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Taking CSRseriously

The role of standards

A research report

Welcome

Corporate social responsibility (CSR) issteadily climbing up the business agenda.It is recognized by many organizations asan important issue, but one that can bedifficult to translate into practical action.

This report explores the role thatstandards can play in supportingorganizations willing to engage withCSR. It also highlights the need forfurther work to help organizationsapproach CSR in an integrated manner,avoiding separate management systemsor the consideration of CSR as a ‘bolt-onactivity’.

BSI British Standards is the NationalStandards Body for the United Kingdomand operates under a Royal Charter anda Memorandum of Understanding (MoU)with the UK government. BSI isresponsible for the development andmaintenance of consensus-basedstandards for all stakeholders(government, consumers, industry,academia, etc) through more than 1,200technical committees covering a widevariety of subjects. BSI also representsand feeds into the European and

international standards developmentprocesses on behalf of the UnitedKingdom.

The benefits of standardization arewidespread – they provide an exampleof best practice and can promoteinnovation. Standards are designed toset out clear and unambiguousprovisions and performance objectives inorder to improve the use of resources,stimulate innovation through the quickand efficient dissemination of criticalinformation, or improve the quality oflife through health, safety,environmental or social requirements.

As a first step towards providing guidancefor organizations on CSR, BSI publishedBS 8900:2006 Guidance for managingsustainable development. This has beenfollowed by the publication of the first ina series of sector-specific standards forsustainable development – BS 8901:2007Specification for a sustainable eventmanagement system with guidance foruse. This standard provides requirementsfor planning and managing sustainableevents of all sizes and types, ranging from

large-scale conferences and uniqueevents, such as the 2012 Olympics, tomusic festivals and air shows.

At an international level, work continueson the development of an InternationalStandard providing guidelines for socialresponsibility (SR). The guidancestandard is due to be published inSeptember 2010 as ISO 26000. Theobjective of ISO 26000 is to assistorganizations in addressing their socialresponsibilities while respecting cultural,societal, environmental and legaldifferences and economic developmentconditions. It will be consistent, and notin conflict with, existing documents,international treaties and conventionsand existing ISO standards.

This report provides a useful insight intothe development of strategies for CSRacross a wide range of organizations.BSI would like to thank all of theorganizations for taking part in thisresearch and contributing to theongoing debate around CSR and therole of standardization.

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Taking CSR seriously | The role of standards

Most large organizations have embracedthe rhetoric of corporate socialresponsibility (CSR), but have theyactually changed their behaviour as aresult? While they may have engaged inCSR to a degree, for many it is stilllargely a bolt-on activity aimed atenhancing the organization’s publicprofile.

Others, however, have taken CSR a stepfurther by genuinely integrating it intotheir core business activities – therebyembedding CSR behaviour in theircentral management processes. Theseorganizations are currently in theminority, but our research shows thatthe CSR laggards are keen to catch up.

Indeed, our research suggests that thedevelopment of CSR practice hasentered a crucial phase. Thoseresponsible for CSR want to move theirorganizations further along the maturitycurve and adopt a more developedapproach to the issue before themomentum for change wanes.

Practice in this area is evolving rapidly,with a wide range of different approachesemerging – even among thoseorganizations pioneering change. There isno single correct method of engaging inCSR. However, our research has identifieda common thread among leadingorganizations: formal standardization.

This is not to say that all of the leadingorganizations that have taken part inour research have implemented CSRstrategies that have independentlyverified, external standards at their core.While some organizations have done so– and have also integrated the processesneeded to comply with these standardsinto their wider management systems –others have not.

Why not? Some of the leading companiesfeel that existing CSR standards are toosubjective, too vague or incomplete.Others see less of a role for generic,external standards, which they feel do notreally apply to their business. Instead, theyprefer to develop their own codes orvalues and have their performance againstthem validated externally.

However, it is important to stress thatthese companies are aware of theindependent standards that areavailable, and often cherry-pick the mostrelevant parts when creating their owninternal codes.

Organizations that have not yet travelledas far down the road to CSR maturity donot share this awareness of the role thatstandards could play. They still recognizethe importance of CSR, but for manythis is not universal across the business.In some cases, corporate functions ordiscrete business units have yet to buy into the idea, seeing CSR as something“the CSR people do”.

For others, the importance of CSR isrecognized by those closest to the issues– often in marketing or governancefunctions – but has yet to be supportedat board level. In such circumstances,the groundswell of support needed toembed CSR into day-to-day businessprocesses is lacking.

