Corporate Eye

Standards Schemes and Certificates

confused manJohn Comana sat at his desk, headache pumping and a queasy feeling in his stomach. “I’ll take responsibility!” he’d volunteered. Now it didn’t seem such a smart move.

He, like many other corporate officers, has discovered that there are many different facets to environmental and social responsibility and although John Comana may be fictional, the headache is a very real one for many businesses.

No firm guidance exists on what corporate responsibility is, which activities should be measured or how data should be presented.

Instead there is the simple regulatory requirement that there must be analysis of “environmental … social and community issues”, including an appropriate measure of the company’s performance.

To try and resolve this we’ve divided various social reporting instruments into standards, schemes and certificates. It’s not an absolute division and there is a lot of overlap between the various areas.

However we hope it will help to clarify the situation and relieve the headache a little.

These are instruments used to ensure that a business is meeting a common set of guidelines in its internal processes. Often they’re used as the foundation for best practice and express a guarantee of quality.

Standards are commonly expressed as a set of indicators and are audited by an independent body. Usually the company will be awarded a certificate if the audit is successful.

Available CSR Standards include:

  • ISO 14000 from the International Organisation of Standardisation; which concentrates on environmental management
  • GRI G3, the third set of guidelines from the Global Reporting Initiative; concentrates on social, economic and environmental indicators, with sector specific details
  • AA 1000, from the Institute of Social and Ethical Accountability; concentrates on ethical corporate behaviour
  • SA 8000, from Social Accountability International; concentrates upon labour standards

In addition to these, ISO 26000 is due for publication in 2010. This is a broad standard aimed at addressing social responsibility across both public and private sectors.

Schemes differ from standards because they do not result in a measurable outcome.

Some schemes ask companies to sign up to a set of principles, which they are then expected to observe and uphold. Others are a collaboration of businesses seeking to identify and promote best practice in one or more areas.

Some of the best known schemes are:

  • United Nations Global Compact, which addresses labour standards, environmental concerns and human rights
  • Ethical Trading Initiative, which focuses solely upon labour standards
  • Business For Social Reporting, which aims to identify and promote best practice

Generally, schemes are more co-operative in nature where standards are more prescriptive.

Certificates tend to concentrate upon one aspect of a business rather than its activities in general. Many are derived from standards or schemes and often, though not always, they’re industry specific.

Examples of current certification schemes include:

  • Energy Performance Certificates, required for all homes and business premises when they are leased or sold
  • Forest Stewardship Council certification, to show that wood comes from a sustainable source
  • Construction Skills Certification, for builders to show a high level of competence

Certification is an increasingly popular way of introducing regulation to the market place. A lack of certification in particular areas will start to be seen as a mark of poor performance and could even attract regulatory fines.

Supply chains are commonly seen as being the next target for certification, especially for manufacturers and businesses that offshore some part of their labour.

The Future
In the coming months we’ll be looking at each of these areas in closer detail. We’ll be examining the best way for information and results to be posted on a company’s website and what specific issues different sectors may face.

In the meantime if there is any particular issue you’d like us to address, please don’t hesitate to drop us a line.

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A former CTO, Chris has a broad and varied background. He’s been involved with blue chips, consultancies & SMEs across a wide variety of sectors and has worked in Europe, the Middle East and Australia. In 2007 he decided to combine his knowledge of business and IT with his passion for all things sustainable and has been busy writing ever since. However, his greatest ambition remains to brew the perfect cup of coffee.