NEWS: SSC Launches New Website, Moves Blog to New Home

We’re delighted to announce that our website facelift is complete! Go to www.sustainabilityconsulting.com to see all the upgrades and new info – it’s been months in the works and we’re really proud of the way it’s turned out. One thing you do need to know: we’ve moved our blog over from WordPress so please update your bookmarks and RSS feeds with this new information:

SSC Blog: http://www.sustainabilityconsulting.com/blog/
RSS Feed: http://www.sustainabilityconsulting.com/blog/rss.xml

Other things to note: we’ve launched a podcast service! Every week we’ll be publishing a new interview with a sustainability consultant. This week, we have Dave Nelson of Nelson Sustainability discussing how to talk to executives about sustainability, and next week we’ll feature our interview with Jessica Vreeswijk of GreenITtools.com talking about–what else–Green IT.

SSC Podcast: http://www.sustainabilityconsulting.com/podcasts/
RSS Feed: http://www.sustainabilityconsulting.com/podcasts/rss.xml

And now you can also get a feed of SSC events on your RSS reader!

SSC Events: http://www.sustainabilityconsulting.com/events/
RSS Feed: http://www.sustainabilityconsulting.com/events/rss.xml

Finally, did you know that we’re on LinkedIn, Facebook, and Twitter? Come connect with us!

Facebook – we just created a Facebook page in April, and so it’s a little bare. But become a member today and help us create great content! We’ll be adding information on a regular basis – plus, it’s a fun way to see what people at SSC are up to in a less formal atmosphere.

LinkedIn – if you’re a sustainability consultant, join the SSC Consultant Network group on LinkedIn. We’ve currently got more than 100 members, and post upcoming events, projects, and job offers.

Twitter – Jennifer is experimenting with Twitter and enjoying the challenge of communicating in 140 characters or less. Follow her to find out what a “day in the life of a sustainability consultant” looks like!

VIEWS: Going Green at Women Owned Businesses

Dispatch from SSC President Jennifer Woofter

On Wednesday night I had the great pleasure to speak at the Greater DC Chapter of the National Association of Business Owners as part of their Entrepreneurial Excellence Series. The night’s topic was Going Green is Good For Business, and I was joined by two other fabulous women:

Antonella LoRe is the founder of Capital Green Cleaning a new commercial cleaning company serving the Washington, DC area. Capital Green Cleaning uses only environmentally-friendly cleaning products and is certified by the Green Clean Institute. She told the group about her decision to start a green business in the midst of the recession and the reality that green doesn’t to be more expensive.

Diane MacEachern is an entrepreneur, speaker, and author of multiple books including Big Green Purse: Use Your Spending Power to Create a Cleaner, Greener World. Diane is passionate about empowering consumers — especially women — to use their marketplace clout to protect the environment, and she spoke eloquently about the power of women business owners to positively impact the environment.

Although it was pouring down rain and I was definitely coming down with a cold, I had a warm fuzzy feeling sitting with other women business owners talking about issues so near to my heart AND so critical to our collective success in the marketplace.

I find that small business owners often have “green” values, but don’t know how to act upon them. Day to day pressures of payroll, purchasing, and business development sweep everything else aside—including the desire to be environmentally friendly. What I hope the women at the NAWBO event took away from our talk is that it doesn’t have to be one or the other: we can do good AND do well at the same time.

RESOURCES: How to Approach Employee Education on Sustainability

The following is a summary of The Engaged Organization Corporate Employee Environmental Education Survey and Case Study Findings Business & Environment by the National Environmental Education Foundation (NEEF) Business and Environment Program, March 2009

Creating “green jobs” is a timely topic, and leading companies have recognized the essential role that their employees play in aligning daily operations with corporate values regarding the environment and sustainability. Indeed, meeting persistent environmental challenges is now so critical to a company’s success that environmental knowledge cannot be isolated within an organization, but must be pervasive. Or put briefly, all jobs are now “green jobs.”

This is particularly true in troubled economic times because engaged employees are a business’ prime resource in cutting costs and finding innovative ways to reduce the firm’s environmental and social impacts. A survey to investigate this important topic finds that, despite some differences among companies, there are clear trends how leading companies approach internal environment and sustainability (E&S) employee education and engagement. Some of the key findings are:

Environment & Sustainability Knowledge Is Valuable

NEEF’s survey reveals that 65 percent of respondents value job candidates’ E&S knowledge, while 78 percent of respondents believe that the value of job candidates’ E&S knowledge will increase in importance as a hiring factor within five years.

