Reflections on CSR in China

By Wayne Visser

It was a great pleasure for me to be back in China in May this year. On my first visit in 2008, it was shortly after the Sichuan earthquake and one of the fascinating things to see was how Chinese bloggers were publicly ranking (and rankling) companies on their response to the disaster. For me, that represented good news and bad news – good news because it meant that civil society was becoming more active and bad news because it was entrenching a philanthropic understanding of CSR. The other experience I had during that visit, which confirmed my fears, was my role on a judging panel for an MBA competition on CSR, where the project we selected (which involved setting up an e-waste recycling facility) was passed over for a philanthropic project (which involved giving money for setting up a school).

During my more recent visit, a number of things seem to have changed. As my Chinese colleagues kept reminding me, two years is a long time in China. The first thing I noticed is that the country is awash with CSR conferences, workshops and training. So much so that generic meetings no longer pull the crowds. Companies know what CSR is and now they want to know how to implement it. Not surprising then that the CSR reporting trend has finally taken off in China as well. For now, this is seen by many companies as an end in itself – often to satisfy Western critics – rather than a first step on a much longer journey. However, along with the reporting trend, there is at least more talk of Strategic CSR, even though the evidence suggests this is more the exception than the rule. A company like State Grid is among this progressive minority, but most large companies are still stuck in a philanthropic, project-based mode of CSR.

The main drivers for CSR seem to have shifted as well. Whereas before, it was mainly Western pressure through the supply chain, now the two main advocates seem to be the Chinese government and the workers themselves. The government has latched onto the CSR concept and is bedding down many elements in legislation ranging from labour conditions to cleaner production. There are also increasing numbers of protests by workers that are dissatisfied with the status quo. Sam Lee mentions the story that was in the headlines recently of an irregular number of suicides in a particular company, which has added impetus to this growing workers' movement. As China rises as an economic superpower and begins to dominate many industries, there is also far more emphasis on safety and quality of products.

Apart from CSR management, China is investing heavily is in the market opportunities provided by CSR issues, especially clean technology. Already in 2006, the richest man in China was reported to be Shi Shengrong, CEO of the solar company Suntech, and the richest women, Zhang Yin, made her fortune from recycling. A 2010 report published by the Pew Environmental Center found that in 2009, China invested $34.6 billion in the clean energy economy, while the United States only invested $18.6 billion. This explosive growth was brought home to me when, at an event of the Women In Sustainability Action (WISA) in Shanghai where I was speaking, I got talking to a supplier of wind turbines to Europe. Simply put, he cannot keep up with the demand. He is turning customers away because there is already 12 months of orders in the pipeline.

In a related trend, I heard far more on this trip about environmental issues. In fact, visiting CSR scholar at Peking University, Mark Wheling, believes that the green issues are what are getting companies away from philanthropic CSR. World Bank estimates put the cost of environmental and associated health costs in China at 3% of GDP, with water pollution accounting for half of the losses. These costs have not escaped the attention of the Chinese government, who is driving environmental legislation and incentives much more strongly now. Many Chinese talk about the Olympics as some kind of watershed. As you may remember, the government shut down many factories around the city and restricted vehicle access. As result, Beijing enjoyed unprecedented blue skies during the 2008 Olympics. When the Olympics was over and the government prepared to go back to business-as-usual, the public objected – they wanted to keep their blue skies – and so at least some of the pollution control policies remained in force.

So, yes, there have been changes over the past two years, and there has been some movement towards Strategic CSR. However, my overall impression is that most companies still view CSR as a philanthropic and public relations exercise. As Jacyclyn Shi reminds us, CSR awards schemes are booming, which is a sure sign of progress, but also immaturity of the market. Perhaps she is right to place her hope in the women of China to be the new pioneers. There has been no shortage of testosterone-fuelled growth in China – and the world – which remains at the heart of the problem. We could benefit from less male yang, and more female yin, in China and in the CSR movement more generally.

Video: Marjon van Opijnen on CSR Reporting & Supply Chain Practices in Europe

Marjon van Opijnen is a Senior Consultant with the consultancy CREM. In this interview with Dr Wayne Visser, Director of CSR International, she discusses their research on CSR reporting and supply chains for the EU High Level Group on CSR. The interview was conducted in Brussels on 12 May 2010.

