Social Dimension of Sustainability in CSR Standards

Available online at www.sciencedirect.com

ScienceDirect Procedia Manufacturing 3 (2015) 4800 – 4807

6th International Conference on Applied Human Factors and Ergonomics (AHFE 2015) and the Affiliated Conferences, AHFE 2015

Social dimension of sustainability in CSR standards Marek Szczuka* Poznan University of Technology, Faculty of Engineering Management, ul. Strzelecka 11, 60-965 3R]QDĔ3RODQG

Abstract Sustainable development is a part of strategy of modern company. The idea of this conception establishes business activity due to social, environment and economic benefits. Sustainable rules point ways of exploring natural resources satisfying human needs and enabling business activity and its uninterrupted development. In purpose of realization sustainable development assumptions conception called corporate social responsibility was elaborated. With its help companies can describe best practices targeted on management operations on these human units, which take part in realized processes and those, on who these processes have influence. CSR idea concerns company community, as also external stakeholders. In terms of enterprise conception affects creating relations with employees, level of confidence building and implementing voluntary actions such as allowing personal growth and proving timely and proportional to qualifications remuneration. To a group of the most important regulations belong Social Accountability 8000, The Account Ability Stakeholder Engagement Standard and ISO 26000. Paper purpose is to distinguish these best practices being used by activity businesses for internal and external stakeholders. Relations of responsible management in the context of their level of reference to standards taken into account. Analysed practices concern aspects such as workplace, employee practices, employee rights, management and staff governance and rely to period from 2003 to 2012 year. Mentioned features have source in industries of logistics, fuel, energetic, sales and services. © 2015 2015 The B.V. This is an open access article under the CC BY-NC-ND license © The Authors. Authors.Published PublishedbybyElsevier Elsevier B.V. (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of AHFE Conference. Peer-review under responsibility of AHFE Conference

Keywords: Sustainable development; Corporate social responsibility; CSR best practices; CSR standards

* Corresponding author. Tel.: +48725671601. E-mail address: [email protected]

2351-9789 © 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of AHFE Conference doi:10.1016/j.promfg.2015.07.587

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1. Introduction Sustainability development definition is the object of researches and long-term discussion. Definition comes under constant changes for last 30 years. Determinants of that process are new interpretations, which are based on economic, ecological and social aspects. Important factor is also new methodology of phenomenon observation and its dimensions harmonization.[14] Sustainable developments is about integrating the goals of a high quality of life, health and prosperity with social justice and maintaining the earth’s capacity to support life in all its diversity. [8, 15] Sustainability development in macro interpretation mean etic conception referring to poverty and environment security. Economy model based on sustainability assumes appropriate and conscious relations forming between economy growth, environment and life standards. Sustainability development in business activity is treated as micro approach and is called corporate sustainability.[6] Business sustainability can be defined as the adoption of business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future.[11] Purpose of the article is to present the mechanism of analysis best practices in terms of corporate social responsibility. This research will be based on a set of practices implemented in companies performing in following branches; logistics, transport, trading, services, fuel and energetic. These practices apply to social aspect in business activity such as employee rights, organisation order, workplace, share market, local community and business management. Article consists of theoretical and empirical parts. Theoretic field concerns definitions of sustainability development, corporate social responsibility and CSR standards. Research part pertains best practices analysis using own model procedure. 2. Corporate Social Responsibility as a company reaction for sustainability challenges Corporate sustainability and social responsibility definitions are often use interchangeably. CSR conception is concentrated on concrete company and constitutes some philosophy and set of tools helping sustainability state achieving. That state may guarantee long time growth of company value. Corporate responsibility looks for synergy in economy, environmental and social areas. That approach may be define with 3P rule, which means People-PlanetProfit. [9] Impossible is to define CSR subject in a clear way, because of its multifaceted character. One of most known explanation define CSR as “behaviour accepted by business stakeholders and being a conscious result of activities, which are desire by local community. This definition nominate stakeholders as the most important component of the conception and specify their behaviour as moral and etic. Idea assumes not only company strategy filling, but also suggests social activities to provide material profits for the company. [17] Important is to mention that several organisations and institutions undertook attempt to interpret corporate social responsibility definition. To this group of subjects belong ISO Institution, United Nations Development Programme, World Business Council for Sustainable Development and European Commission. Lack of cohesion and clear needs about CSR causes chaos, however review of table 1 helps to identify common elements, such as integrated approach to sustainability aspects, social growth approach and Cooperation with stakeholders. [3] CSR means operating a business to practice ethical behaviour, build local communities and social infrastructure. [10] Success of CSR conception implementation is conditioned by level of social confidence. Higher level of confidence means a chance of cooperation between stakeholders and business activity. CSR assumptions implementation brings profits for company surroundings satisfying their needs. It helps to build friendly social climate, which promote sustainability development. Company, which supports CSR builds its value by using fact, that people rather buy products, which are produced by companies with good opinion. To support companies in CSR assumptions implementation and building relations with stakeholders special standards have been elaborated. [7, 22]