Environment & Sustainability Education Is a Growing Trend

Companies are not only anticipating that the value of E&S knowledge will increase, many are already providing some education to their employees about these topics. Seventy-five percent of companies educate employees about corporate E&S goals and 56 percent of the respondents believe that their company has an advanced or very advanced E&S education program. The survey also indicated that many companies without an E&S education program are likely to adopt one soon.

E & S Approaches Vary Among Companies

The office responsible for E&S education varies among companies. Most companies cover a variety of environmental topics when communicating with employees. The most common topics include general E&S information and actions that can conserve or protect resources. According to survey respondents, the most important motivating factors for employees are concern for the environment and society, support or a mandate from the CEO, company reputation, and job satisfaction.

For several companies with effective E&S education programs, employee education is part of the companies’ culture, often beginning with the hiring process, as in the case of Clean Clothes, Inc. and Interface. Successful programs often tie the education program to the company’s mission and goals and performance evaluation processes. Most of the companies studied stressed the importance of involving all employees in a personal way. For example, Wal-Mart adjusts information to make it relevant to employees’ personal lives as well as their jobs. And companies like Stonyfield emphasized that measuring E&S performance is key to driving progress, as well as education.

Other creative processes used by organizations to influence employees include multi-departmental leadership, employee-led “green” teams, awards, online training, mixed-media communications, and performance incentives. In addition, several companies worked with external partners including non-governmental organizations (NGOs) to create successful E&S education programs, as in the case of Johnson & Johnson. But interestingly, companies often used more than one model in structuring their E&S education efforts, and the efforts often extended beyond employees to include suppliers and customers.

Challenges Still Exist

Despite the strong value placed on E&S education, companies revealed several challenges they face when engaging employees, including lack of money, time, resources and executive support. The survey and case studies generally highlighted six needs related to E&S education:

1. Education tools such as case studies, success stories, and training materials to help implement E&S education programs
2. General, as well as job-specific, educational information to raise environmental awareness and to help make the business case for E&S education
3. Credible third-party partners to help companies develop training materials, as well as to make the business case for E&S education
4. Methods to reach out to employees who were not yet interested in the environment or sustainability issues
5. Appropriate indicators for measuring the impact of E&S education, beyond just anecdotes
6. Forums for identifying and sharing models and best practices related to E&S education

SME CASE STUDY

In addition to the survey, case studies provide a closer look at formal and informal employee educational methods and programs among companies of varying sizes in different sectors. One of the featured case studies – Clean Clothes, Inc. (brand name Maggie’s Organics) – documents best practices and lessons learned for a small company of 13 employees.

Their Key Lessons:

1. Embed sustainability in your culture and product
2. Foster a culture of learning
3. Involve all employees in problem-solving
4. Use credible third-party information to make the case for environmental improvements
5. Influence the supply chain through education and dialog
6. Make the business case internally as well as with business partners

Some Highlights of Their Story:

– They’ve never had a formal environmental education or training program. Environmental education is just part of what they do, and so is reflected in their products and how they run the business and work with employees. It’s part of the mission, values and founding principles, and therefore it’s important for all employees to be involved in environmental decision-making.

– They also start at the beginning by screening new employees for their knowledge about organics and organic cotton. As a result, they have a corporate culture that attracts employees who are environmentally aware.

– They try to “walk the talk” in the office. They completed an extensive energy audit of the office building last year and now have a programmable thermostat. They also try to do little things around the office – like not using sticky notes and always printing double-sided.

– In the words of their president and owner, Bena Burda, “Maggie’s is small, so there is no single champion or department for environmental education — all employees are involved. And our impact has really spread beyond our 13 employees.”

– As a matter of course, they share their knowledge about environmental practices for apparel production with their partners in Nicaragua as well as U.S.-based manufacturers. And since the apparel industry is under stress, making the business case is becoming an increasingly important motivating factor. As an example, they worked with a sock finisher to switch from chlorine to hydrogen peroxide, and it saved him money.

– According to Burda, the toughest thing is convincing the management of their business partners to listen and to think outside the box. Especially when suppliers are under financial duress, it can be tough to try new methods.

