (6.3.3) and in general (7.3.1), is also broadly consistent with the
SRSG’s articulation of the concept, with its focus on avoiding contribution
to negative impacts (SRSG, 2008b). The clause on consumer issues shares
this emphasis, but explicitly extends it from impacts of the organization’s
decisions and activities to impacts of its products (ISO 26000, Subclause
6.7).

Impacts also feature prominently in the clause on the environment, which

states that ‘an organization should assume responsibility for the
environmental impacts caused by its activities’ (6.5.2.1). In some places it
describes this responsibility in negative terms – for example, to avoid,
reduce, minimize, eliminate or mitigate negative environmental impacts
(6.5.2.1, 6.5.6.2) – but, unlike the human rights clause, it gives roughly
equal emphasis to positive responsibility. It urges organizations to
improve their own performance as well as that of others within their
sphere of influence (6.5.2.1), commit to continuous improvement of their
environmental performance (6.5.2.2), invest in cleaner production and
eco-efficiency (ibid.), and improve the prevention of pollution from their
activities (6.5.3.2).

These are some of many references to impact-based positive responsibility

in ISO 26000 (see Box 2). The most significant is found in the definition of
social responsibility itself, which states that social responsibility is
manifested in behaviour that ‘contributes to sustainable development,
including health and the welfare of society’ (2.18). The opening language
of Clause 4 ’Principles of social responsibility’ is even stronger: the
‘overarching objective’ of an organization implementing social
responsibility is ‘to maximize its contribution to sustainable development’
(4.1).

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Box 2 – Examples of impact-based positive responsibility in

ISO 26000

An organization should:

• ‘contribute to redressing discrimination or the legacy of

past discrimination’ (6.3.7.2);
• take ‘positive actions to provide for the protection and
advancement of vulnerable groups’ (6.3.10.3);
• ‘act to improve its own [environmental] performance, as
well as the performance of others within its sphere of
influence’ (6.5.2.1);
• ‘integrate ethical, social, environmental and gender
equality criteria’ in purchasing, distribution and contracting
practices (6.6.6);
• ‘make direct investments that alleviate poverty through
employment creation’ (6.8.5.2) ;
• ‘select technologies that maximize employment
opportunities’ (6.8.5.2);
• consider supporting economic diversification initiatives in
the local community (6.8.7.2);
• contribute to the promotion of health, the prevention of
health threats, and the improvement of access to health
services (6.8.8.1).

This enthusiasm for positive responsibility even spills over to the section
on human rights, which otherwise toes the SRSG’s ‘negative
responsibility’ line. Subclause 6.3.4.2 says that while an organization
should base its decisions on the negative responsibility to respect, it
should also contribute to ‘promoting and defending the overall
fulfilment of human rights’. Similarly, the anti-discrimination clause
opines that an organization should contribute to redressing
discrimination by supporting efforts to increase access to education,
infrastructure or social services, promoting gender equality in the
economic, social and political spheres, contributing to disabled people’s
realization of dignity, autonomy and full participation in society, and
contributing to promoting a climate of respect for the rights of migrant
workers (6.3.7.2). The standard also calls on organizations to make efforts
to advance vulnerable groups and eliminate child labour (6.3.10.3).
Finally, the clause on community development and involvement asks
organizations to consider both negative and positive impacts on the local
community (e.g. 6.8.2.2, 6.8.5.2, 6.8.7.2).

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Leverage-based responsibility
All of the preceding responsibilities, whether negative or positive, are
portrayed in terms of contributing to or avoiding impacts, even where
they involve the exercise of leverage. Yet other parts of ISO 26000
suggest that responsibility can arise from leverage alone, even if the
organization is not contributing to impacts. A clear example of
leverage-based negative responsibility in ISO 26000 is the exhortation not
to encourage governments to restrict workers’ free association and
collective bargaining rights (6.4.5.2). Box 3 presents other examples. None
of these state that responsibility arises only where the organization is
contributing to negative impacts.

Box 3 – Examples of leverage-based negative responsibility in

ISO 26000

An organization should:

• ‘refrain from encouraging governments to restrict the

exercise of the internationally recognized rights of freedom
of association and collective bargaining’ (6.4.5.2);
• ‘implement measures to progressively reduce and minimize
direct and indirect pollution within its control or influence’
(6.5.3.2);
• ‘seek to prevent use of [chemicals of concern] by
organizations within its sphere of influence’ (ibid.);
• ‘reduce and minimize the direct and indirect GHG emissions
within its control and encourage similar actions within its
sphere of influence’ (6.5.5.2.1);
• ‘work to oppose corruption by encouraging others with
which the organization has operating relationships to
adopt similar anti-corruption practices’ (6.6.3.2).

Some parts of the clause on fair operating practices emphasize

impact-based negative responsibility, including those on corruption
(6.6.3), anti-competitive behaviour (6.6.5) and respect for property rights
(6.6.7). Others emphasize leverage-based negative responsibility, including
the exhortation to encourage other organizations to adopt
anti-corruption practices (6.6.3.2).

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Part III – Cross-Cutting Issues

The opening language of the clause, however, speaks of positive

responsibility:

fair operating practices concern the way an organization uses its

relationships with other organizations to promote positive outcomes.
Positive outcomes can be achieved by providing leadership and
promoting the adoption of social responsibility more broadly
throughout the organization’s sphere of influence. (6.6.1.2)

The clause on responsible political involvement combines encouragement

of the development of public policies that benefit society at large
(leverage-based positive responsibility) with prohibition of undue
influence and coercion (impact-based negative responsibility) (6.6.4).
Another passage urges organizations to:

• consider the potential impacts of its procurement and purchasing

decisions on other organizations, and take due care to avoid or
minimize any negative impacts (impact-based, negative);
• encourage others to integrate ethical, social, environmental and
gender equality criteria in purchasing, distribution and contracting
policies (leverage-based, positive); and
• participate actively in raising awareness of social responsibility issues
and principles among organizations with which it has relationships
(leverage-based, positive) (6.6.6).

ISO 26000 contains numerous other references to leverage-based positive

responsibility in the clauses on ethical behaviour (4.4), international
norms of behaviour (4.7), labour practices (6.4), the environment (6.5)
and consumers (6.7) (see Box 4). One passage on labour practices even
asserts that ‘a high level of influence is likely to correspond to a high
level of responsibility to exercise that influence’ (6.4.3.2), although other
similar statements were excised from the final version of the standard.