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3. Standards CSR Guidance for managers wanting to adopt CSR exists or is emerging in the form of various voluntary management standards ISO 26000, Social Accountability standard SA 8000 and AccountAbility 1000. ISO 26000 is a standards elaborated in 2010 year and currently is the most important norms in the business world. It refers to almost all organisations independently from their size, location and national economy. It isn’t restricted only to CSR. In this norm organisations are described as social responsible and their activities may have influence on competitive advantage, reputation, investor’s opinion, employee acquisition ability and their morale and engagement. ISO 26000 is one of three documents recommended by European Commission for European enterprises in social responsibility implementation. Main assumptions includes sustainability development, society healthcare, stakeholder’s expectations and are consistent with local law and international norms of proceedings. [5] ISO 26000 project marks out following fields of social responsibility; organisation order, human rights, customer relations, social commitment. Norm isn’t a technical standard, but a set of guidelines, that cannot be certified. It takes into account terms bind with social responsibility, their trends, fundaments and basic areas that is should be responsible. [12] Next standard is Social Accountability 8000. This standard describes requirements of social responsibility necessary to meet and being verified in independent and external evaluation system. Main reference are indicators for employee and human rights, but also human factor management. Standards formulates eight preliminary conditions, which are required to allow company entering to the last condition. Final phase of standard procedure is strategy forming based on social responsibility. Standard usage means company declaration to fulfil basic indicators, such as non adult employing, work forcing, overtime working, safety working rules discrimination, disciplinary punishment and wages. [16] Indicators above concerns basic aspects of human rights and constitute fundaments of social responsibility implementation. Last standard is international norm AccountAbility1000. Its main function is creating relations, guiding communication and stakeholder’s engagement to increase company’s value. Additional aspects are providing improvements and risk management including local environment consciousness. These conditions bring operational and strategic approach guidelines. [18, 19] Key hint is organisational responsibility understood as it clear recognition and acceptance. Business activity declares to engage their stakeholders in sustainability issues, their observation and reporting. Standard AA1000SES – Stakeholder Engagement takes into account engagement local community and describes three areas that proclaim about high quality applying way of engagement commitment, creating path to full integration in company’s strategy, scheme of engagement interested units and aim, range and interested units definition.[1] 4. Best practices in CSR Best practices conducted within Corporate Social Responsibility are unsolicited and are not governed by law. These practices describe purposes of activity, which are presented in dedicated standards, such as ISO 26000, AA1000 and SA8000. These norms apply to following areas of the company; organisation order, human and employee rights, environment, fair business activities, customer relations and local commitment. Aim of practices is striving for sustainability development including its basic assumptions. Practices should also include needs and be consistent to business activities. [2, 19] Main role in ecological purposes realisation play ecologic awareness and attitude of directorate. Best practices usage is being seen as a way of improving competiveness. That’s why they are identified as a source of potential economic chances. Actions for society and environment can bring indirect advantages. Air pollution reduction, natural capital saving and customer satisfaction growth are examples of these actions. [13] Researches being performed in this article will use information about best CSR practices described on www.odpowiedzialnybiznes.pl webpage. Site contains a base of CSR practices, which was implemented in companies from several branches. Criterions of branch choices are based on number of companies and number of practices available for each branch. Practices concerns business activities working in following branches: logistics, transport, trading, services, fuel industry and energetics. Criterion of practice choice its influence on one of set indicators from the following group; workplace, employee rights, engagement and local society development,

