There’s Nothing ‘Standard’ About Standardization

Experts and observers from six groups -government, industry, labour, consumer organizations, NGOs, as well as a group of academic, consultant, standards and other bodies -have been working intensively on reaching consensus on what “social responsibility” means, and what should go in the world’s first standard on the subject.

Perhaps the very first step to bring ISO 26000 Social Responsibility to life is to acknowledge that the sustainable development debate tends to protect itself from the economic realities and linkages in the global economy.

In particular:

• At the global level, growth in emerging countries is not substituting for outputs in industrialized countries, but is adding to it–driving down production costs and increasing productivity. This is why multinational companies (except in the banking sector) are still reporting gains, for they are achieving greater economies of scale and maintaining per-unit-cost margins.

• The global economy is focused on supplying to the middle classes in emerging and industrializing countries, and to a great extent their demands have yet to account for environmental and social attributes. The biggest loser in the globalizing world is likely to be the worker, who lies at the very heart of the social responsibility debate. Social responsibility is, after all, about making living conditions more equitable and sustainable for all. And, in economically advanced countries, workers are losing their bargaining power to those entering the workforce from poorer countries. This is manifested, not only in the loss of jobs in the first world, but in a real decline in wages -for both lower-skilled workers and professionals.

In a similar vein, workers in developing countries have even less bargaining power, as the labour they bring to the global economy is rarely combined with capital. And, with capital being increasingly free to move now, the loss of jobs in these countries is even more of a threat than the lowering of wages, as high inflation rates have already ensured that wages remain low. As a direct consequence of these trends, income inequalities are likely to increase even further.

Standards, especially ISO 26000, also need to be flexible in their application to the social and environmental realities of industrializing countries. While we are all aware that there is no one-size-fits-all model, we also need to acknowledge that social responsibility issues cannot be universally interpreted. Indeed, one of the most controversial parts of ISO 26000 is a proposal for text outlining a globally applicable set of minimum norms for organizational behavior and setting a principle on how these should be applied.

From my experience, SMEs do not identify with the terms social responsibility or corporate social responsibility, and did not use them internally. Instead, they referred to their social responsibility activities under a variety of other terms, including compliance, client relationships, client audits, client monitoring and external audits. They regard ISO 26000 as too broad-spectrum and implicit to serve as a resource in operational challenges. In general, managers working at SMEs agree that ISO 26000 will be picked up only by a selected profile of SMEs, namely:

• Those that are looking to export to Europe and North America,

• Those that feed into international value chains,

• Those whose products/services are inherently linked to environmental and social integrity,

• Those that are financed by socially responsible and ethical investors; and,

• Those led by individuals who more deeply appreciate environmental and social opportunities and risks.

Indeed, a friend of mine told me some days ago: “ISO 26000 and all standards on these issues are not for everybody.”

Done well, ISO 26000 could drive competition among enterprises for better social responsibility performance. Done badly, it could inadvertently further the global squeeze on small producers unable to meet the aspirations of its guidance.

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Best known for its widely used technical and management standards, the International Organization for Standardization (ISO) embarked in 2005 on its first “soft” standard on social responsibility.