ISO 26000 after
4 years:
The Business
Case and/or
The Moral Case
Presented byCarolyn Schmidt
NN Net Seminar
Tokyo17 October 2014

Some information about myself
 Program Director, ECOLOGIA (internationallyactive NGO based in Vermont, USA)

"Building Global
Connections to Create Civil Society and Support
Environmental, Social and Economic
Sustainability“ ECOLOGIA’s Mission:

 ISO 26000 Working Group SR Expert

2005-2010 –negotiated the standard up through final stages

 Member of ISO 26000

PPO (Post PublicationOrganization) – promotes and monitors global useof ISO 26000; advises on revisions in future23Organization of presentation
Report from Bali, Indonesia ISO 26000
Forum

The role of NGOs in ISO 26000

The Business Case and/or The MoralCase

4

Report from International
Open Forum andWorkshop on ISO 26000 SRBali, Indonesia
7 – 10 October 2014

5Who organized and sponsored
this conference?
 Noerman Suharman, member of ISO

26000 PPO from Indonesia
 C.F.C.D. (Corporate Forum for CommunityDevelopment) - 300 members, goal is tosupport CSR
 Major sponsors: 3 cement companies,
1 petroleum company, 1 bank, 1 electriccompany, 1 foundation

6Who attended?
67 people from 56 different companies60% from State Owned Enterprises
Large extractive and energy corporations –gold mining, coal mining, electricity,
petroleum, cement, etc.
Some foreign-owned (Korean, Japanese),most Indonesian-owned
Some NGOs – Indonesian Muslim Women’s
Association; Operators of private schools

7

Who were the presenters?

8What were the major topics
discussed by the presenters?
 Specific tools for using ISO 26000 and

integrating it into management decisions
and corporate structure Sustainable procurement – a new ISO
guidance standard on its way
 Stakeholder engagement and 3rd party
independent assessment Attention to sphere of influence Importance of Principles of SR – have tobelieve in them; needs top management

9What were the major topics
discussed by Indonesians?

 Indonesian laws requiring companies toset aside a percentage of their profits forCSR (community development andenvironmental mitigation)
 Community opposition (for example,blockades) to large extractive projects
 Measures taken by companies to developand promote their use of CSR – they view
ISO 26000 as an effective vehicle
 The importance of “good heart” for CSR

10What were the major themesthat emerged?
 Pride in Indonesia and a drive for self-reliance (for example, in energy production)and respect Use of ISO 26000 and CSR as a tool for selfimprovement; Indonesian companies want
recognition from global society
 Promoting the “business case” for CSR - CSR
will strengthen the business and its profits CSR will provide “cover” and protection fromcritics (government, local communities, etc.)

11Role of NGOs in ISO 26000

12Japanese NGOs (Bali) Ibaraki SR Network, Ibaraki NGO Center(2008) – support local agriculture andcreate new jobs; good circulation of local
resources; supports vulnerable groups,including foreign nationals and Fukashima
 CRF Review Forum – provides companies
with independent reviews (NGOs need toknow specific industry) “In Japan, NGO activity is limited; NGOs
are more or less friendly to industry; noadvocacy.”

Example
Sphere ofinfluence

Sectorassociation

Sphere ofinfluence
Example B

Banks /
Insurance

Shareholders

Value chain
Supply chain

Peer org.
Partners
Partners
Workers

SubSuppliers
ASuppliers
ASubSuppliers
BSuppliers
BCustomerX
Industry
Employees Organization

DistributorsCustomerY

Consumers

Waste
services

Raw material
providers

Government

13Citizens

MediaNGO’s13

14Roles for NGOs
 Stakeholders – represent community;communicate between company andcommunity (trusted by both sides)
 Operate services that a company wants
to support (ex. schools, hospitals)
 Provide support (networks) for like-mindedorganizations, independent ofgovernment or business
and above all…..

15

NGOs – most importantly
 ENCOURAGE

MORAL BEHAVIOR:(“PUT PEOPLE AND ENVIRONMENT BEFORE
PROFITS”)
 Reach for the good in people andcompanies; advocate for improvements(The head Chinese delegate to ISO 26000
Working Group evaluated NGOs as themost effective of all the “stakeholdergroups” in the ISO 26000 creation process –NGOs were focused, and stayed united,
because of shared values and principles.)16

ISO 26000 Core Principles
 Accountability
 Transparency
 Ethical behavior
 Respect for stakeholder interests
 Respect for the rule of law
 Respect for international norms ofbehavior
 Respect for human rights

17

The Business Case and/or
The Moral Case forCSR/SR

18“The Business Case” for CSR/SR Reduce costs (ex. eco-efficiency)
 Create value; new opportunites
 Avoid risk
 Build brand image and reputation
 Improve worker morale and retention
 Increase customer loyalty; repeat business Improve community relations, save moneywith fewer strikes, blockades, etc.