Video: Thomas Dodd on EU Policy Development on CSR

Thomas Dodd is a CSR Co-ordinator in the European Commission's Directorate General on Enterprise & Business and serves on the EU High Level Group on CSR. In this interview with Dr Wayne Visser, Director of CSR International, he talks about the challenges of EU policy development on CSR. The interview took place in Brussels on 12 May 2010.

Video: Walter Kahlenborn on CSR in Europe

Walter Kahlenborn is Managing Director of Adelphi, which undertakes research for among others the EU High Level Group on CSR. In this interview with Dr Wayne Visser, Director of CSR International, he gives his views on CSR in Europe. The interview took place on 12 May 2010.

Video: Susan Bird on CSR in the European Union

Susan Bird is CSR Co-ordinator in the DG Employment of the European Commission and part of the EU High Level Group on CSR. In this interview with Dr Wayne Visser, Director of CSR International, she discusses CSR in Europe and the work of the High Level Group on CSR. The interview was conducted in Brussels on 12 May 2010.

Reflections on CSR in the EU

By Wayne Visser

In May, I presented to the EU High Level Group (HLG) of on CSR, comprising of 27 member state representatives. It gave me an opportunity to talk with some of the people helping to shape the EU agenda and there are number of trends I found interesting. The first is that, whereas before CSR was discussed purely as a voluntary activity by business (this was especially clear in the EU’s last policy statement on CSR in 2006), there is now increasing discussion and even demand for what one of the members of the HLG, Susan Bird, calls ‘a more active role’, which may involve ‘conditions’ being introduced in the future, although this is all up for debate.

A second insight is how the competitiveness agenda has changed. The first 10 year economic strategy of the EU – the Lisbon Agenda, which ends in 2010 – was all about competitiveness and paid very little attention to CSR issues. However, the 2008 European Competitiveness Report dedicated an entire chapter to CSR and we have countries like Denmark claiming that responsible and green growth is central to its international reputation and hence its competitiveness. This changing emphasis is also reflected in the new Lisbon Strategy for 2020, which has as its central goal ‘smart, sustainable and inclusive growth’.

The studies being commissioned by the HLG give us some indication of where the direction of policy development is headed. In particular, there are research projects on business and human rights (integrating UN Special Representative John Ruggie’s emerging framework), supply chain integrity, CSR reporting and sustainable and responsible public procurement.

In the supply chain work, Marjon van Opijnen from CREM sees a number of trends, including water footprinting, which reveals that it takes 16,000 litres of water to produce leather products, 2,700 litres to produce a T-Shirt and 2,400 litres to make a hamburger. Palm oil is also high on the agenda, especially focused on how to get small palm oil farmers involved in the RSPO certification process in Indonesia and Malaysia. Another focus is looking at the post-consumer supply chain, such as the e-waste from Europe that ends up in Africa, especially Ghana, where it creates health hazards and environmental challenges.

One area of research that is starting to reveal interesting results is the role of socially responsible investment (SRI) in Europe. For example, Walter Kahlenborn from Adelphi talks about studies they have done in Germany that find German SRI funds with carbon footprints that are no better than non-SRI funds. Survey results also suggest that while inclusion in SRI funds of big companies give legitimacy to their CSR and climate activities, the impact of SRI is limited to those large companies that are included, rather than the broader market. And in Germany, the SRI mutual funds only make up around 0.5% of the total funds, while in companies with SRI investments, these investments only make up around 0.3% of their total investments.

Of course, the HLG faces enormous challenges, highlighted by Thomas Dodd. How can they have a consistent policy for all member states, bridging the leaders like Denmark with the laggards, which tend to be the newer EU members? Another serious challenge, and a big focus of the HLG, is how to make any EU policies on CSR relevant to SMEs, which make up the vast majority of businesses in the EU? Looking to the future, the Responsible Business 2020 project of the European Alliance is worth keeping an eye on. Among the trends that Susan Bird sees is a greater emphasis on social inclusion and more flexible ways of working, especially using ICT technologies to be create innovative workplace practices.

My conclusion is that the sleeping giant of CSR policy in Europe is awakening, so watch this space!

Video: Rodion Kolyshko on CSR in the Ukraine

Rodion Kolyshko is Advisor to the Confederation of Employers in Ukraine. In this interview with Dr Wayne Visser, Director of CSR International, he talks about CSR in Ukraine. The interview took place in Kiev, Ukraine, on 28 April 2010.