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management and organisation order. Chosen practices have been implemented between 2003 and 2013 year. Table 1 consist of general information about chosen practices. To proper characterization chosen practices implemented in polish companies, special criterions of description are needed. Process their designation it based on practice life cycle. Usage this determinant requires general stages of practice implementation recognition. As the source component a group of decision-makers is defined. This group of people always give the impulse to provide action. Next stage is tied with stakeholders, who are the main purpose of each practice. Decision-makers have to define aims, range and tools needed to realise each task. Penultimate stage is practice recurrence. Practice durability is identified as the last stage of practice life cycle. Table 1. Best practices selected in range of researches. Own elaboration. Year

Company

2002 2003 2004 2005

ABB ABB BP Polska DHL

2005 2009 2006 2007

Schenker 3 wings Tesco BP Polska

2004 2005 2007

3M Poland ABB Metro Goup

2011 2011 2012

Capgemini Grupa Allegro Grupa Raben

2011 2013 2012 2013 2013

Job Impulse Polska Carrefour GAZ-System PM Experts DB Schenker

2005 2009 2005

Profes Grupa Lotos DB Schenker

Branch

Good practise Working Place Energetics Social responsibility politic monitoring Energetics Etic council Raw materials and fuels Guidelines on safe exploitation of transport fleet Transport and logistics Ecologic citizen Sharemarket Transport and logistics Social report Energetics Fair market practices and relationships with business partners Trading Ecology Raw materials and fuels Code of behaviour Society Trading Green week Energetics Enterprise and self - presentation Trading My scholarship Employee Aspects Services CLIC Continuous Language Improvement Trading Employee guide Transport and logistics Week with CSR Human Rights Services Yes for disabled employees Trading Diversity politics Energetics Help for school pupils Services “Two chairs” program for nongovernment organisations Transport and logistics Steel logistics for “Steel package” Management Services Consolidating key values among stakeholders Raw materials and fuels Social responsibility report Transport and logistics Relation improving program with suppliers and contractors

4.1. Parametric diagram of best CSR practices model First step of creating parametric diagram of CSR practices is wisely election of practices that was implemented in restricted list of branches, included social aspect and took place between 2003 and 2013. Next step of researches is practise characterization due to four aspects that together create practise life cycle. These aspects are: decision-makers, stakeholders, practice recurrence and durability (table 2). Table 2. Table containing aspects consisting on practice life cycle. Own elaboration. Best practice 1

a2 a3 a4 a5

Decision-makers b1 b2 b1 b3 b4

Stakeholders c1 c2 c1 c4 c3

Recurrence d3 d2 d1 d3 d1

Durability e1 e2 e3 e3 e1

Table 2 includes procedure creating characterization best CSR practices. Each practice is described by life cycle aspects. Each aspect is featured with a variant of answer available from a group of answers. Final stage is a percentage juxtaposition, which is based on pie chart. To get necessary data to create it, some calculations have to be made.

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In this purpose all data from table 2 have to be converted in percentage values using below pattern: , Assuming that: x x – variant of answer from the set of available answers, x s – number of available answers, x P – Percentage value of each answer against all available answers. Table 3. Table of percentage values available variants for each practise life cycle variant. Table based on table 2. Best practise variant 1 variant 2 variant 3 variant 4