Box 4 – Examples of leverage-based positive responsibility in

ISO 26000

An organization should:

• actively promote observance of its standards of ethical

behaviour not just within the organization but by others
(4.4);
• consider opportunities to seek to influence relevant
organizations and authorities to remedy conflicts between
international norms of behaviour and law (4.7) ;
• consider facilitating human rights education to promote
awareness of human rights among rights holders and those
with the potential to have an impact on them (6.3.2.2);

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 The meaning of ‘sphere of influence’ in ISO 26000

• ‘make reasonable efforts to encourage organizations in its

sphere of influence to follow responsible labour practices’
(6.4.3.2);
• promote fast uptake of green products and services
(6.5.3.2);
• stimulate water conservation within its sphere of influence
(6.5.4.1);
• contribute to building capacity to adapt to climate change
within its sphere of influence (6.5.5.2.2);
• encourage the development of public policies that benefit
society at large (6.6.4);
• participate actively in raising awareness of social
responsibility in organizations with which it has
relationships (6.6.6);
• ‘promote effective education empowering consumers to
understand the impacts of their choices of products and
services on their well being and on the environment’
(6.7.5.2);
• ‘consider partnering with other organizations, including
government, business or NGOs to maximize synergies and
make use of complementary resources, knowledge and
skills’ (6.8.9.2).

In summary, while there may be room to dispute the characterization of

specific passages, ISO 26000 does not restrict itself to impact-based
negative responsibility of the type found in the corporate responsibility
to respect human rights, but contemplates the possibility of
leverage-based as well as positive responsibility.

The SRSG’s final criticism of assigning responsibility on the basis of

leverage was that it encourages strategic gaming. ISO 26000 addresses
this concern in three ways. First, insofar as it endorses an impact-based
theory of social responsibility, it avoids the problem identified by the
SRSG. This is only a partial solution, since some parts of ISO 26000 reflect
a leverage-based theory of responsibility. Secondly, then, the standard
offers a partial defence against strategic manipulation in these situations
by insisting that organizational social responsibility ‘cannot replace, alter
or in any way change’ the state’s duty to protect human rights and to act
in the public interest (Subclause 3.4). Thirdly, ISO 26000 lays down clear
expectations regarding responsible political involvement (6.6.4). If one of
the main dangers of gaming is the risk of saddling non-accountable,
private actors with the responsibilities of government in the absence of
democratic legitimacy, ISO 26000’s guidance on responsible political
involvement provides a defence against this danger at least at the level
of normative principle. Of course, such normative exhortations do not by

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themselves change actors’ material incentives, but they are one source of
pressure on states and organizations when deciding how to act.

Conclusion
Sphere of influence plays a prominent role in ISO 26000 notwithstanding
the objections of critics, including the SRSG. ISO 26000 responds to the
criticism of conceptual ambiguity and imprecision by defining sphere of
influence in terms of ‘influence as leverage’ and by avoiding the
potentially misleading criterion of ‘proximity’. It gives a partial answer to
the problem of strategic gaming. On the thorniest questions, however –
whether social responsibility should be based on impact or leverage and
whether it is negative or positive in character – it gives a mixed and
sometimes inconsistent answer.

This chapter proposed a four-part typology of varieties of influence-based

responsibility to decipher this issue. In its targeted guidance on sphere of
influence and on human rights, ISO 26000 favours a negative
impact-based conception of social responsibility, but there are numerous
passages that appear to advance the view that an organization has a
responsibility to use its leverage to avoid or minimize the negative social
and environmental impacts of other actors with whom it has
relationships regardless of whether it contributes to such impacts. While
it may be argued that ISO 26000 calls for these passages to be read
differently, on their face they stand as a rebuke to the view that social
responsibility can only arise from contribution to negative impacts.
Moreover, the standard puts as much emphasis on positive responsibility
as it does on negative, calling on organizations to contribute to social
and environmental advancement in myriad ways both in their own
decisions and activities, and by exercising leverage over others with
whom they have relationships.

130 Understanding ISO 26000

ISO 26000 and other standards – the relationship
between ISO 26000, the UN Global Compact and
the Global Reporting Initiative
Jonathon Hanks

The past 15 years have seen a proliferation of international codes,

guidelines and standards addressing a full range of social responsibility
issues across all types of sector.82 Amongst this profusion of initiatives
there are arguably two ‘charismatic species’ that have come to enjoy
prominence with most social responsibility and sustainability
practitioners, irrespective of the sector in which they operate: the UN
Global Compact and the Global Reporting Initiative (GRI).

This chapter investigates the relationship between these two leading

initiatives and the recently released international guidance standard on
social responsibility (ISO 26000). After identifying some suggested unique
features of ISO 26000 that are seen to distinguish it from other social
responsibility initiatives, the chapter briefly reviews the UN Global
Compact and the GRI, and assesses their relationship with ISO 26000.
Describing some differences and commonalities between these initiatives,
and outlining the nature of the involvement of the UN Global Compact
and the GRI in the development of ISO 26000, the chapter concludes with
the suggestion that each initiative has a potentially useful role to play in
assisting organizations to address the challenges of sustainable
development, but argues that it is critical to recognize the limitations of
these initiatives.

ISO 26000: a milestone in the history of global

cooperation?
In May 2010, Danish Minister for Economic and Business Affairs Mr
Brian Mikkelsen described ISO 26000 as a ‘milestone in the history of
global cooperation.’ For its enthusiasts, the standard represents a
groundbreaking experiment in multi-stakeholder governance and
norm setting. For critics, ISO 26000 is a watershed in ISO’s trespass
into areas of broad public policy concern.83

82
A comprehensive overview of voluntary initiatives on social responsibility is provided in
Cragg, W (2007) Compendium of Ethics Codes and Instruments of Corporate Responsibility.
See also e.g. http://www.yorku.ca/csr and
http://www.nfrcsr.org/international/csr_instruments/
83
Ward, H (2010).

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Part III – Cross-Cutting Issues

For some observers, ISO 26000 is seen to have particular potential to take
its place ‘at the apex of the burgeoning body of CSR standards … a
potential derived from the body’s brand recognition, the broad
stakeholder and geographic reach of its processes, and a business-led
demand for convergence in the overall body of available guidance on
(corporate) social responsibility’.84

It is suggested that there are three principal features that distinguish

ISO 26000 from other voluntary initiatives on social responsibility:

• the nature and depth of its focus on describing the fundamental

expectations of socially responsible behaviour;
• the breadth of the multi-stakeholder process associated with the
development of the standard; and
• the global reach of the ISO brand.