Organizations seeking to resolve thesechallenges should consider a greater rolefor standardization in their CSRstrategies. By adopting independentstandards, or using them as a base uponwhich to build their own, they will bebetter able to deal with problems suchas cloudy terminology or ill-definedresponsibilities – two challenges manyare struggling to overcome.

It is likely that these organizations willhave already made substantialinvestments to ensure that their systemsrelating to human resources, informationtechnology or general management, forexample, comply with recognizedstandards and can be audited.

Surely their CSR efforts would be moreeffective if they were integrated withthese systems, rather than operatingthrough separate processes? In mostcases, this integration is lacking. But,again, those companies with moremature approaches to CSR are workingon ways to resolve this, and are findingthat standardization is a powerful tool.

Indeed, there is one resoundingconclusion to our research: whetherformally adopting independentstandards or using them as a base totailor their own versions, organizationsthat take CSR seriously takestandardization seriously.

Summary

There is no single correct method ofengaging in CSR. However, research hasidentified a common thread among leadingorganizations: formal standardization.

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Are organizations taking CSR seriously?

Most companies – large ones, in particular– are fluent in the rhetoric of corporatesocial responsibility (CSR). Publicly, theydescribe CSR as an important issue. Butare the people charged with theresponsibility for CSR within organizationsable to make these fine words a reality?

Walk the talk

People need sufficient time during theirworking day to push a CSR agenda; butonly one-third of the respondents in oursurvey described CSR as their main areaof responsibility – and only half of thatgroup actually spend over 75% of theirtime engaged in CSR. More commonly,CSR is balanced against a range of otherwork pressures. Two-thirds of therespondents said CSR wasn’t their mainjob – and almost all of them actuallyspent less than 10% of their time on it(see Figure 1). Are such organizationsreally taking CSR seriously?

The people responsible for CSR alsoneed support, and the survey findingshere were not very encouraging either.We asked respondents how they feltabout four different statementsconcerning the support they receivefrom their organization. Asked whetherthey had the resources, budget, skillsand knowledge to perform their role,the answer can best be described as ahesitant yes, but only just. Many saidno. Those people who said CSR wastheir main responsibility felt they weregetting better support.

Embedding CSR

One of our research hypotheses assumedthat those organizations with a moremature approach to CSR would ensurethat their CSR goals feature in theircompliance with management systemsstandards. When an organization hasalready invested time and money to

certify its environmental performanceprocesses in accordance with ISO 14001,for example, it makes sense to integraterelevant CSR goals into those processes.Our research found that mostorganizations have not done so.

The research project comprised anonline questionnaire and a series of in-depth follow-up interviews withexecutives working on CSR agenda intheir organizations.

In total, 108 respondents took part in thesurvey, split approximately equallybetween those with specific responsibilityfor CSR and those undertaking a moregeneral role within their organization.

Of those who took part in the survey,one in four worked for organizations

with annual turnover in excess of£500m and just over half reported aturnover of less than £26m.

Almost one in every three respondentsclaimed their organization worked in theservice sector, with fewer than one infive active in the construction sector.Manufacturing and engineeringaccounted for 8% and 7% respectively,with public sector organizations alsocontributing 7% of responses.

Research methodology

58%

15%

5%

3%

19%

< 10%

10% – 29%

30% – 49%

50% – 74%

75% – 100%

Figure 1: How much time is actually

spent on CSR?

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We asked respondents to indicate theextent to which CSR goals wereintegrated with six specific managementsystem standards (see Figure 2). Themajority did not feel that CSR goalsfeatured to any great extent.

The size of organization did have animpact here: the smaller theorganization, the less likely it is that ituses standards (therefore precluding theinclusion of, or reference to, CSR).However, it is also true to say that while

higher proportions of largerorganizations tend to use variousstandards, there is a frequent lack ofknowledge of the degree to which CSRis embedded in these standards.

We also asked respondents about theextent to which their organizations usedcertain CSR-specific standards, such asthe Global Reporting Initiative and BS 8900 on managing sustainabledevelopment. For each standard, at least40% were unaware of its existence,rising to 60% for the OECD guidance onbribery and corruption (see Figure 3).

Very few organizations use thesestandards, and when they do they tendnot to have their compliance certifiedexternally. The exception is whereorganizations have created their own in-house standard. But even here, only aquarter of these standards have been‘wholly accepted’ across the organizationand only a few have been ‘certified’.

