Corporate Social Responsibility and the Supply Chain

By: Timothy Murray, MURRAY, HOGUE & LANNIS

Corporate social responsibility (CSR) is an amorphous concept that defies simple explanation. At its heart, CSR is a philosophy that a business entity has certain societal obligations beyond the bottom line of its owners—obligations to be a good citizen.

IT IS AN ACKNOWLEDGEMENT THAT THERE ARE stakeholders aside from the business entity’s owners, including employees, local communities, and society at large, that are affected by the business entity’s decisions. In essence, it is a form of corporate self-regulation, pursuant to which a company voluntarily agrees to carry out and monitor its business in a manner designed to ensure it is and remains in compliance with certain ethical standards and norms, which often involve social and environmental obligations and ethical labor practices. CSR standards often extend beyond what is required by applicable law and may also entail philanthropic and charitable activities.

CSR traditionally has been practiced by business entities via self-regulation, pursuant to which companies voluntarily engaged in practices that promoted CSR. The practice of voluntary CSR self-regulation is changing now, as laws have been enacted that mandate compliance with various CSR-related matters, as described below. It is therefore important for counsel to be conversant about concepts related to CSR since such issues are playing increasingly important roles in the operations of business clients.

Common CSR Concepts

A commonly discussed CSR concept is sustainability. A 1987 United Nations report defined sustainable development as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Sustainability must balance often-competing interests. The effort to promote sustainability must make economic sense for the company both in terms of capital investments by the company and costs to the consumer. It must also meet the customer’s quality demands. CLICK HERE TO SIGN UP FOR A FREE TRIAL TO GET ACCESS TO THE FULL ARTICLE.