While these features provide the guidance standard with the potential to
sit at the apex of sustainability-related standards, it remains to be seen,
however, whether this potential will in fact be realized.

The nature of its focus: articulating global norms on social

responsibility
From the outset, the ISO 26000 process had bold ambitions, both in terms
of its subject matter and in the nature of the multi-stakeholder process
used in its development. By venturing into the field of social
responsibility and sustainable development, the ISO was entering into an
area involving subjects and issues of ‘broad public policy concern’ that
are qualitatively different from those it traditionally dealt with.85

Recognizing this concern, the multi-stakeholder Advisory Group on Social

Responsibility – established to advise ISO’s Technical Management Board
on the merits and possible scope of work of a social responsibility
standard – identified seven preconditions that it suggested ISO should
observe if it was to proceed with developing deliverables in the area of
social responsibility.86

84
Ibid.
85
ISO’s work has traditionally been limited to the development of technical standards and
test methods for products.
86
ISO/TMB AG CSR N32 (2004) ‘Recommendations to the ISO Technical Management Board’;
see also ISO Advisory Group on Social Responsibility (April 2004) ‘Working Report on Social
Responsibility’. The terms of reference of the Advisory Group were: ‘To determine whether
ISO should proceed with the development of ISO deliverables in the field of corporate
social responsibility; if so to determine the scope of work and the type of deliverable.’ The
Advisory Group comprised 24 members, plus two representatives of the ISO Secretariat.
Members included representatives from standards bodies, industry, academia,
non-governmental organizations, the international trade union movement, the UN Global
Compact and the GRI.

132 Understanding ISO 26000

 ISO 26000 and other standards

These preconditions, which had a strong influence on the final design

and content of the standard, included the advice that ISO should only
proceed if

ISO recognizes that it does not have the authority or legitimacy to

set social obligations or expectations which are properly defined by
governments and intergovernmental organizations; (and) ISO
recognizes the difference between on the one hand, instruments
adopted by authoritative global inter-governmental organizations
(such as the UN Universal Declaration on Human Rights, international
labour conventions and other instruments adopted by the ILO and
relevant UN Conventions) and on the other hand, private voluntary
initiatives that may or may not reflect the universal principles
contained in the above instruments.87

In addition to suggesting preconditions for working in this area, the

Advisory Group also provided explicit recommendations on the scope of
work and types of possible deliverables. These recommendations, along
with the outcomes of the ISO Conference on Social Responsibility held in
Stockholm in June 2004, informed the New Work Item Proposal (NWIP)
that defined the scope of work for the ISO 26000 process.

In line with the remit provided in the NWIP – and as outlined in more
detail throughout this book – ISO 26000 is an international standard that
provides guidance88 to all types of organization, regardless of their size
or location, on various aspects of social responsibility. The standard seeks
to assist organizations in contributing to sustainable development by
encouraging them to go beyond legal compliance and by promoting
common understanding in the field of social responsibility. In doing so,
the standard explicitly strives to ‘foster greater awareness and wider
observance of an agreed set of universal principles as expressed in United
Nations conventions and declarations’, while ensuring that it is ‘consistent
with and not in conflict with existing documents, international treaties
and conventions and existing ISO standards’.89

While the stated objective of the standard is improved performance, the

standard includes guidance on both process and performance issues;90 in
terms of the ‘process vs performance’ typology of social responsibility
initiatives presented below in Box 5, ISO 26000 would thus be classified
as a ‘hybrid initiative’. Although the standard provides both process and
performance guidance, it is suggested that its core strength and value lies
in its articulation of a set of international norms and expectations as to

87
ISO/TMB AG CSR N32 (2004) ‘Recommendations to the ISO Technical Management Board’.
88
The focus of the standard is explicitly on providing guidance. In contrast to some other
well-known ISO standards such as ISO 9001 and ISO 14001, ISO 26000 is not a management
system standard, and is ‘not intended or appropriate for certification purposes or
regulatory or contractual use’ (ISO 26000, Clause 1: Scope).
89
ISO/TMB ‘New Work Item Proposal N26000’ (2004-10-01); Annex B (f) and Annex A (1).
90
Ibid., Annex B (c).

Understanding ISO 26000 133

Part III – Cross-Cutting Issues

what constitutes socially responsible behaviour, regardless of the size or

type of organization or the location of its operations.

Influenced by the recommendations of the Advisory Group and by the

scope of work defined in the NWIP, the identification of these
performance norms and expectations is based on a considered review by
subject experts of the implications for all organizations of the
requirements contained in authoritative intergovernmental instruments.
This consolidated consensus-based view of the globally applicable norms
of behaviour is outlined primarily in terms of the seven core subjects,91 37
‘issues’ – and the detailed associated ‘actions and expectations’ – that are
presented in Clause 6. This performance-based guidance is supplemented
by the process-related guidance in Clause 7, which outlines how social
responsibility should be integrated throughout an organization and
practised in its relationships.

The focus of ISO 26000 on describing these international norms and

expectations of social responsibility, the basis on which these norms have
been identified, and the level of detail in which they are explained are
important distinguishing features between this standard and other social
responsibility initiatives, including both the UN Global Compact and the
GRI. The nature of this distinction is reviewed in more detail later in this
chapter.

The breadth of the multi-stakeholder process of

development
What makes ISO 26000 exceptional among the many already existing
social responsibility initiatives is that it distils a truly international
consensus on what social responsibility means … based on broad
stakeholder input, including developing countries, business,
government, consumers, labour, nongovernmental organizations and
others. (Rob Steele, ISO Secretary-General)

A second important distinguishing characteristic of the ISO 26000

standard over other voluntary initiatives is the nature of the process of its
development. It was the largest multi-stakeholder negotiation process
undertaken by ISO, involving the participation of more than 450 experts
and 200 observers from 99 countries and 42 ‘liaison organizations’.92 The
participating global subject experts were drawn from six different
stakeholder groups: industry, labour, consumers, NGOs, governments, and
‘Service, Support, Research and Other’ (SSRO).

91
The seven subjects are: organizational governance, human rights, labour practices, the
environment, fair operating practices, consumer issues, community involvement.
92
The liaison organizations included various national and international associations
representing business, consumers, labour, or intergovernmental or non-governmental
organizations.

