10.01.2007 - 10:30am ET

With the stark realities of global warming ever more evident, the public is fixated on finding sustainable ways of living and consuming.

The anxiety is being picked up by leaders keen to be seen to be Doing the Right Thing, their saintly fingers crossed in the hope that it won't hit profits. A new chapter opens in the CSR story.

What do you get if you mix kids, toys, China and lead? A worldwide news story, for one thing, as the US toy company Mattel discovered to its cost this August. More than 18 million toys, including 'Sarge' trucks and Thomas the Tank Engine models, were recalled after the discovery that lead paint had been applied to some of them by Mattel's Chinese supplier. In the process, a veil was lifted from the reality of the manufacturing process in the Pearl River delta, in southern China - now the heart of the world's toy-making industry, where hundreds of thousands of young people, mostly women, split their lives between cramped dormitories and choking factories, where they churn out the cheap toys in which most American homes are drowning. Cheap toys mean cheap labour.

The Mattel case also illuminates the dynamics at work in the current chapter of the story of corporate social responsibility (CSR). Companies increasingly rely on supply chains that stretch around the globe, and are being held to account for the whole chain, rather than just the few links that they directly manage.

At the same time, the issues that excite the attention of consumers are of an increasingly international nature. In the Mattel case, the trigger was, of course, the safety of the children playing with the toys rather than that of the adolescents making them - but the story has now developed its own momentum, and the working conditions in China now figure in the consciousness of Western consumers, if perhaps not yet their conscience. Lastly, the Mattel mix-up showed the global outlook of the media: on the face of it, only the US and China were involved, but in practice the story ran in every market where parents buy toys for their kids.

This triple connectivity - of companies, issues and media - is the backdrop against which corporations are now obliged to operate, and to demonstrate that they are doing so responsibly. The combined power of concerned consumers and scandal-hungry global media outlets makes the market a volatile place. 'This is the third chapter of the corporate social responsibility movement,' says Seb Beloe, vice-president of research and advocacy at SustainAbility, a UK think-tank specialising in CSR issues. 'The pressure is now coming from the market - from retailers, customers and investors. There is now real economic value at stake.'



Click here to continue...