– Their advice for others: Credible third-party information helps make the business case for environmental improvements. Specifically for them, when the Ecology Center included their produce in a Healthy Toy Rating, it was of real interest to one of their larger customers, Whole Foods.

– And finally, they’ve learned that their customers’ comments help, too, because informed customers can stimulate innovative ideas. So they use and suggest a log of customer comments that are regularly sent to all managers.

RESOURCES: Telecommuting Done Right

We tell our clients that there are many green initiatives they can “try out” without a formal policy or program, but that telecommuting is not one of them. In fact, telecommuting is a green initiative that can go very wrong very quickly. But that doesn’t mean it’s not worth pursuing. Today, we look at a recent article that provides some insight into the topic: The Top Ten Strategies For Managers of Mobile Workers: Surviving and Thriving in the Emerging Mobile Workforce, by Terrence L. Gargiulo.

In order to be successful, organizations have always had to keep pace with shifts in competitive advantage. But what constitutes a competitive advantage changes over time. A hundred years ago, for instance, it was economies of scale and manufacturing. Then decades later, it was the managing of information that drove organizational transformation. Today, however, and looking forward, it will be the cultivation of rich relationships that drives success and competitiveness. In essence, employees will create value through interconnected relationships – relationships which need to be capable of synthesizing real-time information to create new products, services, data, or other relationships to respond to emerging market needs.

The extra twist for this competitive necessity, though, is the meteoric rise in mobile workers around the world. According to the IDC, 73% of the U.S. workforce, and 30% of the global workforce will be mobile by the year 2011. And although there are different ways of defining “mobile,” all of them have implications for how managers will nurture the rich relationships critical to remaining competitive. In managing an increasingly mobile workforce, some of the key benefits, challenges, and strategies for success are:

Benefits

Mobile workers can increase your influence and give you access to a broader range of talents, experience, and knowledge – bringing fresh ideas and innovative practices.

With the speed of business today, success as a manager rests on the shoulders of motivated, committed employees, and today’s employees want flexibility.

Mobile workers shift managers’ attention from activities to deliverables, and less time spent overseeing employees’ daily activities means more time to be strategic – a critical shift for successful managers and future competitiveness.

Mobile workers thrive on collaborative relationships, which can lead to a more dynamic style of interaction for managers. When handled well, managers can maintain their authority while also being more collegial. A win-win.

Challenges

A common fear is that mobile workers will be less productive, but as long as people do not abuse the flexibility extended to them, this is likely an irrational fear. Managers of remote workers need to reinvent their jobs – from concrete control and oversight to something less tangible. Re-designing workflows and performance metrics, as well as a healthy dose of patience, will go a long way in smoothing this transition.

Positional power exerts less influence with mobile workers, and good managers will need strong influence skills – a relational ability that depends heavily on trust. The energy and creativity it takes to cultivate trust and influence with remote workers is one of the biggest challenges of leading a mobile workforce.

Information sharing can suffer with fewer face-to-face interactions, but technology can play a powerful role in addressing this challenge.

Strategies for Success

Focus on building relationships. With a mobile workforce, you are now in the business of managing relationships, so prioritize regular and sufficient time to foster strong relationships with your mobile employees.

Consolidate and prioritize communications. Use email, IM, texting, blogging, and threaded discussions for relationship-driven communications (being personal and staying in touch). For important work content, though, assess the communication preferences of you and your team and always make the message clear and comprehensive. Don’t leave anything to assumptions.

Spend more time listening. When you are remote from your workers, it’s tempting to feel the need to convey more and more information – but don’t. Make listening and asking questions a priority, and it will not only create strong relationships, but will likely enhance productivity.

Manage deliverables, not activities. Lots of project work is well-suited to mobile workers, and even more task-driven roles can be effectively managed if broken into deliverables. Realize that many aspects of an employee’s job may need to be adjusted to accommodate a mobile work style.

Engage in more frequent and informal performance management activities. Remember, relationships are the heart of your job, so have ongoing, unstructured dialogs with your mobile workers about their goals and development plans – and try to adjust the style of this to each individual employee.

Give complete trust until a concrete behavioral reason exists not to. Mobile workers thrive when managers give them complete trust, so use trust to create strong relationships and performance.
And finally, leverage technology to support remote workers. Beyond email, IM, and phone, web conferencing will be critical for collaborating on projects in real-time.

Read the full article here.