134 Understanding ISO 26000

 ISO 26000 and other standards

Box 5 – Voluntary initiatives on social responsibility: possible

typologies

In reviewing the relationship between ISO 26000, the UN

Global Compact, the GRI and other voluntary initiatives on
social responsibility, it is useful to consider them in the context
of a possible typology for initiatives. Various approaches for
characterizing such initiatives have been identified. Two broad
approaches are presented below.

Typology 1: Stakeholder and subject

Some suggest that the most appropriate approach is simply to

consider the following questions:

1. Who is the intended user of the initiative?

2. Who developed the initiative?
3. How was the initiative developed?
4. What subject matter does the initiative address?

This is the approach that informed the structure of Annex A of

ISO 26000, which provides a non-exhaustive list of examples of
‘voluntary initiatives and tools for social responsibility’. The
Annex contains two tables that distinguish initiatives in terms
of the intended user of the standard (Q1 above). Table A.1 lists
a series of cross-sectoral initiatives, while Table A.2 provides
examples of sectoral initiatives. Each of these tables is further
subdivided, the first table according to the responsibilities and
process for developing or administering the initiative (Q2 and
Q3), and the second table according to the intended user (Q1):

• Table A.1: Cross-sectoral initiatives

– Section 1: Intergovernmental initiatives (operating
under direct responsibility of intergovernmental
institutions).
– Section 2: Multi-stakeholder initiatives (developed or
administered through multi-stakeholder processes).
– Section 3: Single-stakeholder initiatives (developed or
administered through single-stakeholder processes).
• Table A.2: Sectoral initiatives
– The examples of sectoral initiatives are listed by
intended sector user, namely: agriculture, apparel,
biofuels, construction, chemical, consumer goods,
electronic, energy, extraction, finance, fisheries,
forestry, information technologies, transport, and travel
and tourism.

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Part III – Cross-Cutting Issues

Each initiative is then further characterized in terms of the

subject matter that it addresses (Q4), noting the extent to
which it addresses the ISO 26000 core subjects (Clause 6) and
the practices for integrating social responsibility (Clause 7).
Under this approach, ISO 26000, the GRI and the UN Global
Compact would each be characterized as cross-sectoral
initiatives, the first two of these being ‘multi-stakeholder
initiatives’, and the third being an ‘intergovernmental
initiative’.

Typology 2: Performance vs process

An alternative typology is to distinguish between those

initiatives that focus on providing guidance or specifications
primarily on performance issues from those that seek to
provide guidance or specifications on process issues:

• Performance: Performance-based social responsibility

initiatives seek to provide a normative framework for social
responsibility, outlining a set of fundamental principles
and/or substantive performance expectations against which
to judge an organization’s performance. Such initiatives
focus on defining expectations for particular outcomes,
rather than describing tools to assist organizations to
achieve these outcomes. ISO 26000, the UN Global Compact
and the ICC Business Charter for Sustainable Development
are examples of such initiatives. An important
consideration with such standards is the credibility of the
source that defines the substantive expectation. In
developing ISO 26000, ISO explicitly distinguished between
instruments adopted by authoritative intergovernmental
organizations (such as the Universal Declaration on Human
Rights, the ILO conventions and other relevant UN
Conventions) and private voluntary initiatives that may or
may not reflect the universal principles contained in the
above instruments.
• Process: Process-based initiatives are those that seek to
address a specific issue (such as reporting or stakeholder
engagement), and that focus on providing guidance on
process issues without developing normative expectations
that define whether or not an organization is socially
responsible. These may include, for example:
– Management system standards, such as ISO 14001 and
Social Accountability 8000.
– Reporting guidance, such as the GRI’s Sustainability
Reporting Guidelines.
– Stakeholder engagement guidance, such as
AccountAbility AA1000SES.

136 Understanding ISO 26000

 ISO 26000 and other standards

• Hybrid: Many initiatives – including numerous

sector-specific initiatives – may be seen as hybrid initiatives
that define normative expectations as well as containing
management system and/or process-specific guidance.

While in terms of this typology ISO 26000 may be seen as a

hybrid initiative, its core strength and value is in its articulation
of a set of globally applicable expectations of behaviour (or
performance) derived from authoritative global instruments.
Similarly, while the core principles of the UN Global Compact
(Box 6) are clearly performance based, the UN Global Compact
increasingly offers process-related guidance on implementing
the standards. The focus of the GRI is explicitly on providing
guidance relating to the process of reporting on sustainability
issues. The performance indicators included within the GRI are
performance measures that are recommended for consideration
by organizations to report on, rather than being expectations
as to how social responsibility is implemented. This is an
important distinction, although arguably is a distinction that is
not always fully appreciated by social responsibility
practitioners.

Throughout the ISO 26000 process, steps were taken to promote a

representative geographic and gender-based balance of experts. There
was a particular focus on facilitating the participation of
developing-country experts, and on ensuring their representation in the
various advisory and facilitation bodies. A ‘twinning process’ was
implemented from the start, to ensure that all leadership and secretariat
positions in the Working Group – as well as in any subsidiary Technical
Groups and representative drafting bodies – were based on a partnership
between developed and developing country representatives. In addition,
a Trust Fund was established to provide funding support to assist the
participation of a number of developing-country experts across regions
and stakeholder groups.

A final critical element in these efforts to promote a representative

multi-stakeholder process is the fact that the process provided for double
levels of consensus: first, among the participating experts and, secondly,
among the 163 ISO member countries. In accordance with the ISO
Directives, the negotiation of the standard was based explicitly on
decision making by consensus amongst all the participating experts.

Understanding ISO 26000 137

Part III – Cross-Cutting Issues

For the purposes of the ISO 26000 process, consensus was defined as:

general agreement, characterized by the absence of sustained

opposition to substantial issues by any important part of the
concerns interest, and by a process that involves seeking to take into
account the views of all parties concerned and to reconcile any
conflicting arguments; note: consensus need not imply unanimity.

After passing this stiff test in reaching agreement on the text across all
stakeholder groups, the final step was to ensure sufficient approval
amongst ISO’s member countries.93 The fact that the Final Draft
International Standard (FDIS) passed both hurdles and secured 93 per
cent of the P-member votes in favour of the standard, across all regions,
arguably suggests – as ISO Secretary-General Rob Steele maintains – that
ISO 26000 represents a ‘truly international consensus on what social
responsibility means’.

