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Monday, May 13, 2013

Strategic CSR - Distributors

While we have done a better job within the CSR community of holding firms responsible for their supply chain, there is much less discussion about distribution. But, if we are going to say a firm is responsible for actions taken by firms that precede it in the supply chain, why are we not willing to say the same about actions taken by firms that come after it?
This does not diminish the good work done in terms of lifecycle pricing and the post-consumption obligations of the business to consumer relationship. In fact, it is all part of the same discussion—it is all a matter of where to put the emphasis. In particular, I have not heard any discussion of responsibilities further up the distribution chain for businesses.
This issue emerged in a discussion I had with a colleague recently while we were talking about the mining industry. Why are extraction firms not held accountable for subsequent uses of the raw materials they take out of the ground? While there has been some discussion of conflict diamonds/minerals, responsibility for the supply chain appears to rest with the firm that sells the finished product, rather than the firm that sold the component parts. Take e-waste, for example—Why are we willing to hold a firm like Dell responsible for recycling those parts of the computer that are toxic (precious metals and minerals), but not the firm that was responsible for extracting those metals and minerals and selling them to Dell (and others)?
This is an issue that has yet to emerge for extraction companies, but it is not difficult to imagine a day when that happens. If we want to hold GAP, Nike, and Walmart responsible for the actions of other firms far removed from them closer to source, we will one day surely hold extraction firms responsible for the actions of other firms and consumers closer to consumption.

Given this, the progressive extraction company that is sensitive to the relationships it has with its stakeholders, broadly defined, will act now to get ahead of this issue and prevent the future risk to business that it could well become (see: A Rational Argument for CSR, p16).
Take care
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