RESOURCES: The New ISO 26000 Standard for CSR (Part 5)

This series of blog posts looks at the new ISO 26000 standard for corporate social responsibility. In five parts, it summarizes the report, How Material is ISO 26000 Social Responsibility to Small and Medium-sized Enterprises (SMEs)?, written by Oshani Perera in Sept, 2008.

PART V: MAINSTREAMING SOCIAL RESPONSIBILITY: THE WAY FORWARD

This study establishes that ISO 26000 has the potential to introduce the social responsibility agenda to SMEs. However, it also establishes that only a particular profile of SMEs can be expected to join the debate. Further, it indicates that social responsibility practices need to move from mock compliance to a component of mainstream business acumen, and the debate needs to move from “doing-the-right-thing” to a useful way to maintain market position and differentiate from competitors.

It is also important for social responsibility proponents to move from building on the big-business case to experimenting with alternative tools and models to help SMEs develop the right mix of strategies to suit their businesses. Policy makers also need to design market instruments that will reward responsible enterprises.

But perhaps the very first step to bring ISO 26000 Social Responsibility to life is to acknowledge that the sustainable development debate tends to protect itself from the economic realities and linkages in the global economy. In particular:

• At the global level, growth in emerging countries is not substituting for outputs in industrialized countries, but is adding to it—driving down production costs and increasing productivity. This is why multinational companies (except in the banking sector) are still reporting gains, for they are achieving greater economies of scale and maintaining per-unit-cost margins.
• The global economy is focused on supplying to the middle classes in emerging and industrializing countries, and to a great extent their demands have yet to account for environmental and social attributes. We have also yet to realize that the biggest loser in the globalizing world is likely to be the worker, who lies at the very heart of the social responsibility debate. Social responsibility is, after all, about making living conditions more equitable and sustainable for all. And in economically advanced countries, workers are losing their bargaining power to those entering the workforce from poorer countries. This is manifested, not only the loss of jobs in the first world, but in a real decline in wages – for both lower-skilled workers and professionals.

In a similar vein, workers in developing countries have even less bargaining power, as the labor they bring to the global economy is rarely combined with capital. And with capital being increasingly free to move now, the loss of jobs in these countries is even more of a threat than the lowering of wages, as high inflation rates have already ensured that wages remain low. As a direct consequence of these trends, income inequalities are likely to increase even further.

Standards are an important tool in defining and leveling the playing field for more equitable trade and development. But just as they provide incentives for responsible enterprise, they can also be played out as trade barriers, especially vis-à-vis SMEs in industrializing countries that may lack the resources to comply. We need to intensify the debate on how standards can indeed open opportunities for sustainable trade – all along the value chain. For to remain competitive, global value chains are increasingly designed to pass on the costs and responsibilities of compliance to those at the primary tiers of the supply chain. And there is legitimate concern that environmental and social standards may be used as an excuse to consolidate supply chains and drastically reduce the number of supplier units in both developed and developing countries. Suppliers, therefore, who are unable to comply with environmental and social specifications, meet just-in-time schedules, and reduce production costs, are being left out – which will only add to the concentration of profits and expertise in limited pockets of society.

Standards, especially ISO 26000, also need to be flexible in their application to the social and environmental realities of industrializing countries. While we are all aware that there is no one-size-fits-all model, we also need to acknowledge that social responsibility issues cannot be universally interpreted. As much as we work to safeguard and enhance labor standards, we need to do so in a way that promotes flexible and dynamic workforces. As much as we work towards employment for all, we need to look for newer ways to enable job conversion, re-skilling, and up-skilling. And as much as we work to enable decent work and abolish child- and forced-labor, we need to tackle the economic and social realities that create these conditions in the first place.

This study was published in the run up to the development of the ISO 26000 Social Responsibility committee draft. This was necessary to ensure that the survey was conducted on the most recent and integrated draft versions of ISO 26000. IISD looks forward to continued learning and debate on responsible entrepreneurship, focusing on both trickle-down and on bottom-up strategies for sustainable development in the middle of the pyramid.

RESOURCES: The New ISO 26000 Standard for CSR (Part 4)

This series of blog posts looks at the new ISO 26000 standard for corporate social responsibility. In five parts, it summarizes the report, How Material is ISO 26000 Social Responsibility to Small and Medium-sized Enterprises (SMEs)?, written by Oshani Perera in Sept, 2008.