The global reach of the ISO brand

A third distinguishing feature of ISO 26000 relates to ISO’s broad
international reach and credible brand recognition. As a worldwide
federation of national standards bodies, the Geneva-based International
Organization for Standardization (ISO) has the institutional architecture,
the global brand recognition and the credibility to play an influential
role in promoting the social responsibility agenda and facilitating
convergence in the overall body of guidance on social responsibility
initiatives.

ISO’s significant global reach and brand recognition is reflected in the

fact that there are substantially more companies across all continents that
have ISO 9001 (quality) or ISO 40001 (environmental) certification than
there are companies that produce GRI-based reports or that are
signatories to the UN Global Compact. This global uptake of ISO
standards suggests not only high levels of awareness of ISO standards,
but also implies confidence and credibility in the ISO brand.

ISO standards are often included within supply chain requirements,

referenced in international instruments and incorporated into national
regulatory and governance standards. Internationally, for example, ISO is
explicitly referenced (along with the GRI) in the 2002 Johannesburg Plan
of Implementation, a key outcome of the UN World Summit on

93
ISO/TMB/WG SR N196 ‘Result of Ballot of ISO FDIS 26000’. To be approved, the ISO
standard required at least 66.66% of P-members voting in favour of the standard, and not
more than 25% of total member bodies voting against the standard. The final vote on the
standard was 93% of P-members in favour and 6% of total members bodies voting against.
Only five P-members voted against the standard: Cuba, India, Luxembourg, Turkey and the
United States.

138 Understanding ISO 26000

 ISO 26000 and other standards

Sustainable Development.94 ISO standards have also played an influential

role in informing national and international regulations on the
manufacture, transportation, use and/or disposal of various materials and
products.

At a national level, ISO standards have been used to inform the

development of corporate governance standards. In South Africa, for
example, the King III Code of Practice on Governance – recognized as one
of the most progressive corporate governance standards globally, partly
because of its strong focus on sustainability – specifically references
ISO 26000 and draws on elements of the standard to inform key aspects
of the governance code.95 Similarly, one of the first national guidance
documents to be published as part of the global shift towards integrated
reporting includes specific provision for ISO 26000, citing it as a useful
reference source for assisting organizations in identifying their most
material issues.96

ISO 26000: potentially significant, but will it deliver on this

potential?
An ISO social responsibility standard could potentially matter a great
deal to the uptake of social responsibility. But if organizations
consider it irrelevant, inapplicable or obtuse, it might turn out not to
matter at all.97

For the reasons outlined above, it is evident that ISO 26000 offers
significant potential to increase awareness and understanding of a
credible and comprehensive set of international norms and expectations
as to what constitutes socially responsible behaviour. As a result of ISO’s
wide global reach, the standard has the potential to mainstream social
responsibility principles and practices amongst a broader audience of
organizations than is traditionally reached by voluntary social
responsibility initiatives, including in particular amongst small- and
medium-sized organizations (SMOs).

It is early days since publication of ISO 26000, and the extent to which its
potential will be realized remains to be seen. Considerations that might
impede its more widespread use include the fact that the guidance
document is not a certifiable standard, that it is not available for free,
and that some organizations might find the length of the document a

94
Johannesburg Plan of Implementation (2002). See
http://www.johannesburgsummit.org/html/documents/summit_docs/2309_planfinal.htm
95
For example, the King III definition of corporate social responsibility draws directly from
the ISO 26000 definition of social responsibility (although this is not attributed within King
III).
96
Integrated Reporting Committee of South Africa (2011).
97
Ward (2010), p. 1.

Understanding ISO 26000 139

Part III – Cross-Cutting Issues

possible deterrent. Countering these considerations is the observation

that that there are growing expectations on organizations to adopt social
responsibility practices, and that this document arguably provides the
most comprehensive and credible articulation of such practices.

Ultimately, the extent to which the guidance standard is used will depend
on the value that practitioners find in its guidance. The experience of
many observers, including this author, is that many practitioners and
organizations (including SMOs) that have sought to use this standard
have found it a valuable and accessible source of guidance.98 There is also
a strong likelihood – as noted earlier in the context of existing
governance standards – that significant elements of the document will be
used to inform the development of other codes and standards at a
national level, and that the potentially beneficial impact of the ISO 26000
document will be felt indirectly through such initiatives.

The UN Global Compact

The UN Global Compact describes itself as ‘the largest voluntary
corporate citizenship and responsibility initiative in the world … with
over 8,700 corporate participants and stakeholders from over 130
countries’.99 Launched in July 2000, the UN Global Compact provides a
principle-based framework, supported by a range of management tools,
resources and programmes, with the aim of achieving two key objectives:

1. aligning business strategy and operations with ten universally

accepted principles in the areas of human rights, labour, environment
and anti-corruption (see Box 6); and
2. catalysing actions in support of the broader goals of the United
Nations, including the Millennium Development Goals (MDGs).100

98
See, for example, Hanks (2011).
99
UN Global Compact website at http://www.unglobalcompact.org/AboutTheGC/index.html
(accessed 27 February 2011). The Global Compact Office is supported by six UN agencies:
the United Nations High Commissioner for Human Rights (UNHCR); the United Nations
Environment Programme (UNEP); the International Labour Organization (ILO); the United
Nations Development Programme (UNDP); the United Nations Industrial Development
Organization (UNIDO); and the United Nations Office on Drugs and Crime (UNODC).
100
UN Global Compact tools and resources are available at
http://www.unglobalcompact.org/AboutTheGC/tools_resources/general.html. A
comprehensive self-assessment tool is available at
http://www.globalcompactselfassessment.org/aboutthistool

140 Understanding ISO 26000

 ISO 26000 and other standards

Box 6 – The Ten Principles of the United Nations Global

Compact

The UN Global Compact asks companies to ‘embrace, support

and enact, within their sphere of influence’, the following
principles:

Human rights

Businesses should:

1. support and respect the protection of internationally

proclaimed human rights; and
2. make sure that they are not complicit in human rights
abuses.

Labour

Businesses should uphold:

3. the freedom of association and the effective recognition of

the right to collective bargaining;
4. the elimination of all forms of forced and compulsory
labour;
5. the effective abolition of child labour; and
6. the elimination of discrimination in respect of employment
and occupation.

Environment

Businesses should:

7. support a precautionary approach to environmental

challenges;
8. undertake initiatives to promote greater environmental
responsibility; and
9. encourage the development and diffusion of
environmentally friendly technologies.

Anti-corruption

10. Businesses should work against corruption in all its forms,

including extortion and bribery.