19Business caseMore CSR = More profits(at least in the long term)
CSR is a “win-win”

20

BUT
 What happens when “the business case”

for CSR doesn’t apply?

 …when CEOs decide that the economic

costs of implementing a particular CSR
program outweigh the benefits, andcancel it?

21

When there are conflicts…
CSR aspirations(hopes, goals)

Search for profits

22

Who decides what guidelines
to follow?
When it’s a “win-lose”,

who wins?

 Who loses?

23

UN Global Compact-Accenture CEO
Study on Sustainability 2013“…in 2013, our survey of 1,000 global CEOs, from 27
industries across 103 countries, [indicated] thatbusiness efforts on sustainability may have reacheda plateau. It is clear that the corporate sustainability
movement is broadening, with a deeper awarenessand commitment evident in every quarter of theworld. But many business leaders express doubts
about the pace of change and the scale of theirimpact. Far from continuing to a new peak ofachievement, many companies have become stuckon their ascent, unable to scale sustainability at thepace required to address global challenges andachieve business success.”

24

UN Global Compact - Accenture
Report (continued)“CEOs see business caught in a cycle of“pilot paralysis”—individual, small-scale
projects with an incremental impact onsustainability metrics—and while they see arole for business in promoting sustainable
development, their responsibilities to thefundamentals of business success[maximizing profitability - CS] are preventing
greater scale, speed and impact.”

25

UN Global Compact –Accenture Report “While we can celebrate the individual

achievements of sustainability leaderspushing the boundaries of what is possible
within current structures, markets andindustry models, there is a growing
recognition that even the successcurrently achieved by the mostadvanced companies is happening
within an unsustainable system.”

26“Businesses demand CSR
flexibility to stay competitive”
The Jakarta Post, Jakarta February 25 2009:“Businessmen burdened by the compulsory
corporate social responsibility (CSR) law aredemanding more flexibility in its
implementation, fearing it may hinder profitsand slow the country's business sector
overall….”[article features quotations from
CFCD leaders and members against this law]

27

The “Moral Case” for CSR/SR Use principles and core values as guide tobehavior – they must come first “Doing the right thing” may cost more,
but that is no excuse for not doing it Moral decisions frame our lives (Is it rightto sell or buy human beings, just because
there is money to be made?) Developing a CSR/SR culture means reframing more “business” decisions in amoral context - for EVERYONE

28

How can our system change tosupport enough sustainability?
Non-SR activities
putting profits
ahead of othervalues

NGOs + SR =moral voice forjustice andsustainability

29

At the current rate of consumption, weare using up earth’s resources
 1.5 Earths annually(global average)
 4 earths annually(USA)

Source: WWF Living Planet
Report 2014
http://wwf.panda.org/about_our_earth/all_publications/li
ving_planet_report/
Ecological Footprint Index
indicator adopted by UN
Convention on BiologicalDiversity

30

Ultimate goal of CSR/SR Sustainable development
 “Sustainable development is about

integrating the goals of a high quality oflife, health and prosperity with social
justice and maintaining the earth’s
capacity to support life in all its diversity.”(ISO 26000, 2.23)

31

Alternatives exist….
 “Benefit corporations” – social mission is part oftheir legal obligations
 Consumers willing to pay “true costs” tosupport CSR
 Governments willing to support public services(rather than relying on business CSR) throughpolicies that reduce wealth inequality
 “Orthogonal economy” – businesses run atmarginal profit, to contribute to quality of life incommunity (est. 20% - 40% right now, of microenterprises worldwide – ECOLOGIA)

32

The promise of ISO 26000 SR
The path
toward atruly
sustainable
futureSR values
and actions

NGOs, SRbusinesses
andOrganizations

33

Can we change enough, fast enough?
We have the tools; do we have the will?
Will the moral case prevail over the businesscase enough for sustainability, in the coming
decades?
Those are the questions for us all.

Thank you for your attention !

ご清聴ありがとうございました。

34

Contact information
Carolyn Schmidt, Program Director:
cschmidt@ecologia.org
Website: http://www.ecologia.org
Address: PO Box 268 Middlebury Vermont
05753 USA
Telephone: +1-802-623-8075