Mean score

ISO 9000 series – quality management

ISO 14001 – environmental management

OHSAS 18001/2 – occupational health

BS 25999 – business continuity management

PAS 99 – integrated management

ISO/IEC 27001 – information security management

2.51

2.41

2.04

1.50

1.36

1.65

Figure 2: Management system standards – degree of CSR embedding

Global Reporting Initiative (GRI)

AccountAbility (AA) 1000

BS 8900 – guidance for managing sustainable development

Social Accountability (SA) 8000

United Nations Global Compact

OECD – guidance on bribery and corruption

Our own in-house standard

Unaware of standard

Aware but don’t use

Used in part

Wholly adopted

Certified

Figure 3: Extent to which certain CSR standards are used

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Integrating CSR

Another research hypothesis is thatorganizations with a mature approach toCSR will integrate their CSR systems. Butagain, this was not the case for mostrespondents. Only one-fifth said thattheir CSR systems are partially or fully

integrated (see Figure 4). Theserespondents have a broad profile andinclude small as well as large companies,although proportionately more largecompanies indicated partial or fullintegration.

Level of maturity

Finally, we asked respondents to assessthe maturity of their organization’sapproach to CSR. Options here rangedfrom “CSR is a serious issue, but wedon’t deal with it in any formal way” to“CSR is a formal consideration ineverything we do – it affects everyimportant business decision”.

The hypothesis is that as organizationsdevelop their approach to CSR, theymove away from stand-alone, silo-basedprojects and gradually embed CSR issuesinto normal business decision-makingprocesses.

Given the answers reported already, itshould not come as a surprise thatalmost half of all respondents felt thattheir organization’s level of maturity wasat a basic level. One in threerespondents put their organization inthe middle of our maturity scale, withjust under one in five rankingthemselves at the highest level ofmaturity (see Figure 5).

Not integrated at all Fully integrated

%

30

25

20

15

10

5

0Score 1 2 3 4 5

Figure 4: Degree to which CSR systems are integrated

48%

CSR is a serious issue, but we don’t deal with it in any formal way

CSR is important – we produce public reports, for example – but we don’t have any other dedicated CSR projects

We have dedicated CSR projects that are resourced to achieve clear CSR objectives

We implement CSR projects and programmes that impact on the core business

CSR is a formal consideration in everything we do – it affects every important business decision

10%

7%

17%

18%

Figure 5: Level of CSR maturity

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Altruism or compliance?

We asked respondents what motivatedtheir organization’s approach to CSR.One-third said the main driver is agenuine tradition of altruism or socialresponsibility – particularly amongthose people who said CSR was theirmain responsibility. Altruism wasclosely followed by a need to meetlegal requirements – especially bythose who said CSR was only part oftheir job.

Given that such people are more likelyto feel their organization doesn’t givethem enough support, it’s tempting toconclude that those who engage withCSR for mainly legal reasons are nottaking it seriously enough. Concernsabout reputation management are alsoan important driver. Large organizations,in particular, engage with CSR in theexpectation that it would deliverbottom-line benefits.

Some of the respondents in our surveysaid their organization had engagedwith CSR out of a genuine tradition ofaltruism. The remainder, presumably,had decided at some point to invest inCSR. What prompted that decision?

Over 40% said CSR moved up thecorporate agenda when theorganization decided to build orenhance its brands. Close to one in foursaid there had been a change in theirregulatory environment or newlegislation. It could be said that suchcompanies – which tend to come fromthe engineering, electrical,manufacturing and service sectors –have had CSR forced upon them.

On the whole, respondents indicated awide range of reasons. Other significantexplanations involved concerted actionby customers or stakeholders, or newleadership within the organization.

Figure 6: Motivations behind approaches to CSR

Legal requirements 24%

Concern about reputation risk 19%

Genuine tradition of altruism and social responsibility 29%

Reduction in CO2 emissions and carbon management 8%

Pressure from shareholders 3%

Pressure from employees and job market 2%

Pressure from NGOs and stakeholder groups 3%

Anticipated bottom-line benefits –

Corporate governance guidance 6%

Reach new markets 1%

Create new products and services 3%

Other 3%

Figure 7: Events that persuaded organizations to take CSR seriously

A merger or acquisition 3%

New leadership within the organization 17%

A major incident/accident with reputation impact 7%

New legislation required change 23%

Litigation against the organization 2%

Change of regulatory environment 24%

Regulatory action initiated against the organization 3%

Decision to build/enhance brand(s) 44%

Concerted action by customers or stakeholders 16%

Concerted action by shareholders 7%

A natural part of our approach to our business 15%

Other 4%

Don’t know 12%

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Most organizations say they take CSRseriously, but scratch the surface andwhat are they actually doing? There hasbeen plenty of research into questionssuch as why they engage with CSR,whether their intentions are genuine ordo they really make any difference. Wewanted to put those issues to one side,important though they may be, andexplore a different question: How arethey actually implementing andintegrating CSR?