Business participation in the UN Global Compact involves a commitment

by the company’s chief executive officer (CEO), with the support of its
highest-level governance body, to the implementation, disclosure and

Understanding ISO 26000 141

Part III – Cross-Cutting Issues

promotion of the ten UN Global Compact principles. By joining the

initiative, a company is expected to make these principles an integral part
of its business activities, to contribute to the achievement of broad
development objectives (such as the MDGs) through partnerships, and to
advance the case for responsible business practices through advocacy and
active outreach to peers, partners, clients, consumers and the public at
large. Signatory companies are also expected to publish an annual
Communication on Progress describing the ways in which they are
implementing the principles and supporting the broader development
objectives.

The UN Global Compact has come in for criticism from various civil society
organizations for its lack of formal accountability and sanctioning
mechanisms, and for admitting signatories with dubious social
responsibility records. Some have argued, for example, that signatory
companies are using the UN Global Compact for simple public relations
purposes (so-called ‘bluewash’), or as a means for countering more
stringent social responsibility regulation and for increasing business
influence within the United Nations process.101

The relationship between the UN Global Compact and

ISO 26000
The release of ISO 26000 gives a boost to ongoing efforts by the UN
Global Compact to establish widespread common understanding of
corporate responsibility principles. ISO 26000 and the UN Global
Compact are connected by a fundamental belief that organizations
should behave in a socially responsible way. (UN Global Compact
(2010))

The UN Global Compact has produced a useful guidance document in

which it reviews the linkages between the UN Global Compact’s ten
principles and ISO 26000’s seven core subjects.102 While not an exhaustive
review of the various areas of alignment, the publication shows that
there is strong consistency between the two initiatives, and that each of
the UN Global Compact Principles is included in ISO 26000. A higher-level
overview of the areas of linkage between the two initiatives is provided
in Table 3.

This consistency between the two initiatives is not surprising, given that
both initiatives derive their guidance on the shared subjects of human
rights, labour, the environment and corruption from the same
authoritative international instruments. In terms of these shared subject
areas, in essence ISO 26000 simply offers a more detailed articulation and

101
See, for example, the website of Global Compact Critics
(http://www.globalcompactcritics.net/), and Knight and Smith (2008).
102
UN Global Compact (2010).

142 Understanding ISO 26000

 ISO 26000 and other standards

a greater level of guidance regarding the expectations and practical

implications for organizations arising from these instruments. In doing so,
by implication it reaffirms the UN Global Compact’s ten principles.
Recognizing ISO’s operational reach, the UN Global Compact believes that
ISO 26000 can ‘help to build capacity to advance universal principles in
business – particularly in developing countries’.103
Table 3 – Linking ISO 26000 core subjects and UN Global Compact
principles104

ISO 26000 Core Subject/Issue ISO 26000 UNGC

Clause Principle
Human rights 6.3 Principles 1, 2
Due diligence 6.3.3 Principles 1, 2,
5
Human rights risk situations 6.3.4 Principles 1, 2,
4, 5
Avoidance of complicity 6.3.5 Principles 1, 2
Resolving grievances 6.3.6 Principle 1
Discrimination and vulnerable 6.3.7 Principles 1, 5,
groups 6
Civil and political rights 6.3.8 Principles 1, 3
Economic, social and cultural rights 6.3.9 Principle 1
Fundamental principles and rights 6.3.10 Principles 1,
at work 3-6
Labour practices 6.4 Principles 3-6
Employment and employment 6.4.3 Principles 3, 6
relationships
Conditions of work and social 6.4.4 Principles 3, 4,
protection 6
Social dialogue 6.4.5 Principles 3, 6
Health and safety at work 6.4.6 —
Human development and training in 6.4.7 Principle 6
the workplace
The environment 6.5 Principles 7-9
Prevention of pollution 6.5.3 Principle 8
Sustainable resource use 6.5.4 Principles 7-9
Climate change mitigation and 6.5.5 Principles 7-9
adaptation

103
Ibid.
104
Ibid.

Understanding ISO 26000 143

Part III – Cross-Cutting Issues

ISO 26000 Core Subject/Issue ISO 26000 UNGC

Clause Principle
Protection of the environment, 6.5.6 Principle 8
biodiversity and restoration of
natural habitats
Fair operating practices 6.6 Principle 10
Anti-corruption 6.6.3 Principle 10
Responsible political involvement 6.6.4 Principle 10
Promoting social responsibility in 6.6.6 Principle 10
the value chain

While there is evident consistency between the relevant ISO 26000 core
subjects and the UN Global Compact principles – with ISO 26000 offering
a higher level of detail in describing the implications of the instruments
that inform the UN Global Compact principles – there are nevertheless
some important process differences between the two initiatives. A
principal difference is that ISO 26000 is simply a guidance document for
use by organizations and practitioners as they see fit. The UN Global
Compact, by contrast, involves a public commitment by the signatory
CEO, as well as the publication of an annual Communication on Progress
(CoP). To assist signatory organizations to deliver on these commitments,
the UN Global Compact offers participants a set of management tools,
resources and programmes that provide further guidance on
implementation of the principles, and maintain a continuing ‘live’
interest in and focus on the UN Global Compact.

The role of the UN Global Compact in the ISO 26000

negotiation process
The UN Global Compact – and to a lesser extent the GRI – both had
rather unique roles in the development of ISO 26000 when compared
with other voluntary social responsibility organizations. Although each of
them participated throughout as one of the 42 accredited liaison
organizations, they both had the privilege of being afforded a seat on
the Chairs’ Advisory Group (CAG), a stakeholder representative body
tasked (as the name suggests) with providing advice to the Chairs of the
ISO 26000 Working Group. Although this right was also provided to the
ILO and (later in the process) to the OECD, the UN Global Compact and
the GRI remained the only organizations not directly involved in the
administration of authoritative intergovernmental instruments that sat
on the CAG. The UN Global Compact and the GRI were also both
represented on the Advisory Group on Social Responsibility that advised
ISO’s Technical Management Board on the merits and possible scope of
work of a social responsibility standard.

144 Understanding ISO 26000

 ISO 26000 and other standards

At the beginning of the negotiating process, ISO and the UN Global

Compact agreed a Memorandum of Understanding (MOU) aimed at
promoting a collaborative relationship in the development and
subsequent dissemination of the standard. In terms of the MOU, the UN
Global Compact representative secured automatic participation in the
principal subsidiary bodies of the Working Group, including most notably
the CAG, the Integrated Drafting Task Force (and its predecessor, the
Liaison Task Force) and the Editing Committee.

