|August 17, 2006|
The rise of Corporate Responsibility in China
|Guangzou, China - US based Business for Social Responsibility (BSR), a global organization that helps member companies achieve success in ways that respect ethical values, people, communities and the environment, has published an interesting series of articles by various writers in its Summer 2006 Newsletter (The View from the Middle Kingdom) which sheds light on the emergence of a CSR movement in China. |
According to an article prepared by Doug Guthrie, New York University, Stern School of Business, and published in the BSR's summer 2006 edition of Leading Perspectives, China is becoming a hotbed for the convergence of corporate social responsibility (CSR) and development issues. Home to the largest export-oriented labour force in the world, China is the second largest consumer of oil and the largest consumer of coal. It also possesses a relatively weak regulatory environment. These factors taken together are of increasing importance to the world's environment and social culture.
Compared to Western countries, Guthrie points out, Chinese companies have developed rapidly and recently under very different social and economic conditions. In modern Western countries, the emergence of corporate social responsibility (CSR) did not emerge from enlightened self interest of corporations. Rather, it required individual citizens and civil society organizations to take an active and participatory role in pushing the agenda.
China, however, lacks a strong voice from its citizens and civil society; so under these conditions, and many have questioned whether CSR could work in China?
Zhou Weidong, a BSR staff writer answers this question in an article entitled "Will CSR Work in China. He notes that during the mid-1990s, Chinese exposure to CSR came from foreign multinational corporations mainly in the consumer goods and retail sectors that began auditing Chinese factories. Chinese enterprises passively accepted some of these foreign CSR requirements. At this time, the government, public, media and domestic Chinese enterprises had little exposure to the topic.
In the period 2000-2004, it was evident that Chinese suppliers felt increasingly burdened by excessive and often duplicative auditing efforts and demands. Also of importance during this period was the fact that several government departments began to pay closer attention to CSR.
Their overriding concern was that international organizations and multinational corporations might seek to link trade and labour conditions. Some government departments were especially concerned that improving CSR practices would increase the cost of exports.
As more Chinese government departments, business associations and trade groups conduct their own research on CSR, interest in the subject has broadened beyond export processing companies to include domestic oriented, state-owned enterprises (SOEs).
China's attitude towards CSR has also shifted from a passive approach (i.e. fearing economic sanctions and trade barriers) to an active and participatory approach. Today, even the Chinese government is playing an active role in CSR and is beginning to see it as a way to improve Chinese corporate competitiveness.
What to Expect Next
Based on China's short history with modern CSR, there are some trends identified worth noting that will likely impact all businesses in the years ahead: