CSR and SMEs: implications and potential benefits Bart Slob Chisinau, October 30, 2009

Legislation Consumer / user Health and Safety Environment E.g. packaging, WEEE, RoHS, cadmium CE Marking Social / fair trade labels SA 8000 / OHSAS certificate Codes of conduct ISO 9000 series certificate EN / IS0 standards ECO Labels IS Certificate Quality Social accountability Environment Market-driven requirements CSR-related market access requirements: combination of legislation and market demands ISO 26000, GRI, UNGC

CSR for SMEs How to manage risks and create opportunities? Step 1: Identify relevant buyers’ requirements Database search by product group –Legislative and non-legislative requirements Internet search on relevant codes of conduct –Potential buyers –Sector codes

CSR for SMEs Step 2: assess your position and ambition Baseline analysis Compliance to legislation Extent to which buyers’ requirements are met Risk management versus market opportunities Stakeholder expectations CSR ambition  responsibility / market strategy Build support within your company and among your stakeholders

CSR for SMEs Step 3: develop a code of conduct Company code Sector code Region code Code for suppliers Code developed by a multi-stakeholder initiative  CBI’s code of conduct builder Tip: use examples in CBI database

CSR for SMEs Step 4: identify areas of improvement Priorities, objectives, procedures Checklists Step 5: show performance and compliance Reporting Certification of management systems Labels

Legislation Consumer / user Health and Safety Environment E.g. packaging, WEEE, RoHS, cadmium CE Marking Social / fair trade labels SA 8000 / OHSAS certificate Codes of conduct ISO 9000 series certificate EN / IS0 standards ECO Labels IS Certificate Quality Social accountability Environment Market-driven requirements Requirements regarding social issues in the supply chain are often non-legislative! ISO 26000, GRI, UNGC

Social issues Social issues become increasingly important in international trade Negative publicity on labor conditions may have an impact on your clients’ sales → your sales EU companies use the improvement of labor conditions as a criterion for trade with companies in developing countries Improved labor conditions will positively impact productivity and quality of final products

Buyers’ requirements related to social aspects The Basis: The International Labor Organization (ILO) the UN organization dealing with aspects of work International labor standards Governments are obliged to implement ratified Conventions in their own national policies Many social requirements on labor conditions by the private sector are based on the ILO Conventions –they have proven to be internationally acceptable

ILO ILO Conventions are translated into: –social codes of conducts –suppliers declarations –social management systems –labeling initiatives To upgrade the labor conditions in supply chains, mainly in developing countries supplying to the EU markets.

ILO Which of the nearly 200 ILO Conventions are being used by the private sector as market access requirements?

ILO 1.Right to union membership and to negotiate 2.Non-discrimination 3.Forced labor 4.Minimum age 5.Working hours 6.Equal remuneration 7.Minimum wages 8.Occupational Health and Safety

ILO Exports to the EU: Take notice of these Conventions Make a plan on how to implement them at your company & how to show you comply (audits, certification, labelling) Many EU companies will see these issues as minimum social requirements and will expect their suppliers to be at least aware of the issues and working on improvement to the minimum level.

8 core ILO Conventions Freedom of association & collective bargaining –ILO Convention nr. 87 (freedom union membership) –ILO Convention nr. 98 (organise & collective bargaining) Abolition of forced labour –ILO Convention nr. 29 (no forced labour) –ILO Convention nr. 105 (no forced labour) Equality –ILO Convention nr. 111 (non discrimination) –ILO Convention nr. 100 (equal remuneration) Elimination of child labour –ILO Convention nr. 138 (minimum age) –ILO Convention nr. 182 (worst forms of child labour)

Additional issues often mentioned Maximum work hours per week & overtime (48 hrs/week + 12 hrs/week) Minimum / Living wage Good and healthy working conditions

Meeting buyers’ requirements related to CSR Guidelines ISO Auditing and management systems BSCI SA 8000 OHSAS GRI Codes and labeling GLOBALGAP Ethical Trading Initiative Labels

In short: what to do? 1. Select initiatives relevant to your product or sector 2. Use self assessments & audits to benchmark your performance 3. Position and ambition 4. Use the tools to improve, comply and market

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