Best practice suggests that CSR shouldmove away from being a stand-aloneactivity and be part of business-as-usualinstead – a responsibility for everyone inthe organization. We interviewed peopleinvolved in CSR from a range oforganizations to find out how they aredealing with this challenge and whatpart standardization plays in their efforts.

Alliance Boots

Scrapping its CSR budgets hashelped Alliance Boots to embed CSRinto management responsibilities.

Alliance Boots takes an approach to CSRthat is markedly different to thatadopted by many of the companies inour research. “What we’ve done is saythat there are no budgets for CSR,” saysRichard Ellis, group head of corporatesocial responsibility at Alliance Boots.“All of the activity is undertaken as partof the day-to-day work that people doacross the organization.”

Why is that? “Most companies haveCSR departments with budgets thatenable people who are connected to the

CSR agenda to go off and do things,”he explains. “What they then decide todo might not be entirely consistent withthe aims and objectives of the business,and the rest of the business can say thatCSR is dealt with in a separatedepartment and is not theirresponsibility.” At Alliance Boots,diversity and volunteering are embeddedin the HR department, for example, androad transport emissions are built intotransport and logistics.

Because general managers areresponsible for CSR, and have to spendtheir own budgets on it, “I have topersuade my colleagues that these arethe right things to do,” says Mr Ellis.Encouraged by Mr Ellis, managers at thecompany’s Nottingham headquartershave removed all waste-paper bins andintroduced recycling facilities, which hasreduced waste to landfill by 35% andsaved the company money. “Theresponsibility for making that happensits with the people who take care ofadmin on site,” he says.

“What I’m trying to do is see how we canget as much as possible done within theexisting budgets that people have,” saysMr Ellis. “The beauty of the system is thatI can come up with ideas for differentways of doing things, but it’s mycolleagues who have the money and theresources needed to make things happen,so we are only going to do things if it isperceived to be of real value.”

That approach means the company haseschewed some moves that would earnit easy CSR brownie points, and lookedfor more creative solutions instead. Ithas stopped buying renewable energy,for example, because now that so manycompanies have committed to use it theprice has rocketed.

“We’ve decided that it’s not worthpaying a huge sum of money just to saythat we have got renewable energy,”says Mr Ellis. It is finding other ways toreduce its carbon footprint instead. Forsimilar reasons, it has not committed tousing only Fair Trade cotton and doesnot engage in carbon offsetting.

Mr Ellis says that the company is simplytrying to take a “sensible” approach toCSR. That attitude extends tocompliance with standards. “You canpotentially spend a fortune gettingeverything verified and meeting all therequirements of whatever ISO you gofor, but what real difference will itactually make?” he asks. The challenge,he says, is to look at the business,determine what relevant standards andguidance exist, and then decide whichones to adopt. The question is the sameas before: “Where best can we spendour money to make the biggestdifference?”

If the aim is to reduce carbon footprint,for example, following a standard mightbe useful but is not the aim in itself,

Case studies – CSR in action

What I’m trying to do, is see how we canget as much as possible done within theexisting budgets that people have.

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says Mr Ellis. Alliance Boots is one ofonly three companies to receive acarbon reduction label from the CarbonTrust. This reflects changes made to ashampoo line that reduced the carbonfootprint of the product by 25%. Thatsounds impressive, but it only represents7% of the carbon footprint of washingyour hair – 93% comes from what theconsumer does with the shampoo,explains Mr Ellis, such as heating waterand using a hairdryer.

“So do we continue to make biginvestments in reducing the carbonfootprint of the shampoo by 5%, or dowe look at whether we can getshampoos that work better at lowertemperatures?” he asks. And even then:“Would consumers be willing to turnthe thermostat down when they washtheir hair?”

That simple shampoo example points tosome of the complexities of this andother CSR issues. “Are we going to geta carbon reduction label for all of ourproducts? No,” says Mr Ellis. “But havewe learnt something from it? Yes, wemost certainly have and we are able toincorporate it into all of our practices,but getting a carbon label for all of ourproducts is not a Holy Grail.”

Body ShopInternational

The Body Shop does not formallyadopt many international standards,but it does take independentverification and values-auditingseriously.

The Body Shop International is one ofthe few companies that can genuinelyclaim to have CSR embedded in itscorporate DNA. The company, foundedby the late ethical and environmentalcampaigner Anita Roddick, has done agreat deal to establish the ground rulesin the CSR debate.

Jan Buckingham, the company’s directorof global values, is the executivemanagement board member responsiblefor making sure those core CSRprinciples are upheld. She has a team ofsix in her office: half of the time theywork on CSR in the business, while theother half is spent working on globalsocial campaigns – Ms Buckingham is atrustee of the Body Shop charitablefoundation. Each of the company’s fourregions also has its own CSR person.

“My team is small and very central; it’sfocused on developing policies,communicating those policies throughthe business, making sure we’ve got theright systems to deliver the policies –and also reporting back,” she says. The‘values team’ designs and delivers thesocial campaigns that the company runsto meet its objectives of deliveringpositive social change on issues such asdomestic violence and AIDS.

The Body Shop keeps abreast of allrelevant CSR standards and has policiesthat require the company to perform tothe same high standards, but doesn’tclaim to fully comply with any of them.

“Following a standard prescriptiondoesn’t really help us, and I think that’spartly because the Body Shop was therebefore the standards were, and we’vedeveloped our own way of working,”says Ms Buckingham. “If it works for us,

there isn’t a compelling reason forchange.” Being a pioneer means thatmany of the company’s ways ofworking, such as community trade, wereestablished before there was a usefulstandard to apply.

However, the Body Shop does takeindependent verification and validationseriously. It complies with the HumaneCosmetics Standard and its processesare accredited by the British Union forthe Abolition of Vivisection. Its latestreport on general CSR values wasaudited by URS Verification. And it doesmake reference to standards such as theGRI in its corporate reporting, “to makeit easy for people to cross reference,”says Ms Buckingham.

The company might adopt an externalstandard on sustainability, for example,if there was a high level of publicawareness about what it represented.But there would have to be realsubstance behind it: it would need totake into account a whole range ofcriteria on sustainability, reflect thecomplexity of interrelationships betweeneconomic, social and environmentalissues, and be verified by a third party.

“It would have to be a standard thatreally helped our customers,” she says.“None of the standards right nowwould be easy for high-street shoppersto understand.” Naturally, the BodyShop hopes that is what its brand does.

The company works hard to integrate itsvalues into the business. “It’s ineveryone’s job description that they actto support the values; everyone has aninduction on what those values are, andwhat it means for their job,” says MsBuckingham. “All the directors’

We develop policies, communicate themthrough the business, make sure they’ve gotthe right systems to deliver them – and alsoreport back.

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functional objectives have an articulationof what their part means – they cascadethat down their teams. My guys thenpull all of that together to report on itacross the whole business. When theexecutive team meets we can see howwe are performing as a total businessand what we need to be doing better. Itis very well integrated.”

When the company’s value reports areindependently verified, external auditorswill interview people to determinewhether they understand what thevalues mean, “and that it’s not just adepartment delivering campaignssomewhere – it is something that theyneed to do every day in their part of thebusiness,” Ms Buckingham explains.

A developing CSR issue on the BodyShop’s agenda is sustainabledevelopment. A standard might beuseful here, but it is a subjectiveconcept, she says.

The Body Shop knows what it means forits business, but it would be difficult togeneralize into a management systemsapproach. The company has beeninvolved in the Roundtable onSustainable Palm Oil to encourage bettermanagement of this importantcosmetics ingredient.

Reduction of waste and the challenge ofclimate change are also on its agenda.“Some of the very big issues requireeach company to look at their ownoperations and challenge themselves todo better. That’s probably moreimportant than having a standard tofollow.”

First ChoiceHolidays

First Choice uses independentstandards as a way of provokingmanagement discussion about theimpact of CSR issues.

Jane Ashton, CSR manager at FirstChoice Holidays, works in a departmentof three people. “Much of our work isfocused around engaging senior andmiddle management and theirdepartments and helping them to setCSR objectives within their generalbusiness objectives,” she explains.

The company’s EnvironmentalManagement System is aligned to ISO14001 – into which its CSR activities arepartially integrated – and it reports inline with GRI (level C). It tends to takeparts of any standards that are relevantand add its own KPIs, rather than optingfor full, certified compliance.

However, there are industry-specificstandards that it follows more closely,such as the Travelife standards developedby trade body the UK Federation of TourOperators. This is an auditedaccreditation scheme that relates tosustainability in the supply chain, andsupplier data is stored and managed onan industry-shared database.

CSR reporting systems are therefore notclosely integrated, says Ms Ashton. “Wehaven’t got a management informationsystem that is totally geared to CSR.”The processes used to gatherinformation on supply chainsustainability and CO2 emissions don’ttalk to each other, for example. But that

lack of integration is not specific to theCSR realm. The group has four distinctsectors and over 70 separate businessunits – a number that will more thandouble under a current merger – and itsgeneral management systems are notintegrated either.