Decision-makers 40% 20% 20% 20%

Stakeholders 40% 20% 20% 20%

Practise recurrence 40% 20% 40% 0%

Practise durability 40% 20% 20% 20%

Last action needed is to convert percentage values in angular amount, due to following pattern: , Assuming that: x x n – percentage value each variant of answer (value brought to fraction), x A – Angular amount (in degrees). 4.2. Diagram of practices life cycle Important is to interpret below diagram in correct order. Graphical method can be compare to blooming flower. In first stage there is only a bud, which transform into a plant important for ecosystem. Situation is similar in case of diagram. Decision-makers are the bud, which defines aim and range of practice. Final effect is an influence on local (social) environment. Schema is based on model presented earlier. Source of information is description chosen practices. Figure 1 presents characterization chosen practices in range of research issue. Variants each criterions are shown as circular sections. Their size is proportional to its percentage value against all available variant of answers. Starting point is middle of the diagram. Initiation factor is a group of decision-makers, which the biggest part refers to management and administration group of employees. Rest of initial subjects are internal and external expert groups, but also cooperation with other companies. Next stage of best practice performing is its stakeholder’s definition. Analysis proofs that local environment and company’s internal and external stakeholders are the most often groups of interests. Penultimate stage is cycle of practise recurrence definition. Single, period and continuous practices have similar values. Last action is practices durability describing. In range of chosen practices most of them have permanent and period durability. Important is to mention that period practices mean that they last more than single practices and less than permanent. Elaborated model concerns creating diagram describing social aspect of best CSR practices compared with rules and aims included in CSR standards definitions. First stage of method is contents identification (ix). These contents ensue from description about chosen best CSR practices. Description are available online on website www.odpowiedzialnybiznes.pl. Next step is proper classification these information and their unification. Information unification means matching aim and range each practice to description ISO 26000 norm and AA1000 and SA8000 standards. Unification let divided data on information applying to social aspect and other. In this part term guideline means an information about norm or standard that arise from its official definition. Model of that action is presented in table 4.

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Fig. 1. Diagram of characterization chosen practices in terms of their life cycle. Own elaboration. Table 4 Model of practice information unification. Own elaboration. Best practices

Norm/standard guidelines (i x ) and content about chosen practices (i xy )

a1 a2 an

i1 i 11 i 12 i 1n

i2 i 22 i 2n

i3 i 31 i 3n

Basing on the table 4 (example) possible is to claim that for guideline i 1 all three practices (a 1 , a 2 , a n ) have reference; for guideline i 2 only practices a 2 and a n have reference and for guidelines i 3 and i 4 only practices a 1 and a n have reference. Important is to mention that this review should be perform for each practice in reference with ISO 26000, AA1000 and SA8000 standards.

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Fig. 2. Example of diagram as a result of model procedures. Own elaboration.

Fig. 3. Diagram including relations between chosen practices to CSR guidelines of ISO 26000, AA1000 and SA8000.

Last part is to prepare graph for each standard including guidelines after unification and number of best practices with reference to them. Important part of the graph is its division according to kind of aspect. Because of range of the article restricted to social aspect this division includes social factors and other. Following graph (Fig. 3) is based on model above. It describes proportion of social aspect included in choses practices against ISO 26000 norm and AA1000 and SA8000 standards. Graph includes general guidelines, which consist of unified data about chosen practices. Figure 3 shows elaborated results about percentage proportions of social aspect based on information about chosen practices. Its key parameter is social aspect included in practices and its relations to general guidelines. The biggest proportion of social aspect is visible in relation with ISO 26000 norm. Most of CSR actions in chosen practices defines to local environment satisfaction with the highest priority. That criterion has the biggest value of all available values. In case of AA1000 and SA8000 standards most of sustainable actions don’t have reference to social aspect. Research shows also that chosen practices refers to aspect other than social in similar wages. 5. Conclusions Sustainability development is considered as a doctrine, which assumes appropriate producing and consumption, what should be the key action to keep proper natural capital for future generation. Corporate Social Responsibility is believed as a response from economy sector for sustainability assumptions. CSR idea is an important part of business activity in range of sustainability actions. Conception is directed for

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companies by promoting voluntary activities for defined society groups and to save environment. Social Responsibility is a chance for business innovations and building competitive advantage. This chance includes opportunity to rise after economy crisis using fair practices, respect for stakeholders, making strategic decisions and etic behaviour. Companies wanted to achieve permanent development should treat CSR as a part of strategy. Awareness of company’s presence in local environment is important. Performing business actions possible ecological effects should be included. [20, 21] Performed researches let to ascertain, that chosen practices in Poland concern social aspect defined mostly by ISO 26000 norm. Reviews proofs that one third practices don’t have reference to AA1000 and SA8000 standards. Fact that polish companies don’t use these standards may be interpret as low level of knowledge or confidence due them. Because of that ISO 26000 norm can be treated by polish entrepreneurs as the most important guideline.

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