PART IV: RESULTS OF THE SME SURVEY ON ISO 26000 SOCIAL RESPONSIBILITY (cont’d)

ISO 26000, WITH EDITING AND IMPROVED PRESENTATION, HAS THE POTENTIAL TO SERVE AS A COMPREHENSIVE INTRODUCTION TO SOCIAL RESPONSIBILITY
The study suggests that ISO 26000, with substantial improvements in style, language, and layout, can serve as a comprehensive introduction to social responsibility. And despite seeing the need for various improvements, all the respondents agreed the content of the draft, though very global and generic, did provide SMEs with a bigger picture of what social responsibility could entail for all organizations, including SMEs. Many respondents commented that the draft standard goes well beyond the requirements of other social responsibility standards, and were interested to see how the standard would play out in the marketplace.

ISO 26000 IS NOT LIKELY TO SERVE AS A MANAGEMENT TOOL FOR SMES
As much as ISO 26000 provides a comprehensive introduction of the SME debate, 89 percent of the respondents did not see ISO 26000 being used as a management tool by smaller organizations. The main reason for this perspective was that respondents regarded ISO 26000 to be too broad-spectrum and implicit to serve as a resource in operational challenges. The NCPCs commented further that ISO 26000 would need to be repackaged to address national and even sector-specific concerns, if it was to be of wider appeal.

ISO 26000 WILL ONLY ATTRACT A SELECTED PROFILE OF ENTREPRENEURS
All the respondents universally agreed that ISO 26000 will be picked up only by a selected profile of SMEs, namely:
• Those that are looking to export to Europe and North America
• Those that feed into international value chains
• Those whose products/services are inherently linked to environmental and social integrity
• Those that are financed by socially responsible and ethical investors
• Those led by individuals who more deeply appreciate environmental and social opportunities and risks
One comment offered: “ISO 26000 and all standards on these issues are not for everybody.”

SMES DO NOT IDENTIFY WITH JARGON
Over 45 per cent of the SMEs and 60 per cent of the consultants and NCPCs raised the issue of terminology and jargon getting in the way of promoting social responsibility. Interestingly, SMEs do not identify with the terms social responsibility or corporate social responsibility and did not use them internally. Instead, they referred to their social responsibility activities under a variety of other terms, including compliance, client relationships, client audits, client monitoring and external audits. “Social responsibility (or whatever you want to call it) is knowing that my workers represent 215 children under 10 years old. This is about getting the balance right—helping the business grow and helping these children have better opportunities than their parents.” (SME in Malaysia, forestry sector)

THE GENERAL MATERIALITY OF ISO 26000 SOCIAL RESPONSIBILITY
Approximately 90 per cent of the respondents considered the social responsibility principles given in ISO 26000 to be too remote from day-to-day operations to be of value to small organizations.

RESOURCES: The New ISO 26000 Standard for CSR (Part 3)

This series of blog posts looks at the new ISO 26000 standard for corporate social responsibility. In five parts, it summarizes the report, How Material is ISO 26000 Social Responsibility to Small and Medium-sized Enterprises (SMEs)?, written by Oshani Perera in Sept, 2008.

PART III: RESULTS OF THE SME SURVEY ON ISO 26000 SOCIAL RESPONSIBILITY (cont’d)

NETWORKED BUSINESSES ARE BETTER SOCIAL RESPONSIBILITY INCUBATORS
SMEs that are well-networked are likely to have a higher capacity to appreciate and respond to social responsibility challenges. It is well documented that SMEs tend to suffer for a chronic shortage of time to address issues that are beyond immediate operational concern. Indeed, 45 percent of the SMEs interviewed cited a lack of time as a major obstacle in improving social responsibility performance. They report that they have little time either to collate and interpret information, or scan their impacts on stakeholders and the environment. In such cases, it is easy to see how the social responsibility agenda, which requires higher-order learning and mindset changes, can be a harder sell. Consequently, the more networked an SME is—be it through multinational value chains or through local professional and philanthropic networks— the greater its learning and absorptive capacity for the sustainability agenda are likely to be.

THE LACK OF EXPERTISE IS A GREATER HURDLE THAN THE LACK OF TIME
The point made above suggests that time and resources are always going to be a constraint for smaller companies in working around social responsibility. This study also points out, though, that for companies already engaged in social responsibility, the lack of time wasn’t as much of a hurdle as the lack of expertise to make the right decision in the given business context. The interviews with SMEs and NCPCs were especially revealing in that respondents were not concerned with the time spent on implementation, but rather, the time spent on finding out what needed to be done. SMEs appear to lack the expertise to understand the social responsibility agenda, prioritize it within their business interests, and estimate the time and resources required to address them.