The UN Global Compact representative was a prominent figure

throughout the development of ISO 26000. He played a role in his
personal capacity on ISO’s Consumer Policy Committee (COPOLCO) that
prompted ISO’s consideration of this issue, was a participant of the
ISO/TMB Advisory Group, and participated throughout the negotiations,
attending all of the Working Group meetings and most of the meetings
of the Integrated Drafting Task Force. In doing so, he outlasted the
earlier representatives from UN bodies (such as UNEP and World Health
Organization), as well as the representatives from the GRI who did not
attend the last two Working Group meetings.

The stated objective of the UN Global Compact’s participation in the

process was to ensure that ‘at minimum (the standard) should reflect/be
consistent with/complement the 10 UN Global Compact principles’ with
the aim of assisting the UN Global Compact in advancing these
principles.105 At times, however, it seemed as if the principal objective
was to ensure that the UN Global Compact received privileged attention
in the standard, rather than to promote the underlying UN Global
Compact principles.106 This was evident, for example, in the protracted
negotiations on the precautionary approach (UN Global Compact
Principle 8) on which the UN Global Compact remained noticeably quiet.

Notwithstanding these concerns, the UN Global Compact has publicly

recognized the potentially positive complementary role that ISO 26000
can play in achieving their shared agenda, as reflected, for example, in its
positive statements regarding the supporting role of ISO 26000 in the UN
Global Compact/ISO 26000 bridging document.107

The Global Reporting Initiative (GRI)

The Global Reporting Initiative (GRI) is a network-based
non-governmental organization founded in 1997 by CERES and the
United Nations Environment Programme (UNEP) with the aim of

105
Webb (2007).
106
See also Ward (2010).
107
UN Global Compact (2010).

Understanding ISO 26000 145

Part III – Cross-Cutting Issues

promoting greater uniformity in the reporting of sustainability issues.108

With its Secretariat based in The Netherlands, the GRI produces the
world’s most widely used sustainability reporting framework, developed
through ‘a consensus-seeking, multi-stakeholder process’ involving
participants from global business, civil society, labour, academia and
professional institutions.109

The GRI’s sustainability reporting framework defines the principles and

performance indicators that organizations can use to measure and report
their economic, environmental and social performance. The cornerstone
of the framework is the GRI’s third generation (‘G3’) Sustainability
Reporting Guidelines, published in 2006. In addition to outlining a
detailed set of environmental, social and economic performance
indicators, the guidelines include provision for a CEO statement, a profile
of the reporting entity, a description of the organization’s policies and
management systems on environmental, social and economic issues, and
details of the organization’s approach to stakeholder engagement. These
core guidelines are complemented by various Sector Supplements
(containing unique indicators for different sectors), as well as by National
Annexes (with unique country-level information).110 All of these are
freely available from the GRI website.

The relationship between the GRI and ISO 26000

By using the GRI framework in conjunction with the new ISO
guidance, reporters will have a practical set of tools to measure and
report on their social responsibility policies and practices. (Global
Reporting Initiative (2010))

Although they have different underlying purposes, there is nevertheless

obvious synergy between ISO 26000 and the GRI. ISO 26000’s focus is
clearly broader than that of the GRI. Not only does the ISO guidance
standard seek to describe the globally acceptable norms of socially
responsible performance, but it also provides broad process guidance on
the full spectrum of management activities, including reporting. The GRI,

108
Founded in the United States in 1997 by CERES and the United Nations Environment
Programme (UNEP), the GRI was originally based in Boston, Massachusetts. In 2002, it
moved its central office to Amsterdam, where the Secretariat is currently located; it also
has regional Focal Points in Australia, Brazil, China, India and the United States. Although
the GRI is an independent NGO, it remains a collaborating centre of UNEP and works in
cooperation with the UN Global Compact. See http://www.globalreporting.org/
109
A useful overview of the process involved in establishing the GRI is provided in Brown et
al. (2007).
110
These framework documents are supported by a series of learning publications including a
step by step handbook introducing the process of reporting (The GRI Sustainability
Reporting Cycle: A handbook for small and not-so-small organizations) as well as a guide
on producing a sustainability report (‘Let’s Report! Step-by-step guidance to prepare a
basic GRI sustainability report’). Available at
http://www.globalreporting.org/LearningAndSupport/GRIPublications/LearningPublications/

146 Understanding ISO 26000

 ISO 26000 and other standards

by contrast, limits its focus explicitly to providing process guidance on

sustainability reporting issues, although understandably it does so on this
issue with a greater level of detail than ISO 26000.

Despite these differences in their purpose and scope, there is close

similarity in the guidance provided by both initiatives regarding the
public reporting of sustainability issues, with both standards highlighting
the importance of public reporting on social responsibility performance.
In ISO 26000 the principles of transparency and accountability are
included within the underlying principles of social responsibility (Clause
4), while transparency – and thus by implication reporting – is an integral
element of the ISO 26000 definition of social responsibility.

ISO 26000’s guidance on reporting is addressed in the clause on

‘Communication on social responsibility’ (Subclause 7.5) – which includes
guidance specifically on reporting (Box 15) – as well as in the clause on
‘Enhancing credibility regarding social responsibility’ (Subclause 7.6). In its
guidance, ISO 26000 suggests that an organization ‘should at appropriate
intervals report about its performance on social responsibility to the
stakeholders affected’.111 Recognizing that this can be done ‘in many
different ways, including meetings with stakeholders, letters describing
the organization’s activities, website information and periodic social
responsibility reports’, ISO 26000 suggests that reporting organizations
should

include information about its objectives and performance on the core

subjects and relevant issues of social responsibility … describe how
and when stakeholders have been involved in the organization’s
reporting on social responsibility … (and) provide a fair and complete
picture of its performance on social responsibility, including
achievements and shortfalls and the ways in which the shortfalls will
be addressed.112

These expectations are all fully in line with the recommendations of the
GRI.

Both standards adopt a similar approach in terms of the underlying

principles and processes associated with communication and reporting on
performance. ISO highlights the importance of being responsive to
stakeholder concerns, and of reporting on ‘relevant and significant
issues’, broadly mirroring the GRI’s core principles of ‘stakeholder
inclusiveness’ and ‘materiality’. Similarly, ISO’s suggested characteristics of
information relating to social responsibility (Subclause 7.5.2) – namely
that such information should be complete, understandable, responsive,
accurate, balanced, timely and accessible – largely reflect the GRI’s
reporting principles.