“I don’t think a single CSR informationsystem would be a panacea anyway,”says Ms Ashton. In 2007 the group’sfinancial accounting function workedwith CSR to collect group-wide data onCO2 emissions for the company’ssubmission to the Carbon DisclosureProject. It is planned to continue thiscollaboration as it becomes increasinglyimportant to bring accounting rigour toCO2 data management.

Ms Ashton says there are over 100tourism-related eco-labels or standardsworldwide, but most don’t incorporatesocial and economic issues. It’s moreeffective, she says, to work issuesthrough internally with peopleresponsible for management – talkingabout CSR impacts and measures:“That’s much more useful than adoptingsomeone else’s standard wholesale.”

That kind of internal engagementprocess is vital to get people to buy intoCSR. “In large swathes of the businessCSR is being taken seriously, but anumber of businesses are only justbeginning to engage,” she explains.Many corporate functions see thebusiness relevance of CSR, but some stillthink of it as a bolt-on to an alreadybusy day job. For the time being, CSR isnot a formal part of every businessdecision because it is not always acommercial imperative, but it isincreasingly an important factor in long-term strategy planning.

First Choice tends to take relevant parts ofstandards and add its own KPIs, ratherthan opting for full, certified compliance.

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Despite a media focus on theenvironmental impact of flying, MsAshton says the company’s own researchshows that the evidence is mixed as tothe value customers currently place onsocial or environmental concerns whenthey buy a holiday. “Our customer baseis not clamouring for it,” she says.”However, there are indications thatthese issues are strong secondary driversin the decision-making process, and webelieve they will become more critical inthe future.”

Hallmark Cards

Hallmark seeks a more standardizedapproach to CSR as a way ofcommunicating its value, raisingunderstanding and achieving buy-in.

Hallmark Cards, the world’s largestgreeting card company based in KansasCity, is a family-owned business with astrong sense of “family values” but hasbeen a relative latecomer to CSR, sayssupplier development manager BrianCollins.

Hallmark UK sells cards and giftproducts in franchised shops and alsosells to 18 major retailers in the UK,including Tesco, Marks & Spencer,Oxfam, John Lewis, ASDA, Next and theCo-op. These customers are known fortaking CSR seriously and their pressureand encouragement has driven Hallmarkto do likewise. Last year it won animprover award from Business in theCommunity for its efforts.

The company used to treat CSR largelyas a supply chain matter but has realized

that is just part of the issue, says MrCollins. It has now developed aninitiative called the ReSPECTprogramme, which has six platformsthat cover being a responsible employer,sustainability, performance, theenvironment, community, and tradingwith integrity. The CSR team hasdeveloped individual statements, goalsand KPIs for each of those platforms.Much of the work is positively linkedacross several platforms.

“Speaking from a company perspective,we had a general lack of understandingof CSR and that stems from an absenceof communication about what we aredoing, why we are doing it, how we aredoing it and how it can help us. Part ofthe ReSPECT programme is to addressthis communication issue, bothinternally and externally,” he says.

Hallmark has been working tostandardize its CSR approach to itssupply chain, developing its ownstandard based on the Ethical TradingInitiative Base Code. A global ethicsmanagement team – six people in total– has developed a generic code andprocedures for its implementation. Thishas already had major bottom-linebenefits: some major retailer/brandcustomers now accept the supply chainstandards of Hallmark and all itssubsidiaries globally.

Mr Collins says a globally acceptedsupply chain standard – something likeISO 26000, the United Nations GlobalCompact or the CIES/GSCP code –would be very useful as there are somany similar codes in existence. “Thereused to be hundreds, there are probablydozens now, but that’s still far toomany,” he says.

Why doesn’t Hallmark adopt more CSR-specific standards? One issue is thatHallmark UK, like many US-ownedcompanies, does not have a formalquality system in non-production areas,which many formal standards assume asa basic foundation, Mr Collins explains.

But there are other reasons. In someareas, like supply chain ethics, there aretoo many retailer/brand-based standardsand codes; in other areas, there arestandards, but the high rate of changemeans many are out of date, and insome cases there are very few standardsat all – sustainability is an example, hesays.

It would also help to have a newstandard that integrated those thattouch on all CSR issues, he argues.There are a lot of environment issues inthe supply chain, which somecompanies include in their ethics policiesbut others argue should be a separatesystem, not reporting along with ethics.

A poor understanding of CSR stems froman absence of communication about what,why and how we are doing things – andhow it can help us.

