Standards and Assurance in Corporate Social Responsibility: An emerging landscape

Mark Barthel
Head of Environment, Sustainability and CSR
British Standards Institution

Corporate Social Responsibility - it's the latest trend from the fashion houses of management consulting and a business trend that's here to stay following the well-publicised failures of corporate governance, ethics and transparency at Enron, WorldCom and others.

At its simplest, Corporate Social Responsibility (CSR) is a simple notion that sets a framework for business managers to protect their company's long-term profitability, but it's more about how profits are made than how much profit there is, or how much is given away. Addressing the notion of CSR means understanding how companies have to relate to the wider world; and the impact that their activities have on society and the environment. However, behind this apparently simple construct lies a mass of confusion about what CSR really is and how to go about it.

One thing is certain - CSR is evolving both as a concept and as a professional discipline. Philanthropy and community investment are being replaced by a more hard-nosed business case approach to the subject - where the aim of CSR is to protect and enhance shareholder value through a combination of innovative partnerships and initiatives and good communication leading to increased sales. CSR has also become a powerful weapon in the so-called "war for talent" (staff recruitment and retention). Practitioners hope that once the business case for CSR is proven, it (and they!) won't fall foul of an economic recession.

A bewildering array of codes of conduct, international treaties, conventions and declarations, business principles and processes have emerged to populate the CSR landscape. The landscape is often confusing, particularly to those new to the subject; and whilst there are some in the profession that believe in the maxim "let a thousand flowers bloom", others are looking for initiatives that make the abstract more tangible, allowing them to integrate and embed CSR at a practical level in their organisations. The really smart organisations are looking for initiatives and approaches that seek to integrate a wide range of tools and techniques under one business management umbrella.

One such initiative, the SIGMA Project, is aiming to do just this through the provision of the SIGMA Guidelines^[1]. SIGMA aims to pull together and build upon much of the good work on CSR and sustainability done elsewhere under a unifying management framework, which, in turn, is supported by a set of operating principles and an implementation toolkit. The SIGMA Project is a partnership between AccountAbility, BSI and Forum for the Future - three organisations with a powerful track record and all committed to the CSR and sustainability cause. The SIGMA Guidelines are currently being road tested by a wide range of organisations from The Boots Company and Marks and Spencer, to Vauxhall Motors, PowerGen, BAA, TNT, DEFRA and the Cooperative Bank.

For those that break out in a cold sweat at the mention of CSR help is at hand from a range of other sources. A new guide by Business for Social Responsibility (BSR), "Designing a CSR Structure"^[2], seeks to help those developing a CSR management system. Whilst AccountAbility has recently launched their much anticipated AA 1000 Assurance Standard^[3], with assurance already recognised as a critical piece of the CSR jigsaw, as stakeholders call for increased transparency and accountability. Furthermore, for those seeking to report their social and environmental performance there are the Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines^[4].

The International Organisation for Standardisation (ISO) also hopes to play a leading role and has recently undertaken a feasibility study on the potential of an International Standard for CSR^[5]. ISO, perhaps best known for its ISO 9000 quality management and ISO 14000 environmental management standards, is wisely treading carefully in entering the politically sensitive CSR arena. It is in the process of forming an international, multi-stakeholder Strategic Advisory Group on CSR to evaluate the role and potential contribution of ISO Standards in this area and to define the standards development process required to get there.

And what of regulation or mandatory approaches to CSR? The European Community has so far shied away from regulation but that has not stopped some of its Member States from passing laws on the subject. From 2003, French companies will have to demonstrate their commitment to CSR by giving detailed accounts of their social and environmental reporting^[6]. And the UK Companies Bill requires company directors to publish details of their social and environmental performance if they believe it is material to their shareholders and investors.

This leads us to one final conclusion: even without legislation there is increasing pressure on companies to disclose their social and environmental performance. Self-regulation and access to socially responsible investment (SRI) funds, along with new stock exchange indexes, such as the Dow Jones Sustainability Group Index and FTSE4GOOD are evidence that the financial community is taking CSR very seriously. The message is out there: "Hard data is what we want if we're going to invest in your company." CSR can no longer afford to be viewed as spin and PR. It has to deliver proven performance improvement, partnerships that benefit all of its stakeholders (not just its shareholders) and business benefits that generate bottom line improvement.

And there's plenty of help available in the form of standards, codes of practice and initiatives. Just punch CSR into a web search engine and you'll find out!

mark.barthel@bsi-global.com

Office Tel: +44 (0)20 8996 7335

Web: www.bsi-global.com

^[1] For more information on the SIGMA Project and to download the SIGMA Guidelines visit the project web-site at: www.projectsigma.com

^[2] Available from www.bsr.org/store

^[3] See: www.accountability.org.uk

^[4] See: www.globalreporting.org

^[5] See the International Institute for Sustainable Development (IISD) website at: www.iisd.org or www.iso.ch for the latest news on this new ISO initiative.

^[6] The Guardian, 26 September 2002, City Pages p.24 - "Good-causes burden irks executives".