ISOs, SMEs and SDGs

With the development of the UN’s Sustainable Development Goals (SDGs) comes the challenge of implementing and executing these goals. The International Organization for Standardization (ISO) is an independent, international NGO with a membership of 163 national standards bodies and over 250 technical committees. ISO has published over 21,700 International Standards (ISs) and related documents that support innovation and provide solutions to global industry challenges.

ISO recognizes the need to have ISs specifically geared towards sustainability and social responsibility. While they have produced standards that directly address these issues (ISO 37101 – Sustainable development in communitiesISO 26000 – Guidance on social responsibility, ISO 20400 – Sustainable procurement, ISO 20121 – Sustainable events), it is important to note that other ISs support various aspects of sustainability and Corporate Social Responsibility (CSR). A common perception is that ISs are only for big business and government, however, small to medium sized enterprises (SMEs) can benefit from the implementation and maintenance of ISs and quality management systems (QMS).

Cost of Quality:

“Cost of Quality” (CoQ) refers to the costs associated with the prevention, detection and removal of defects from products and/or services. It includes two main components: the cost of good quality (conformance) and the cost of poor quality (non-conformance).

Many of these incurred costs can be hidden and difficult to identify with only small portion being readily evident. However, there is a huge potential for reducing the seemingly hidden costs. Identifying and improving these costs can significantly reduce the costs of doing business and make a direct contribution to profits.

There are four main types of quality costs:

  • Prevention costs: costs incurred to prevent or minimize the number of defects. These are associated with the design, implementation, and maintenance of the QMS and include the improvement of processes, worker training, supplier evaluation, new product review.
  • Appraisal costs: costs associated with measuring and monitoring activities used to identify defective products before they are shipped to customers. These include costs associated with quality checks and other activities that are performed during manufacturing, field testing and audits of products, processes or services.
  • Internal failure costs: costs incurred to remove defects from the products or services before they are delivered to customers. These costs occur when the results of work fail to reach design quality standards but are detected before delivery to the customer. These can include cost of rework, rejected products, product shortages, and downtime.
  • External failure costs: costs that occur when noncompliant products or services are not detected until after they are delivered to the customer. These costs can include warranties, repairs, replacements, complaints, damage to an organization’s reputation, lost sales, and payment for damages arising from the use of defective products.

International Standards:

The ISO 9000 family (Quality management) addresses various aspects of QMS. It’s most popular standard, ISO 9001, outlines the criteria for QMS and has over one million certified companies and organizations in over 170 countries. ISO 9001 is used as a basis for several other ISO standards in various sectors and industries including ISO 14001 – Environmental managementISO 17582 – Electoral organizations at all levels of governmentISO 13485 – Medical devices, and ISO/IEC 90003 – Software engineering, to name a few.

The current version of this standard (ISO 9001:2015) is built around 7 Quality Management Principles which include customer focus, leadership, engagement of people, process approach, improvement, evidence-based decision-making, and relationship management. These are principles that can be applied to organizations of any size, sector or industry.

There are several ISs that may be of interest to organizations looking to implement CSR initiatives. The ISO 14000 family (Environmental management systems) provides tools for organizations looking for guidance on managing their environmental responsibilities and supports many SDGs including SDG 13 (Climate Action), SDG 6 (Clean Water and Sanitation), and SDG 12 (Responsible Consumption and Production). ISO/DIS 21001 (Educational organizations – Management systems for educational organizations) is currently being developed in support of SDG 4 (Quality Education). ISO 37001 (Anti-bribery management systems) specifies requirements and provides guidance for implementing and maintaining an anti-bribery management system. It supports multiple SDGs including SDG 1 (No Poverty), SDG 10 (Reduced Inequalities), SDG 8 (Decent Work and Economic Growth), and SDG 17 (Peace, Justice and Strong Institutions).

ISO 26000: Guidance on social responsibility can also be used by organizations looking for guidance on how to operate in a socially responsible way. This IS addresses 7 core subjects of social responsibility including organizational governance, human rights, labour practices, the environment, fair operating practices, consumer issues, and community involvement and development. Unlike the other IS mentioned above, ISO 26000 is not a management system standard and, therefore, it cannot be used for certification.

ISO recognizes that SMEs tend to be challenged with limited technical, financial and human resources capacity. As such, they have created several handbooks aimed at helping SMEs and other organizations that want to incorporate one or more ISs as part of their CSR initiatives into their business operations and corporate cultures. Through implementation of ISO International Standards and other QMS, SMEs can build customer confidence into their products and/or services, meet regulation requirements at a lower cost, reduce costs across all aspects of their business, and facilitate international trade. These activities bring structure to an SME’s focus on corporate responsibility while also supporting the UN’s SDGs.

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