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Some organizations keep ethics andquality totally separate, with differentaudit teams – if environment, forexample, is then added, this leads to aproliferation of systems and audits. Anintegrated standard would clarify bestpractice, Mr Collins believes. In themeantime, Hallmark makes the generaldistinction between sustainabilityrelating to product and design, andenvironment linked to procurement andthe supply chain.

Mr Collins says that in the long term –maybe five or six years – it would belogical for Hallmark to integrate its CSRsystems more closely. “The auditing isnot very different, so it would seem thatthere should be some integration atstandard level and auditing level, and italso follows that most of the controlsand internal systems would also besimilar,” he says.

“But it could become unwieldy if youintegrate too many standards/functions;ethics needs a different mindset toquality and there is a risk of losing thefocus on hugely important topics likethe environment.”

There is also a benefit to keeping somesystems separate, he believes, as thescope for standardization is limited.Quality, information security or businesscontinuity are black or white issues,where the differences between right andwrong are clear. But CSR-related issues,particularly labour standards, tend to beless clear-cut with no black and white.

With supply chain ethics, you can havecommon principles, but the practiceneeds to be flexible, he argues. “It maybe the right thing to do in one situationbut wrong in another.”

KPMG

A day-one decision not to createparallel CSR systems has enabledKPMG to achieve a high level ofintegration.

As director of CSR at business advisoryfirm KPMG Europe, Michael Kelly isresponsible for all CSR strategy andimplementation in the United Kingdom,Switzerland and Germany, with a directreporting line to a main board memberof KPMG Europe. There are nine peopleworking in his department, which wasestablished 13 years ago.

As a leading audit firm, it’s notsurprising that KPMG takes standards,verification and certification seriously.From an early stage it recognized theimportance of embedding CSR into theinfrastructure of the firm by usingexisting management systems andprocesses, and not creating any thatwere CSR-specific.

“The central function is small and couldnever run a management system thatmonitors 11,000 people,” Mr Kellyexplains. When an employee is involvedin voluntary work, for example, theyrecord their activities in the same systemused to gather data on fee-earningwork. And when the procurementfunction tenders for CSR-friendly energysupplies, it uses the firm’s standardcontract terms and processes. “Theydon’t use special CSR forms,” says MrKelly.

Work to embed standards inmanagement processes goes “atdifferent speeds,” he says, becausecompliance is not static. On

environmental issues, for example, thefirm started working towards ISO 14001in 2000 and was certified in 2003. “Weuse the standards as a framework andintegration changes over time,” says MrKelly. “It’s not the type of managementfunction where you implement it andtick it and say it’s finished.”

Environmental issues have now beenintegrated into the infrastructure of thefirm completely, in all of its maintenancecontracts, for example, “but for thegeneral staff it’s a question ofintegrating it where it’s relevant,” hesays.

“It’s mature and people understand theenvironmental issues where they havean impact. They might not haveknowledge of the growth in the marketfor renewable energy, for example, butthey do know – and are trained and it isintegrated from induction through toappraisals – that turning your PC off atnight is the correct course ofbehaviour.”

In other areas, the scope of CSRchanges year-on-year, says Mr Kelly.Domestic violence has become animportant workplace issue, for example,so the firm now trains its appraisers torecognize signs that someone is at riskand has support mechanisms in place.

The firm holds regular forums to identifynew CSR trends and listens closely tothe expectations of new graduates,which the firm recruits in large numbersand who are an important driver of itsCSR work. “It’s a question ofanticipating changes in society’sexpectations – reviewing what isexpected of a responsible business on aregular basis,” says Mr Kelly.

KPMG holds regular forums to anticipatechanges in society’s expectations andreview what is expected of a responsiblebusiness.

11


Old Mutual

Old Mutual is planning a morestandardized approach to CSR,having won executive-levelrecognition of the need for betterintegration.

Helen Wilson, corporate responsibilitymanager, has been working hard to getfinancial services group Old Mutualwhere she’d like it to be on CSR. As theindividual directly responsible for CSR ata group level, she works closely withsenior management to formulatecommon guidelines and frameworks forthe company’s business units.

The company has a long history ofaltruism and, along with its Africanheritage, CSR had traditionally meantclose work with communities. As suchwork is undertaken by foundationswithin the different geographies orthrough the business units directly, CSRhas been viewed internally as distinctfrom the principal operating business,Ms Wilson explains. That has nowchanged.

Old Mutual recently completed astrategic review, which determined thepositioning and direction of thecompany going forward. “CSR formed apart of that,” she says. “We workedhard in demonstrating to internalaudiences the importance of CSR to ourstakeholders, and how it will be a keyfactor in the sustainable growth of ourbusiness.”

