International Standards & Codes

7/29/2019 International Standards & Codes

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By Manisha Saxena

International Codes and Standards

12/9/2013


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The WBCSD's definition of CSR

"Corporate social responsibility is the continuingcommitment by business to contribute to economic

development while improving the quality of life of the

workforce and their families as well as of the communityand society at large"

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What are Codes and

Standards? The European Commission's Green Paper promoting a

European framework for CSR, published in 2001, defines

Code of Conduct as "a formal statement of the values and

business practices of a company and sometimes its

suppliers. A code is a statement of minimum standards

together with a pledge by the company to observe them and

to require its contractors, subcontractors, suppliers andlicensees to observe them. It may be a sophisticated

document, which requires compliance with articulated

standards and have a complicated enforcement mechanism.

Business has economic, legal and social responsibility. The

Triple Bottom Line, 3 Ps-Profit, People and Planet. The codesand standards arise because of economic, punitive and

ethical considerations.

They can be mandatory or advisory.

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Why Codes?

Codes as a tool for the activist-Sullivan Principles

Codes can help to generate consensus - UN GlobalCompact (2000)

Codes can embed incremental improvement - EMAS(1993), ISO 14001 (1996) and OHSAS 18001 (1999) have

shown is that process-standards are extremely effective in

bringing about continuous improvement in organisations.

Codes can change industry /sectors - Kimberly Process(2003) and the Equator Principles (2003).

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Historical evolution of codes

General Motors was the largest employer of blacks in South Africaand Leon Sullivan who became a Board member at General

Motors, in 1971 decided to use his position on the Board of

Directors to apply economic pressure to end apartheid, the

government policy of segregation in South Africa. The result was

the Sullivan Principles, which became operational in 1985 for

companies doing business in South Africa to achieve greater

tolerance and better understanding among peoples, and advance

the culture of peace.

New Global Sullivan Principles in 1999 : human rights, employees,

the communities, parties with whom business is done, equal

opportunity for employees w.r.t. color, race, gender, age, ethnicity

or religious beliefs, and no exploitation of children, physical

punishment, female abuse etc.

Source: http://www.goodmoney.com/directry_codes.htm#SULL

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Codes can be

Principle-based codes- UN Global Compact andthe Global Reporting Initiative.

Process-based codes- ISO 14001

Performance-based codes - SA 8000 and

emerging standards around carbon emissions Sector-, product-, issue- and geography-based

codes-for a specific sector (e.g. pharmaceuticals),product (e.g. palm oil), issue (e.g. water) or

geography (e.g. China). They will be an elaboration

of the generic codes, applied to a specific,

actionable context. Equator principles, Kimberley

Process Certification Scheme(KPCS), is a process

designed to certify the origin of rough diamonds

from sources which are free of conflict fuelled by6


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International Labor Organization, ILO,

1919

It is a specialized agency of the UN that deals withlabor issues. Its headquarters are in Geneva,

Switzerland.

One of the principal functions of the ILO is setting

international labor standards through the adoption ofconventions and recommendations covering a broad

spectrum of labor-related subjects and which,

together, are sometimes referred to as the

International Labor Code. The topics covered includea wide range of issues, from freedom of association

to health and safety at work, working conditions in

the maritime sector, night work, discrimination, child

labor and forced labor.

http://en.wikipedia.org/wiki/International_Labour_Org7
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Organizations for Economic Cooperation

and Development (OECD ), 1961

Initially Organization for European Economy Co-operation (OEEC), 1948

There are currently 33 members. Headquarter at

Paris

Governments adhering to the guideline encouragepositive contributions to economic, environment

and social issues through peer pressure.

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The Caux Round Table, 1986

CRT is an international network ofexperienced business leaders, who

work with business and political

leaders to design the intellectualstrategies, management tools and

practices to strengthen private

enterprise and public governance toimprove our global community.

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Kyoto protocol, 1997

The Kyoto Protocol is a protocol to the United Nations Framework

Convention on Climate Change (UNFCCC or FCCC), aimed at

fighting global warming. The UNFCCC is an international

environmental treaty with the goal of achieving "stabilization of

greenhouse gas concentrations in the atmosphere at a level that

would prevent dangerous anthropogenic interference with the

climate system.

The Protocol was initially adopted on 11 December 1997 in Kyoto,Japan, entered into force on 16 February 2005. As of November

2009, 187 states have signed and ratified the protocol.

Reduction of four greenhouse gases (GHG) (carbon dioxide,

methane, nitrous oxide, sulphur hexafluoride) and two groups of

gases (hydrofluorocarbons and perfluorocarbons) produced by

them, and all member countries give general commitments. Thebenchmark is 1990 emission levels.

The five principal concepts of the Kyoto Protocol are: Commitments.

