CSR - A platform for societal development

By Dr Lalith Senaweera

With development of world trade, organisations make huge profits by selling its products and services. However, at the same time the world population is also facing many issues such as environmental degradation, global warming, water issues, food security issues and malnutrition and, therefore, many organisations in the world have given more attention to these issues which are becoming basic needs of the society.

It is proved fact that if society is not in order then a country or the world will face enough problems which may lead to a situation where the planet or the earth may not be suitable to live for future generations.

Moreover, according to statistics, today nearly a third of all children in developing countries are underweight and that 80 percent of the world's population live in countries where income differentials are widening.

Profit

Therefore, it is our responsibility to look after our society which in turn provides immense benefits to our society and the public at large. When an organisation makes reasonable profit it can contribute a certain portion of such profits for the benefits of society. It helps to put society in order which ensures the continuity of the business while paving the way to address the wants and needs of society.

This is a vital matter and today, the three Ps concepts of People, Planet and Profits is given more attention by many organisations the world over. However, ISO 26000 is a guidance document and not a management system standard and, therefore, it does not specifically contain needs against which an organisation or its management system could be audited and certified.

ISO 26000 provides guidance on what social responsibility is and how organisations can operate in a socially responsible manner. When using ISO 26000, the more appropriate way is to consider societal, environmental, legal, cultural, political and organisational diversity and differences in economic conditions, while being consistent with international norms of behaviour.

ISO 26000 provides guidance for all types of organisations

Benefits

1. Concepts and definitions of social responsibility. 2. Background and characteristics of social responsibility. 3. Principles and practices relating to social responsibility. 4. Main subjects and issues of social responsibility. 5. Integrating, implementing and promoting socially responsible behaviour throughout the organisation 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.

However, managers' respond to corporate social responsibility in different ways and most of them consider what actions most benefit society, as societal issues are constantly changing based on events, public opinion and media campaigns taking place in society.

The Sri Lanka Standards Institution (SLSI) has adopted ISO 26000 standard as the national standard - SLS ISO 26000 to pass on the benefits to the nation. SLSI has conducted a number of awareness programs on this international standard to educate the business community. Today, SLSI is developing a Web page to promote Social Responsibility and ISO 26000 including different case studies.

Tool

It is the belief of SLSI, that ISO 26000 will become a powerful tool and help organisations, governments, associations, and non-governmental organisations to implement the three Ps concept through the implementation of different programs throughout the world.

At the World Economic Forum in Davos, Switzerland, in January 1999, then UN Secretary General Kofi Annan submitted the 'Global Agreement' which was officially put into effect at the UN headquarter in July 2000.

This agreement was for organisations to observe the nine basic principles regarding human rights, labour standards and environment, which includes the following nine principles -

1. Organisations should support and respect the different internationally recognised human rights.

2. Organisations should never participate in any activity that disregard or override human rights.

3. Organisations should support freedom of association and acknowledge the right of collective bargaining.

4. Organisations should not enforce compulsory labour in various forms.

5. Organisations should effectively prohibit child labour.

6. Organisations should put an end to any discriminatory act in recruiting and using the workforce and in respect of industries.

7. Organisations should take precautions against environmental challenges.

8. Organisations should take the initiative to undertake more responsibilities on environmental protection.

9. Organisations should encourage the development and promotion of science and technology that are harmless to the environment.

These principles originated from the Universal Declaration of Human Rights, International Labour Organisation Declaration on the Basic Principles and Rights of Working and the Rio de Janeiro Declaration on Environment and Development.

The nine principles are related to human rights, labour standards and environment. The observation of the nine principles means that, internally, an organisation should guarantee the dignity and welfare treatment of its corporate social responsibility as a principle of management, thus contributing to a more conscious and sustainable use of natural and human resources.

Criteria

However, Carroll (1999) has indicated four perspectives as a criterion of corporate social performance.

The four facets can be explained in a critical manner -

Economic responsibility

This is the most important facet as it is where the organisations make profits using ethical practices and, therefore, the managers can consider focusing on any burning issue or issues of society by contributing to improve or to upgrade that area without any hesitation.

In other words without making profits or driving the organisation in the right direction it is impossible for managers to make any decision to consider the societal issue.

However, the most important factor to be considered under this perspective is to work organisations in an ethical manner and then based on those practices only to make the organisations profit oriented.

Legal responsibility

This is a vital criterion for the organisations as this demonstrates the responsible behaviour of the organisation. This has a broad meaning.

International Standard on Social Responsibility

The International Organisation for Standardisation (ISO) has published ISO 26000 standards to assist organisations to contribute to social development while paving the way for sustainable development.

It encourages them to go beyond legal compliance, recognising that compliance with the law is a fundamental duty of any organisation and an essential part of social responsibility. The standard aims at promoting common understanding in the field of social responsibility and to complement other instruments and initiatives for social responsibility, not replace them.

Legal needs have to be first identified by the organisation and then it should be interpreted taking into consideration its relevancy. Once it is done those interpretations should be considered as binding and accordingly all employees of the organisation should be educated on those by having internal awareness programs to ensure that legal needs are always adhered to by the employees of the organisation.

Ethical responsibilities

This is an important perspective which may not be covered by law, but includes the employees actions which should always be right so that those actions benefit society in a wider manner such as discouraging tobacco consumption or supporting socially disadvantage groups.

This will encourage good qualities among the managers and employees which would enhance the organisation's corporate image and help to develop society.

This covers the improvement of the level of socially responsible behaviour within the organisation using a code of ethics and ethical structures.

Discretionary responsibilities This facet and perspective does not cover the details given under other three perspectives which include anonymous donations with no expectations or sponsorship of local events and contribution to charities.

The above criterion can be used to evaluate corporate performance in the social responsibility arena.

The writer is the Director General and CEO Sri Lanka Standards Institution and ISO DEVCO Chair - Committee for developing country policy matters.