Old Mutual remains active in meetingthe FTSE4Good requirements and hasbeen part of the Forge Group, abespoke consortium of financial services

institutions developing a climate changeguidance framework.

Old Mutual complies with the UnitedNations Global Compact and the boardagrees that compliance with suchstandards is now a mainstream businessdecision. The company is alsocommitted to integration. “Group-widestandards, that’s the way we’re going,”Ms Wilson says.

“Our main task now is to continue toraise awareness as to where CSR canadd value across the group anddemonstrate and evaluate theexpectations of the company’sstakeholders. We need to show that ifyou embed CSR in what we do, ourbusiness can be even stronger. That ispaying off now – the board andexecutives are empowering us to go outand do what we need to do.”

RDC

Formal recognition of internationalstandards is a key businessdifferentiator for recycling companyRDC, but are CSR standards toosubjective?

RDC, a computer reuse and recyclingbusiness, is a company that takes both

CSR and formal standardizationseriously. It complies with ISO 9001, ISO14001 and OHSAS 18001, and links itsefforts together through PAS 99, thespecification on integrated managementsystems.

“We think that they are the key standardsthat apply to our industry and we alwaysask our own suppliers whether they arecertified to these, and increasingly ourclients are asking the same of us,”explains Gary Griffiths, environmental andquality systems manager.

“Compliance with standards isimportant to us because the ability todeliver what we say we do is crucial towinning and maintaining business,” heexplains. “International standards thatare independently verified by accreditedcertification bodies help to reassure ourcustomers that we have invested thetime, effort and money in the processesand procedures that mean we deliverwhat they expect of us. It’s adifferentiator: we see it as more thanjust a token effort – as a good businesspractice, not just an ethical one.”

But even for a company as supportive ofstandards as RDC, its CSR efforts areonly partially integrated with its use ofmanagement standards. Why is that?“It’s a difficult area to develop into,”says Mr Griffiths, echoing a commentmade by many of the organizations we

Compliance with standards is important tous because the ability to deliver what wesay we do is crucial to winning andmaintaining business.

12


spoke to. “The language andterminology used differs within andbetween business sectors and countries.We can integrate an environmentalmanagement system because we aretalking about given regulations,especially on the health and safety side,but CSR is still subjective. Being able tosay that we have systems and processesthat meet CSR requirements is difficultwhen there is no simple definition ofwhat CSR is.”

Mr Griffiths would like to see a standardon CSR that established commondefinitions for terms such as socialresponsibility, sustainable development,ethical practices, carbon footprint andresponsible energy use.

“What we are looking for is consensusfrom all parties about what CSR actuallymeans,” he says. The lack of clarity is inthose areas where CSR is less significant,such as finance and training. Mr Griffithsknows that standards do exist on theseissues, but says some are too detailedand others too abstract: “I’d like a hymnsheet that we can all sing from, even ifsome are soprano and some are bass.”

Ricoh Europe plc

By linking CSR to a unified assurancefunction, Ricoh hopes to achieveefficiencies, closer integration andbetter business practice.

Ricoh is planning to embed CSR into itsbusiness by creating a new assurancedivision that brings together systems onCSR, the environment and quality, andpotentially, information security and theUS Sarbanes-Oxley legislation oncontrols over financial reporting.

“All of this work has been doneindependently in the past, but this is thefirst attempt to consider bringing themall together under one head,” explainsPhil Goodliffe, Ricoh Europe plc’sassistant environmental manager.

Ricoh already has certified compliancewith international standards ISO 9001for quality, ISO 14001 for environmentand ISO/IEC 27001 for informationsecurity, and has been working oncombining them into one managementsystem. “Some of the standards are very

similar, in terms of document controls,records etc, and what we didn’t want todo was have three independent systemsfor each accreditation.” One reason isthe amount of audit time involved,which Mr Goodliffe describes as “quitefrightening”.

A corporate restructuring has delayedthese plans to reorganize, but MrGoodliffe says a more streamlinedadoption of recognized standards isabout good business practice, not justefficiency.

“You can operate a perfectly goodcompany without the standards. But ifyou deal, as we do, with global tendersfor equipment, sometimes you don’t getpast first base unless you candemonstrate that you follow certifiedstandards,” he concludes.

Ricoh already has certified compliancewith international standards for quality,environment and information security –and has been working on combining theminto one management system.

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BS 8900:2006 Guidance for managing

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environment and corporate responsibility

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Implementing Effective Corporate Social

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Web Accessibility: Making PAS 78 work


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Ethical Fashion Report

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Standards, specifications and books in the area of CSR

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