Fortune China CSR
Fortune China, special edition on corporate social responsibility - unofficial summary translations in English
Fortune China published a special edition on corporate social responsibility in August 2006. The original is in Chinese. The following summaries of key points from some of the articles are provided by Business & Human Rights Resource Centre:
- "What change will CSR bring?", editor's introduction
- "CSR: a marriage between companies and stakeholders", Guo Peiyuan, socially responsible investment specialist
"What change will CSR bring?", editor's introduction
Businesses are becoming more aware that fulfilling corporate responsibility is not only to meet the expectations of stakeholders, but also a means and an opportunity to fulfil the corporate mission and vision. Not only are multinational corporations becoming responsible, so are local Chinese companies such as Vanke. It has “corporate citizenship” as part of its 10-year plan. Regarding safety and environmental challenges, even a major oil company such as CNPC took some action by committing itself to SA8000 compliance.
This issue of Fortune China has interviewed a number of corporations about implementation of corporate accountability measures, including:
- BP: says “corporate responsibility is not just charity but more about being a successful and sustainable business”; initiatives include reduction of carbon dioxide emissions, alternative recyclable energy, Employee Matching Fund on charitable causes and Green Education Project in China
- L’Oréal: winner of Prestigious Global Business Coalition on HIV/AIDS Award, sponsored Chinese Young Women in Science, reduced water consumption by almost 50% in factories and recycled 90% of waste materials
- IBM: collaboration with Palace Museum to build an interactive real-time information and guiding platform, which is considered as an education project
- Intel: emphasis on engagement of staff in Intel Volunteer Matching Grant Program, focussing on environmental protection and education projects
- Bayer: implemented measures to turn wastewater into usable water; sponsored public health, poverty reduction, science education, special Olympics and AIDS prevention projects.
Leaders among local Chinese companies include:
- Vanke: “Change Agent, Corporate Citizen” as slogan, environmental protection and energy-saving measures in all new development projects
- Lenovo: organized yearly charity day gathering donations in excess of 60 million yuan going to SARS patients and tsunami relief effort
- Haier: sponsored education and poverty reduction projects
"CSR: a marriage between companies and stakeholders", Guo Peiyuan, socially responsible investment specialist
In this article, Guo Peiyuan introduces the concept of CSR by the Triple Bottom Line theory first advocated by John Elkington, i.e. economic, social and environmental bottom lines that are measurements for accountability not just to shareholders, but also stakeholders. Guo stresses that the endeavour to protect stakeholder interests is in fact in line with business interests. He quotes the World Resource Institute findings that by 2015 car companies with petrol-consumption reduction initiatives such as Toyota, Nissan and Honda are projected to have a 2-12% revenue increase, in contrast to traditional car makers General Motors and Ford which may see a 5% dip.
Guo says stakeholder interests are not always at odds with shareholder interests. He quotes the example of Hewlett Packard’s teaming up with NGOs and environmental groups in its Dragon Recycling Project which has seen much reduction in material costs. He notes that examples in local Chinese companies are common too, e.g. Leshan Yongfeng Paper Products in Sichuan has encouraged community development by transforming agricultural land through re-forestation and purchasing bamboo sheets from villagers with a protected price.
Yet Guo admits that CSR has its challenges in China. First, it is a relatively new concept which attracts much misunderstanding and thus resistance. Second, companies lack the experience in, and proper assistance for, implementation. Many have simply turned to the traditional notion of CSR being philanthropic donations. Third, the continuous engagement of stakeholders is vital and sometimes difficult to achieve.