FINANCIAL RESOURCE CONSTRAINTS
Forty one per cent of SMEs and 37 per cent of the consultants and NCPCs observed that it was the liquid capital that prevented SMEs from investing in systemic improvements and new technologies that were inherent to social responsibility. These SMEs also viewed the increasing social compliance costs as a constant barrier to improving competitiveness, and suggested that their outputs did not reach the necessary economies-of-scale to justify investments in social and environmental improvement.

On the other hand, 38 per cent of the SMEs and 60 per cent of the consultants and NCPCs suggested that social responsibility-related investments did not present additional cost-burdens, provided that the mix of social responsibility strategies was suited to the firm’s immediate priorities.

SMES’ LACK OF NEGOTIATING POWER ACROSS THE VALUE CHAIN
Research has shown that smaller size often reflects lower negotiating power and lower leverage on market forces (Porter 1980), and this perspective was echoed by almost persons consulted in the survey. Some SMEs went so far as to state that even if they were to demonstrate of strong commitments to social responsibility, market forces were unlikely to reward them. Indeed, several respondents suggested the SMEs are more ethical than multinational firms, but they lack the negotiating and marketing power to demonstrate this commitment and to lobby for rewards for responsible entrepreneurship. Given these realities, as well as the inherent challenges of successfully competing in a global marketplace, it is perhaps no surprise that SMEs feel that social responsibility is an agenda in which mock compliance is the best way forward.

SIZE DOES INFLUENCE THE UPTAKE OF SOCIAL RESPONSIBILITY?
There is wealth of academic and empirical evidence to suggest that larger SMEs are more likely to implement – and gain advantages from – social responsibility improvements, vis-a-vis smaller companies and micro-enterprises. And this study corroborates these findings, given the direct correlation between company size and the higher business profitability ratings provided by the SMEs.

SMES REQUIRE SPECIALIZED SUPPORT SERVICES AND IMPROVED ACCESS TO CREDIT
All the respondents commented that environmental and social responsibility required concerted support, and that the currently available resources were insufficient, sometimes even inappropriate, and that many smaller firms did not even know how to access these support services in the first place. This study identified three areas in which respondents believed more support was needed:

1) Strengthening of the overall fiscal and economic infrastructure to support SME
development and reward proactive companies,
2) Building the capacity and capability of SMEs to recognize social responsibility issues and opportunities, and
3) Improving SME access to financing.

The chambers of commerce interviewed also affirmed that they need to boost their services for SMEs in many areas, including sustainable enterprise. The traditional role of chambers of commerce has been to provide advisory services for business development, but advice on environmental and social issues is still very much viewed as an add-on. The reason offered for this by some of the chambers in the survey was that it was “out of their remit” and they felt that companies did not like to be “preached at.”

RISKS OF “DOING WRONG BY NOT DOING RIGHT”
Over 68 per cent of the NCPCs and consultants were of the view that SMEs did not engage in social responsibility practices because they were afraid of performing poorly and thereby exposing themselves to additional risk.”When you don’t know what to do, and if you are not sure what you are doing is what is needed, it is best to do nothing.” (NCPC, Jordan)

RESOURCES: The New ISO 26000 Standard for CSR (Part 2)

This series of blog posts looks at the new ISO 26000 standard for corporate social responsibility. In five parts, it summarizes the report, How Material is ISO 26000 Social Responsibility to Small and Medium-sized Enterprises (SMEs)?, written by Oshani Perera in Sept, 2008.

PART II: RESULTS OF THE SME SURVEY ON ISO 26000 SOCIAL RESPONSIBILITY

DO STANDARDS FURTHER RESPONSIBLE ENTERPRISE IN SMES?
NCPCs and consultants provided an informative evaluation of how standards were contributing to sustainable enterprise in SMEs. They viewed standards primarily as starter tools to introduce companies to sustainable enterprise. They do not, however, consider standards to be of high value in raising skills, diversifying core product/service offerings, or ensuring legal compliance, which are essential aspects of business longevity.