111
ISO 26000 (2010); Guidance on social responsibility (Box 15).
112
Ibid.

Understanding ISO 26000 147

Part III – Cross-Cutting Issues

Although some might suggest (as indeed the GRI has argued) that
ISO 26000 ‘does not provide guidance on specific indicators’,113 it can be
countered that the core subjects, issues and related actions and
expectations outlined in Clause 6 of ISO 26000 provide an obvious and
very comprehensive basis for organizations to develop their own set of
indicators that are of material interest to them and/or their stakeholders.
The checklist format in which indicators are presented in the GRI –
coupled with the GRI’s emphasis on its A,B,C ‘application levels’114 –
opens the GRI to the risk of been seen to promote a tick-box approach to
reporting that undermines its explicit efforts to promote materiality. The
more explicit guidance nature of ISO 26000 does not open the standard
to this concern.

The GRI has produced a useful explanatory document on using the GRI
Guidelines in conjunction with ISO 26000.115 The document includes a
detailed seven-page table that tracks each of the GRI’s disclosure items
against the relevant subjects, issues and clauses in ISO 26000. This table is
intended to assist organizations that are interested in using the
ISO 26000 guidance when producing a sustainability report based on the
GRI Guidelines. A higher-level overview of the relationship between these
two initiatives is provided in Box 7.

Box 7 – The Global Reporting Initiative and ISO 26000

ISO 26000 Social GRI Sustainability Indicator

Responsibility
Core Subjects Categories/Aspects
Subclause 6.2 – Governance
Organizational governance
Subclause 6.3 – Human rights Human rights
Subclause 6.4 – Labour Labour practices and decent
practices work
Subclause 6.5 – The Environment
environment
Subclause 6.6 – Fair operating Society: corruption, public
practices policy, anti-competitive
behaviour, etc.
Subclause 6.7 – Consumer Product responsibility
issues
Subclause 6.8 – Community Society: community

113
GRI (2010).
114
See http://www.globalreporting.org/ReportingFramework/ApplicationLevels/
115
GRI (2010).

148 Understanding ISO 26000

 ISO 26000 and other standards

involvement and
development

As noted earlier, an important distinction between ISO 26000 and the GRI
is that ISO 26000 defines the performance expectations in terms of how
social responsibility is implemented, while the GRI focuses on identifying
performance indicators that should be reported on. This important
distinction – and arguably one that is not always sufficiently appreciated
– is in line with the ‘performance vs process’ typology of social
responsibility initiatives referred to in Box 5, with ISO 26000 being seen
primarily as a performance-based initiative and the GRI as a
process-based initiative.

Promoting sustainability: a distinct (but limited) role for

each initiative?
This chapter has suggested that each of the three initiatives – ISO 26000,
the UN Global Compact and the GRI – have distinct characteristics and
benefits that justify their continuing role. Putting it simply, if rather
crudely: ISO 26000 provides a comprehensive and credible normative
framework of globally applicable social responsibility expectations; the
UN Global Compact, through its focus on CEO commitment, annual
reporting of progress and the provision of management tools and
resources, offers a structured process for engaging organizations on a
critical subset of social responsibility expectations; while the GRI
continues to provide a credible reporting framework that defines the
principles and performance indicators that organizations can use to
measure and report on their economic, environmental and social
performance.

Each of these initiatives has a distinct and potentially important role to

play as part of global efforts to engage organizations in addressing some
of the increasingly pressing challenges of sustainable development.
Separately, and collectively, the three initiatives can assist organizations in
understanding societal expectations, and in identifying policies and
practices for integrating these expectations more effectively throughout
their activities. The potential role of these initiatives is evident, for
example, in terms of their contribution to one of the more exciting
recent developments relating to organizational accountability and
responsibility – namely the global shift towards integrated reporting. This
shift – reflected by the activities of the International Integrated
Reporting Committee – seeks to foster a greater appreciation amongst
organizations of the strategic implications of societal trends, and to

Understanding ISO 26000 149

Part III – Cross-Cutting Issues

prompt their engagement in contributing positively to these trends.116

Each of the three initiatives can contribute to this shift towards
integrated reporting, particularly by assisting organizations in identifying
the material societal issues. Notwithstanding the potential benefits of
these initiatives, it is nevertheless important to recognize their
limitations. In the context of declining resources, growing disparity in
access to resources, and greater demand associated with increasing
population and consumption – coupled with the challenge of global
climate change – it is increasingly evident that ‘business as usual’ will not
deliver on the changes that are needed. Lord Stern, lead author of the
Stern Review Report on the Economics of Climate Change, has recently
argued, for example, that without a ‘revolution’ in business practice, ‘the
risks are potentially existential in terms of humanity’s relationship with
the planet’.117

This presents a challenge for social responsibility initiatives, particularly

those such as ISO 26000 and the UN Global Compact that
(understandably) have sought to identify societal expectations by using
international instruments as their yardstick. There is an evident delay
between the acceptance of generally accepted societal values and their
codification in law, especially at the international level where the
collective efforts of international diplomats to protect national
self-interest, coupled with their tendency to fall back on previously
agreed text, results in a conservatism that is ill-suited to increasingly
complex and rapidly changing societal challenges. Another potential
constraint with voluntary initiatives, especially those that are
certification-based, is their tendency to promote a compliance mindset,
where ticking the box against a checklist of expectations is mistakenly
seen as a substitute for real integration and innovation.

Recognizing the specific role and limitations of these voluntary initiatives

is the responsibility of the organizations and individuals that choose to
use them. While these initiatives certainly have a role to play, without
this recognition they will fail to contribute effectively to the
transformative role that is needed if sustainable development is to be
achieved.

116
The International Integrated Reporting Committee (IIRC) is an initiative that brings
together a cross section of representatives from the corporate, accounting, securities,
regulatory and standard-setting sectors in response to the recognized need for ‘a concise,
clear, comprehensive and comparable integrated reporting framework structured around
the organization’s strategic objectives, its governance and business model, and integrating
both material financial and non-financial information’. Representatives from the both the
GRI and the UN Global Compact serve as members of the IIRC Working Group.
(http://www.integratedreporting.org).
117
Lord Stern, speaking at a high-level dialogue on a transition to a low carbon economy,
hosted by South Africa’s national planning commission, March 2011, Johannesburg, South
Africa.

150 Understanding ISO 26000

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Understanding ISO 26000 153

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