Does Corporate Social Responsibility (CSR) play a role in your outsourcing decisions? Of course! Here’s why.
As befits its role as a professional association, IAOP constantly monitors key developments in global outsourcing. Accordingly, for the last four years, the IAOP ’s Advocacy and Outreach Committee has operated a subcommittee focused on Corporate Social Responsibility (CSR).
What is CSR? The new international standard providing guidance on CSR, ISO 26000, addresses human rights, labor practices, the environment, fair operating practices, consumer issues, community involvement and development, as well as the organization’s governance of its activities in these areas.
The CSR subcommittee within IAOP has taken steps to understand and shape the role of CSR in outsourcing. During outsourcing’s infancy, CSR was neither understood nor embraced by outsourcing providers or buyers. This is changing.
The mandate of the CSR subcommittee is as follows:
The Corporate Social Responsibility (CSR) sub-committee is chartered with identifying and promoting discussion among IAOP members on how outsourcing can be used as a powerful tool for advancing critical social, economic, and environmental issues on a global basis. Additionally, it examines corporate socially responsible policies and practices for outsourcing, including identifying and showcasing policies that our membership have adopted, creating a framework for companies to model new CSR policies, and developing a network of resources for members
At the 2011 Outsourcing World Summit, IAOP Chair Michael Corbett asked approximately 700 delegates to respond to a real-time poll: “Is CSR a factor in your outsourcing decision?” The answer from 80% of respondents was, to varying degrees, Yes (specifically, Always, Frequently, Sometimes):
Prior to the Summit, IAOP conducted an e-mail survey of its 110,000 members, and the results were almost identical, with 79% responding with Yes (Always, Frequently, Sometimes), with a similar distribution. The survey was conducted in late 2010.
Contrast these 2011 results with the CSR subcommittee’s 2009 survey. Approximately 170 IAOP members took part in this survey. These results were reviewed at the 2010 IAOP Outsourcing World Summit and at the 2009 IAOP European Outsourcing Summit. The 2009 survey found that only 62% of outsourcing customers reported making CSR a factor in their outsourcing decisions:
Not applicable 1%
Without a doubt, there is today a strong adoption of CSR in outsourcing. In particular, respondents who answered “Always” almost quadrupled, from 8% to 31% in just the past two years.
In anticipation of this sea change, the CSR subcommittee has been working to develop a CSR Guide for the outsourcing industry. The guide, which is projected to be available later in 2011, relies on global standards such as ISO 26000, the Global Reporting Initiative and the Carbon Disclosure Project, and will provide guidance for the outsourcing community.
Contributions to the Guide come from industry practitioners, academic researchers, and expert advisors. The subcommittee is chaired by Michael Corbett (IAOP). Scott Philips (Accenture) serves as Special Advisor to the subcommittee, and contributing members include Bill Hefley (ITSqc and the University of Pittsburgh), Ron Babin (Ryerson University), Jorge Muxica (Applied Materials) and many others. The subcommittee is coordinated by Pam O’Dell (IAOP).
Excerpt from the forthcoming IAOP CSR Guide
CSR and sustainability continue to grow as important business issues. The Global Reporting Initiative (GRI) has tabulated the number of corporate reports on CSR/sustainability since 1999. This data provides a surrogate that represents the growing global interest and importance that organizations place on CSR and sustainability.
Socially Responsible Outsourcing (SRO) is defined as an outsourcing model that “operates strategically to yield social benefits in addition to its traditional commercial revenues,” according to Jeremy Hockenstein, CEO of Digital Divide Data (DDD). Typically, an SRO firm will be located in a marginalized region and will employ people from a disadvantaged population, for example uneducated women in India or Africa. SRO is a specific application of CSR in outsourcing. The concept of SRO is closely related to the use of Information and communications technologies (ICT) for developing nations, sometimes referred to as ICT4D. As well, rural-sourcing, where outsource providers locate delivery centers in rural North America, is a form of SRO.
It is difficult to imagine that some outsource providers would not yet embrace sustainability as an organizational program and market requirement. We fully expect that early stage outsource providers will begin to report within the GRI format, moving beyond corporate sustainability brochures, and will entertain preliminary CDP evaluations. As well, now that ISO26000 is finalized, many leading firms will embrace that standard as a formalization of their early sustainability actions. Perhaps in time the ISO26000 standard will become as important to the industry as CMM and standards on quality and security such as ISO9000 and BS5750. This standard will require early stage providers to establish a formal sustainability program and protocol within the organization, moving beyond a marketing and communication approach.
Our advice to buyers and providers of outsourcing services is to evaluate and adopt CSR and sustainability standards such as Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP), the UN Global Compact and ISO26000. Leading outsourcing providers have already done this, often with the encouragement of their customers and employees.