DO STANDARDS ENCOURAGE MOCK COMPLIANCE?
Even though SMEs are heterogeneous in size and working structure, they appear to operate in a flat management and reporting hierarchy. There appears to be little distinction between the roles of management, ownership, and floor-level responsibility, as functions tend to be flexible and multi-disciplinary. Furthermore, activities for the most part are oriented towards resolving day-to-day problems through informal communication and interpersonal relationships.

In such a setting, social responsibility proponents need to better understand the organizational and motivational subcultures of different SMEs to determine how to best advance social responsibility within them. There is also a need to find methodologies that are differentiated from the more formal ones used by multinational companies, which include codes of conduct, corporate sustainability reports, performance indicators, supplier standards, and performance evaluation audits.

This study reveals that these tools – more often appropriate to large, multinational companies – may be inviting mock compliance by SMEs, rather than a deeper appreciation for sustainable development and the value of action at the level of small, individual enterprises.

SOCIAL RESPONSIBILITY IS DRIVEN BY THE VALUES OF THE OWNER-MANAGER
The personal values of the owner-manager are potentially the key driver of social responsibility practices in SMEs. This view was confirmed by all respondents, including the national chambers of commerce. While the perspectives of employees could make a difference in how social responsibility may be played out in day-to-day activities, direction and decisions appear to be made by the owner-manager alone.

SMES DO NOT APPEAR TO INVEST IN SOCIAL CAPITAL
SMEs operate through a web of interpersonal relationships and therefore, at least in theory, they should be amongst the first to realize the value of investing in social capital. This study, however, reveals the reverse. None of the SMEs interviewed had, or planned to provide, opportunities for continued education, re-skilling or up-skilling to their employees. Bonuses, awards, subsidized housing, meals and childcare were amongst the commonly sighted indicators of a socially conscious employer, but skills-building was not a part of this portfolio.

SMES OFTEN MISS THE BIGGER PICTURE
SME do not appear to have a cradle-to-cradle understanding of the social responsibility agenda, i.e. how the different areas of environmental and social responsibility can combine to bring improvements across the triple-bottom-line—economic, social and environmental—performance. All the SMEs consulted appeared to approach each social responsibility issue as a discrete area of activity. And because these practices were carried out through informal processes, and with little or no performance monitoring, it is perhaps not that surprising that these companies had yet to realize the inter-connectivity across the different aspects of performance.

DO SMES VALUE SOCIAL RESPONSIBILITY AS A BUSINESS STRATEGY?
Approximately 45 per cent of the SMEs were of the view that social responsibility was a matter of ethics and intuition, rather than a strategy to improve business. As one SME in the automobile sector in Slovakia commented, “Social responsibility is about doing the right thing; it is not about improving the company.” However, it is worth noting that at the end of the two consultations, which included some discussion on business issues and the local sustainable development context, over 75 per cent of the SMEs agreed that the right mix of social responsibility strategies could bring business benefits in both the near-and medium-terms.

SMES TEND TO SPECIALIZE IN PARTICULAR SOCIAL RESPONSIBILITY ISSUES
SMEs tend to specialize in particular areas of social responsibility. That is, they tended to focus almost exclusively on one of the following: health and safety, energy and waste management, working hours and overtime, community contributions, or social benefits provision.

RESOURCES: The New ISO 26000 Standard for CSR (Part 1)

This series of blog posts looks at the new ISO 26000 standard for corporate social responsibility. In five parts, it summarizes the report, How Material is ISO 26000 Social Responsibility to Small and Medium-sized Enterprises (SMEs)?, written by Oshani Perera in Sept, 2008.

PART I – THE STUDY TO MEASURE THE MATERIALITY OF ISO 26000

ISO, the International Organization for Standardization, has decided to launch the development of an International Standard providing guidelines for social responsibility (SR) named ISO 26000, or simply ISO SR, and is expected to be released in 2010. The standard offers guidance on socially responsible behavior and possible actions; it does NOT contain requirements and therefore, in contrast to other ISO management system standards, is not certifiable.

