The traditional definition of Corporate Social Responsibility (CSR) includes a voluntary approach to meet or exceed stakeholder expectations by integrating social, ethical, and environmental concerns together with the usual measures of revenue, profit, and legal obligation. Since first entering into force in 2003, RoHS and WEEE have catapulted both awareness and action of the environmental concerns portion of traditional CSR.
Seven years later, the social and ethical portions of traditional CSR have finally received their push with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of July, 2010 (the “Conflict Minerals Law”). This federal law is being formally supported at the state level with California’s recent proposed legislation, SB861. If adopted, California SB861 would deny companies procurement contracts with the State of California for failing to meet the requirements of the rules promulgated by the SEC. California’s ground breaking legislation is taking this a step further by actually prohibiting contracts, whereas the federal approach doesn’t prohibit using these conflict minerals, it just exposes companies that source them.
This progression and shift from the emphasis on revenue, profit and legal obligation, to an emphasis on environmental concern, and most recently on social and ethical concerns and responsibilities, reflects the maturing of our supply chains. Following suit, the maturing of extended producer responsibility paradigm from where products are made, to where products are sold and disposed of is now making a natural progression to where substances in products are sourced from and the impact of that sourcing. Shaming companies into doing the right thing by exposing sourcing efforts that are contradictory to social and ethical expectations will increase the demand for socially responsible sourcing methods that we will likely see further instilled with future legislation at both the federal and state level in addition to voluntary actions by leaders in Corporate Social Responsibility who will set this new standard.