ISO 26000:2010 and Draft Guideline ESR Birendra Raturi CBI Trainer Venue: 8-9 June 2011 FICCI New Delhi India

Contents How does ISO 26000 define “social responsibility”? Back Ground on ISO 26000:2010 What is the purpose and scope of ISO 26000? Outline of ISO26000 Principles of social responsibility ISO 26000 and Draft National Voluntary Core subjects of social responsibility Schematic overview of ISO26000 SR Core Subject and Issues Business Drivers for SR Observations of ISO 26000 by SMEs Observations SMEs Adopting the Guidelines: A Suggested Approach Six Steps for Building A Strategy Indicators Indian MSME Sector at a Glance Business Responsibility Reporting Framework The Business Case Centre for the Promotion of Imports from developing countries | June 2011

How does ISO 26000 define “social responsibility”? 2.16 social responsibility •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 practiced in its relationships. •Note 1 Activities include products, services and processes •Note 2 Relationships refer to an organization’s activities within its sphere of influence Centre for the Promotion of Imports from developing countries | June 2011

Back Ground on ISO 26000:2010 What is ISO? ISO : International Organization for Standardization -Private, not-for-profit organization established in 1947 (Geneva, Switzerland) -Promotes the development of international standards -Voluntary standards: positive contribution to our world; encourage global trade -Worldwide collaboration (WTO, UN, ILO, WHO…) -157 country members, representing 98% of the world economy and 97% of its population. (ISO-Annual Report 2008) Centre for the Promotion of Imports from developing countries | June 2011

What is the purpose and scope of ISO 26000? To assist organizations in addressing their SR; To provide practical guidance related to operationalizing SR, identifying and engaging with stakeholders, and enhancing credibility of reports and claims made about SR; To emphasize performance results and improvement; To increase confidence and satisfaction in organizations among their customers and other stakeholders; To be consistent with and not in conflict with existing documents, international treaties and conventions and existing ISO standards; To promote common terminology in the SR field and broaden awareness of SR. It is not intended to reduce any government's authority to address the SR of organizations; it is not intended to be a “non-tariff barrier to trade”(WTO) It is not intended or appropriate for certification purposes. Any offer to certify, or claims to be certified to ISO 26000 would be a misrepresentation of the intent and purpose of this International Standard. Not a Certifiable standard Centre for the Promotion of Imports from developing countries | June 2011

Outline of ISO26000 Clause Title Clause No Description of Clause Contents Scope Clause-1 Provide Guidance to all type of organizations to go beyond legal and complement other initiatives not replace them Terms and Definitions Clause-2 There are 27 Definitions Understanding Social Responsibility Clause-3 Describes the past and contemporary subjects and trends , expectations of society Principle of Social Responsibility Clause-4 Principles of Social Responsibility Recognizing Social Responsibility and stake holder identification Clause-5 Identification and engagement of Stake holders, organizations spheres of Influence Social responsibility Core Subjects Clause-6 Explain the 7 core subjects and actionable points Integrating SR througout the organization Clause-7 Provide guidance to practice SR integrations throughout the organizations Centre for the Promotion of Imports from developing countries | June 2011

Principles of social responsibility ISO 26000 highlights the 7 principles of SR Accountability Transparency Ethical behaviour Respect for stakeholder interests Respect for the rule of law Respect for international norms of behaviour Respect for human rights Centre for the Promotion of Imports from developing countries | June 2011

Defined within each Principle and vary in with each nos Focus Comparison of ISO 26000 and Draft National Voluntary Guidelines for the Social, Environmental and Economic Responsibilities of Business Parameters ISO 26000 Draft National Voluntary Guidelines for the Social, Environmental and Economic Responsibilities of Business Index 6 Clauses 6 Chapters Principle 7 9 Core Elements Defined within each Principle and vary in with each nos Focus All Kind of organizations Special Chapter on MSME Business Responsibility Reporting Framework Reference Ref to 133 standards No reference as such Integration A very important clause Not detailed as such Centre for the Promotion of Imports from developing countries | June 2011

Core subjects of social responsibility Centre for the Promotion of Imports from developing countries | June 2012

Centre for the Promotion of Imports from developing countries | June 2011

Observations of ISO 26000 by SMEs Observations SMEs Many Small & Medium Sized Enterprises (SMEs) see ISO 26000 as more designed for large multi-national companies (broad-based international standard) Labor practices in less developed countries still a concern SMEs that are linked to international value chains are more interested Many SMEslack expertise/resources to understand the SR agenda, prioritize with business, estimate resources/costs to implement Need to communicate internally how SR activities contribute to business Personal values of owner/Sr. managers are a key driver of SR at SMEs Many SMEsapproach SR issues in a “non-integrated”manner SMEsfinanced by SR investors more likely to address SR programs(2008 IISD Survey) Centre for the Promotion of Imports from developing countries | June 2011

Indian MSME Sector at a Glance Number : 26 Million Employment : 60 Million Account for : 40% to Industrial Production; 45% of Exports; 9 % of GDP Shape : 97% are partnership or proprietorships Formality : 94% are unregistered In Industrial growth consistently outperforms large corporate sector by 2% SMEs account for: 90-95%, or more, of industrial enterprises 70-75% of industrial employment 50-60% of industrial output (Source Unido) Centre for the Promotion of Imports from developing countries | June 2011

What benefits can be achieved by implementing ISO 26000? The perception and reality of an organization’s performance on social responsibility can influence, among other things : • Competitive advantage • Reputation • Ability to attract and retain workers or members, customers, clients or users • Maintenance of employees’ morale, commitment and productivity • View of investors, owners, donors, sponsors and the financial community • Relationship with companies, governments, the media, suppliers, peers, customers and the community in which it operates. Centre for the Promotion of Imports from developing countries | June 2011

Who can benefit from ISO 26000 and how? ISO 26000 provides guidance for all types of organization, regardless of their size or location, on : 1. Concepts, terms and definitions related to social responsibility 2. Background, trends and characteristics of social responsibility 3. Principles and practices relating to social responsibility 4. Core subjects and issues of social responsibility 5. Integrating, implementing and promoting socially responsible behaviour throughout the organization and, through its policies and practices, within its sphere of influence 6. Identifying and engaging with stakeholders 7. Communicating commitments, performance and other information related to social responsibility. Centre for the Promotion of Imports from developing countries | June 2011

Questions?