Implementation. Minimizing Impacts on Developing Countries by

establishing an adaptation fund for climate change. Accounting,

Reporting and Review in order to ensure the integrity of the Protocol.Compliance. 10


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United Nations Global Compact,

2000 In an address to the World Economic Forum on January 31, 1999, the former Secretary-General of the

United Nations, Kofi Annan, challenged business leaders to join an international initiative --- the Global

Compact --- that would bring companies together with UN agencies, labour and civil society to

embrace, support and enact universal environmental and social principles. The Compact's operationalphase was launched at UN Headquarters in New York on July 26, 2000. The Ten Principles of the

United Nations Global Compact :

Human rights

Principle 1:Businesses should support and respect the protection of internationally proclaimed humanrights; and

Principle 2: make sure that they are not complicit in human rights abuses.

Labour Principle 3: Businesses should uphold the freedom of association and the effective recognition of the

right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour

Principle 5:the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7: Businesses are asked to support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-corrupt ion

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Source: http://unglobalcompact.org/docs/news_events/8.1/GC_brochure_FINAL.pdf

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International Organization for Standardization, ISO,

1947

A network of the national standards institutes of 157countries, on the basis of one member per country, with a

Central Secretariat in Geneva, Switzerland, that coordinates

the system.

ISO has developed over 18 000 International Standards on a

variety of subjects and some 1100 new ISO standards arepublished every year.

ISO 14001:2004 Environmental management systems

ISO 26000: provides guidelines for social responsibility to be

released and published in 2010.

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Montreal Protocol, 1989: For substances that deplete the ozone layer.

CERES, 1989: Coalition for Environmentally Responsible Economies is a national network of investors,environmental organizations and other public interest groups working with companies and investors to

address sustainability challenges such as global climate change.In 1993, Sunoco became the first Fortune500 company to endorse the Ceres Principles. Today, over 50 companies have endorsed the Ceres

Principles including 13 Fortune 500 firms that have adopted their own equivalent environmental principles.

The Ceres Principles are: Protection of the Biosphere, Sustainable Use of Natural Resources, Reduction

and Disposal of Wastes, Energy Conservation, Risk Reduction, Safe Products and Services,Environmental Restoration, Informing the Public, Management Commitment, Audits and Reports

EMAS, 1995: The EU Eco-Management and Audit Schemeis a management tool for companies and otherorganizations to evaluate, report and improve their environmental performance. The scheme was originally

restricted to companies in industrial sectors., since 2001 it has been open to all economic sectors including

public and private services and in 2009 it was revised and modified for the second time.

Global Reporting Initiative, GRI G3,1997: Technical partnerships to establish international reporting

guidelines for corporate sustainability reporting./ ecological footprint reporting/ Triple Bottom Line reporting. Dow Jones Sustainability World Index (DJSI World), 1999: Are the first global indexes tracking the

financial performance of the leading sustainability-driven companies worldwide. Based on the cooperation

of Dow Jones Indexes and SAM they provide asset managers with reliable and objective benchmarks to

manage sustainability portfolios.

OHSAS 18001, 1999: International Occupational Health and Safety management systemspecification.

AccountAbility, AA 1000, 2003: Independent global Notfor-Profit organization (started in 1993)

promoting accountability, sustainable business practice n CR Equator principles, 2003: A voluntary financial industry benchmark for determining, assessing and

managing social & environmental risk in project financing.

Social Accountability SA 8000, 2007: Standard for decent working conditions, developed and overseenby Social Accountability International (SAI). To seek certification to SA8000 the organization must apply to

a SAAS-accredited auditing firm, or certification body. The following are the areas of accountability: child

labor, forced labor, health safety, freedom of association and CB, discrimination, discipline, working hours,

compensation, management systems.

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Awards

International-golden peacock award,Green Building

National

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Millennium Development Goals (MDGs), 2000

Eight international development goals with 21 targets and aseries of measurable indicators for each target were agreed

upon by 192 UN members and at least 23 international

organizations to be achieved by the year 2015.

1. Eradicate extreme poverty and hunger

2. Achieve universal primary education

3. Promote gender equality and empower women

4. Reduce child mortality rate

5. Improve maternal health

6. Combat HIV/AIDS, malaria and other diseases7. Ensure environmental sustainability

8. Develop a global partnership for development

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O i ti dil ? Th fli


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Organization dilemma? The flip

side Codes create auditing and reporting fatigue - CSR audits and

reports cost much time and expense. There are over 100s of

standards which usually have their own certification and disclosurerequirements, despite considerable overlap.

Codes create confusion in the market - The excess number ofCSR codes and standards creates noise in the mind of the customer

and the financial analyst. If a company has ISO 14001 but is not a

signatory to the CERES principles.

Codes can be a mask for irresponsibility- The collapse of Enronand Worldcom (the banking crisis) makes it clear that CSR codes

and standards (which all these companies had or have) can often

mask a deeper unsustainable business model or irresponsible

corporate culture. Despite genuine efforts by CSR departments,

their activity remains marginal. Codes are no substitute for regulation - The voluntary nature of

CSR codes and standards means that they will inevitably only apply

to the progressive few, and even those may choose to dilute their

commitments during financial hard times, or hide behind.

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