â€œCSRâ€ has become a huge cottage industry â€” especially in Europe â€” with scores of corporations adopting â€œcorporate codes of conductâ€ and establishing â€œCSR complianceâ€ departments. Other companies outsource â€œsocial auditsâ€ of their own and contractorsâ€™ factories to â€œthird-partyâ€ auditors including giant transnational accounting firms. CSR is the subject of several dozen annual conferences worldwide, and there is a not-so-small library of monthly magazines, annual corporate CSR reports, academic and how-to books, and a score of web sites on the subject.
ISO jumps inIn June 2004, the International Standards Organization (ISO) jumped into the CSR arena, initiating a multi-year process to set consensus guidelines on â€œsocial responsibilityâ€ for corporations and other organizations. In March 2005, work formally began to create ISO 26000, to be published in 2008, under the leadership of a â€œtwinnedâ€ secretariat of Brazilian and Swedish organizations, one each from the developing and developed worlds.
More than 225 â€œCSR expertsâ€ from 43 ISO member countries (including 21 developing countries) and 24 liaison organizations attended the March meeting in Brazil. This send-off virtually guarantees that ISO 26000 will be developed, despite opposition from some ISO members. ISOâ€™s avowed objective: â€œProvide practical guidance related to operationalizing social responsibility, identifying and engaging with stakeholders, and enhancing credibility of reports and claims made about social responsibility.â€
Will it matter?The question is whether ISOâ€™s voluntary guidelines â€” 26000 is explicitly not a certification standard â€” will have any real social impact. The world is already awash in competing codes of conduct, auditing protocols, non-profit and for-profit auditors, and multiple certification schemes. Will 26000 make any difference on the factory floors of the global economy where brutal, sweatshop conditions exist in all countries, including the United States?
Very little tangible progress has been made in the past decade â€œoperationalizingâ€ corporate social responsibility beyond glossy annual reports. This is true even in the sports shoe and garment industries where some companies have been dragged, kicking and screaming all the way, to the forefront of the CSR world by publicity scandals and relentless consumer pressure.
What has been accomplished is a higher level of disclosure. Nike Inc., for instance, has publicly released the names of its 500-plus supplier factories. Now specific plantsâ€™ actual conditions can be evaluated. Gap, Inc. also has released candid reports detailing the continuing violations of workersâ€™ rights and workplace safety in its global supply chain, despite its best efforts to the contrary.
But scores of companies in just the shoe and garment industries â€” let alone in the world economy â€” have made only the most nominal efforts at corporate social responsibility. Wal-Mart, the poster child of global sweatshop production, is emblematic of Fortune 500 companies with secret, in-house auditing of its code of conduct that invariably finds â€œsubstantial compliance,â€ followed by declarations of being socially responsible. The inescapable conclusion is that the dominant variety of CSR is little more than an elaborate public relations exercise.
Barriers to real responsibilityThe obstacle to making any significant, broad-based progress in improving factory health and safety conditions, not to mention wages, hours, harassment and discrimination in the global economy, is not a lack of guidelines, or management CSR command-and-control systems, or certification schemes. The real obstacles are:
Lack of political will by corporations to refrain from taking advantage of vulnerable countries and desperate workers whose super-exploitation fattens the bottom line and meets financial analystsâ€™ â€œquarterly expectations.â€
Lack of political will, and perhaps lack of genuine options, on the part of governments in the developing world (heavily in debt, totally dependent on foreign investment, and straight-jacketed by international financial institutions) to enforce existing regulations and establish new ones.
Lack of resources (financial, informational and political) of sweatshop workers â€” the only ones with a permanent, unalterable commitment to corporate social responsibility â€” to know what their rights are, to know how to protect themselves on the job, and to be able to â€œoperationalizeâ€ such knowledge.
Proposed ISO guidelines will not overcome matters of will and resources. To the extent that the ISO guidelines can standardize an â€œupward harmonizationâ€ of competing guidelines, codes of conduct, auditing and reporting protocols already in existence, that would be a welcome development. It is encouraging that ISO has signed a Memorandum of Understanding with the International Labor Organization (ILO) to incorporate the ILOâ€™s conventions and declarations into the ISO 26000 Social Responsibility Guidelines.
But even if the ISO guidelines resist the temptation (and substantial corporate pressure) to establish only the â€œlowest common denominatorâ€ of standards, the question of actual implementation on the factory floor remains. No corporation, of course, will be required to adopt or implement the guidelines.
Essential guideline componentsIf the ISO guidelines are to have any relevancy at all, two elements are essential: transparency and worker participation. The guidelines must require public reporting of any CSR systemâ€™s auditing procedures, results and corrective actions, and they must identify the specific enterprises and activities evaluated by the guidelines.
Second, there must be a feasible, effective means for workers in the audited enterprises, or their representatives in non-governmental organizations, to contest errors or misrepresentations in CSR audits and reports.
Without these minimum components, the ISO 26000 Guidelines will not address, let alone remedy, the real obstacles to implementing meaningful CSR regimes on the factory floor. Much larger efforts are needed to generate and sustain the political will and material resources that governments, employers and workers need to actually protect workplace health and safety in a global economy where there is a mad â€œrace to the bottomâ€ in all areas but short-term financial results.
An ISO SR Guideline that combines setting a high bar of standards with â€œsunshineâ€ provisions for transparency, and feasible mechanisms for worker participation and verification could make a useful contribution.
Otherwise, the ISO SR Guidelines will become just another small hut in the global cottage industry known as corporate social responsibility.