Perera’s project maps the materiality of the ISO 26000 Social Responsibility to small and medium-sized enterprises (SMEs) through a global survey of 59 SMEs, 37 social responsibility consultants, and 16 National Cleaner Production Centers across the world. It was commissioned by the Swiss State Secretariat for Economic Affairs (SECO) for the International Institute for Sustainable Development (IISD) to further investigate the underlying reasons why SMEs continue to be missing from the sustainable development agenda, and if and how the ISO 26000 could serve as a catalyst for their greater participation.
SMEs are widely viewed as a challenge in the sustainable development debate. They are seen as standing at its periphery and to be general unconcerned by environmental and social issues—even those inherent to their own businesses. Further, they work in markets affected by a global pattern of supply and demand, which are rendered even more complex by the intervention of governments and skewed trade regulations that favor larger players and special interests. And finally, SMEs also face challenges in getting access to markets in which economies of scale are needed to drive down production and distribution costs, while meeting just-in-time deadlines. Being at the lower end of supply chains, most SMEs have to bear the risks associated with just-in-time delivery, low or no inventories, low lead times, and rising prices of raw and semi-processed materials.

IISD embarked on this project with the understanding that while ISO 26000 may increase awareness, provide definition, and add legitimacy to the social responsibility debate, it may not contain the practical guidance to enable SMEs to implement theory in practice. SMEs are also likely to require external expertise to interpret and implement ISO 26000 in a manner that is best suited to their business context. This inherently presents additional costs that small organizations may find difficult to justify.

IISD suggests proponents of sustainable enterprise may need to first rethink and repackage the agenda to reflect the realities of the global marketplace – in order to facilitate the widespread participation of SMEs. For instance, there is a tendency to consider SMEs as a homogenous group, when in fact they encompass a wide variety of businesses, which have very different reasons for why, how, and how long they seek to be in businesses. In addition, large areas of the sustainable development and corporate responsibility agenda continue to be designed in a manner that overlooks the vitality of small firms in making a considerable impact on local competitiveness. Yet, according to the International Chamber of Commerce, SMEs typically account for 99 per cent or more of all firms in both industrialized in emerging economies.

The methodology for this survey is based on a wide cross section of in-person and telephone consultations with SMEs, National Cleaner Production Centers (NCPCs), leaders of the ISO 26000 processes and option leaders in the SME debate.

The next three posts will map the broad findings of the IISD survey on the materiality of ISO 26000 Social Responsibility for SMEs. In particular, they address the opportunities and obstacles in advancing social responsibility in SMEs. Then the fifth and final post in the series addresses ways in which we might “mainstream” social responsibility – to be more inclusive of SMEs into the future.

VIEWS: SSC at the World Water Forum (Part III)

Dispatch from SSC President Jennifer Woofter

I’m on the flight back home after my trip to Istanbul and the World Water Forum. I’m sure that in the coming week we will hear all about the sessions, working groups, panels, and “key messages” through such excellent sites as Grist and Worldchanging (two of my favorite sustainability news outlets). I’m also sure that others’ analysis will be more insightful and pithy than mine.

But as I Istanbul, what is sticking with me is the disconnect between what *I* know about water and it’s connection with sustainability (even basic societal survival!) and how everyday people think about water. I was asked more than a dozen times by the “average” Istanbul citizen what I was doing in the city, and it often led to a discussion of water. Here’s what I heard:

Taxi Driver – don’t you think this is something that politicians are using to get people riled up? Water is not a problem. Well, maybe in 100 years. But this is not something we should be concerned with today.

Carpet Shop Employee – it’s true that clean water is difficult, but bottled water is so cheap it is not really a problem for me. Maybe it’s more of a problem in the country.

Hotel Employee – this is a problem in Africa, right? Where there is no rain? Here we get lots of rain, so drought is not something we worry about.

I think if you asked people in any major city you would probably hear the same thing: it’s a political “much ado about nothing”, it’s about my own personal access to clean drinking water, or it’s a problem in areas with drought. Very few people seemed to see the larger picture – for instance about water privatization issues, or climate change implications, or even how the price of goods and services will rise as access to clean water becomes more expensive – or impossible to obtain.

As a sustainability consultant, it’s my job to help people understand how a simple-yet-complex issue like water can have real meaning to their lives and their livelihoods. I have to wear many hats – scientist, communicator, accountant, fortuneteller… I have to balance the realities of today with the uncertainties of tomorrow. I have to find the link between the “right thing to do” (e.g. access to clean drinking water for all) and what makes “good business sense” (e.g. let’s make sure our company’s supply chain is water-efficient). It’s complicated and fascinating work – and as I leave Istanbul I’m excited to get back to the SSC office and spend some time reviewing our consulting services to ensure that water concerns are integrated into every part of our analysis and planning engagements.