social responsibility in China
happens when businesses are driven not just by maximizing profits
for their shareholders, but also by benefiting the wider community
and environment in which they operate? Sparks fly. Amazing feats
are achieved in local communities, factories, businesses, and
past quarter of a century has seen Western businesses investing
heavily in China, all striving to adapt their business models
to this huge market, while bringing capital, technology and management
know-how to the country.
China is probably more integrated into the international community
than at any point in its history, and the competitive economic
landscape is changing rapidly. For multinational companies that
take social and environmental responsibilities seriously, unprecedented
opportunities abound for them to turn the corporate social responsibility
(CSR) fad into a real opportunity for social change.
wishing to sponsor community engagement projects will find no
shortage of suitable candidates. For instance, IBM has pumped
tens of millions of US dollars into learning centres at Chinese
kindergartens, schools and universities, supplemented by teacher
and scholar training programs.
Group, an international firm that manages luxury-serviced apartments,
has opted to help pupils in Guangxi, in collaboration with World
Vision, by donating funds to provide immunizations and nutritional
lunches for more than 400 children. The company also contributed
funding to renovate the school kids' dormitories, which are drafty
and often require students to share bunks, sometimes with up to
three students in each.
firms take a more hands-on approach to strengthening local charitable
initiatives. Take the UPS Global Volunteerism Week. It has become
a company norm to allow employees time off to undertake volunteer
work in the community. During the volunteering week employees
go out of the office and donate their time to help non-governmental
organizations in their community activities such as painting,
helping the elderly, and organizing auctions or in-kind donations.
is uncomplicated for those who see corporate social responsibility
as a philanthropic pursuit. Yet an increasing number of business
and civil leaders tend to differentiate corporate citizenship
from philanthropy. More attention has been focused on integrating
corporate social responsibility practices into business objectives
and, above all, redefining the role of a company in society and
a founding signatory to the Wolfsburg Principles on anti-money
laundering for international private banks, HSBC implements comprehensive
anti-money laundering standards across its entire business line.
The firm uses careful identification procedures for opening accounts,
close monitoring of transactions and a worldwide network of control
officers for tracking and reporting. In addition, the company
conducts money laundering awareness programs for every new member
of staff and refresher training courses where relevant.
than 1,020 Chinese teenagers would not have been able to make
their entrepreneurship dreams come true without Boeing China's
support for the Junior Achievement business plan programme. Mentored
by volunteer consultants from the business community, these young
entrepreneurs developed their business ideas, and organized and
operated actual business ventures. They also had a chance to participate
in programs that cultivated leadership, team spirit and interpersonal
skills. "As a member of China's community, Boeing's support
is a gift to the children in China, because they carry forward
the hope and future of this great country," said Boeing China
President David Wang.
1999, Microsoft China has provided nearly 4.5 million yuan (US$542,000)
to support computer skills training projects for laid-off and
migrant workers in Liaoning, Sichuan, Guangdong and Shanghai.
is committed to addressing the digital divide issue," said
David Kay, deputy general manager of Microsoft China, "because
we believe, as a technology company, our combined resources -
including products, technologies, solutions and cash grants -
can be most effectively utilized in tackling this issue."
company's recently launched Unlimited Potential grant programme
is intended to further transform community centres that currently
provide only basic access to technology into a technology-enabled
centre for learning and collaboration.
things are relatively straightforward for multinational corporations
following a consistent code of conduct directed by the parent
company, the situation gets far more complex for those companies
that outsource manufacturing in China so as to cut costs. This
is the area that has attracted the attention of the media and
since the Western public outcry in the 1990s about sweatshops
in Asia operated by big foreign firms, labour compliance has become
a permanent reality in corporate boardrooms. Stephen Frost, a
research fellow at the Southeast Asia Centre of the City University
of Hong Kong and chief editor of CSR Asia magazine, is a long-term
observer of the changing environment.
recalled that in the mid-1990s footwear manufacturers like Nike
and Reebok started to issue global codes of conduct to ensure
their suppliers complied with certain standards, such as not hiring
children or recruiting prison labour, no gender discrimination,
no harassment of workers, and so forth.
whole idea was the brands asked the suppliers to comply, and they
checked by inspections," explained Frost. "But later
on, when the audit-based approach was found to be ineffective,
the big firms turned to engage with the factory management together
to deal with the problems."
initiated occupational health safety training courses for its
workforce and Reebok created a female workers' welfare programme.
and Target offered labour rights education programs to owners
and managers of hundreds of small Chinese enterprises.
partnership with academic and non-governmental organizations,
a consortium of export-processing companies including Ford Motor,
Gap, HP, Liz Claiborne, Pfizer, MeadWestvaco, Motorola and Target
recently launched a standing programme in China called Global
Supplier Institute. Following a "beyond audit" strategy,
the consortium will be offering training programs on management,
health and safety, and HIV/AIDS, amongst other compliance curricula.
leading United States retailer is taking these efforts a step
further. May Department Stores, which owns retailers such as Hecht's,
Lord & Taylor and Marshall Field's, has recently awarded 36
Chinese migrant women workers scholarships for degree education.
This innovative empowerment scheme for female workers is believed
to be the first of its kind in the country.
corporate social responsibility initiatives to be successful,
a number of factors must come together, including strong partnerships,
communication, core values and policy engagement.
business and civil leaders believe that the most important contribution
corporations can make to society is through the way they run their
is the basis of our CSR approach," said Mark Spears, Director
of International Labour Standards for the Walt Disney Company.
"We work together with a variety of stake-holders, including
investors, other companies, licencees, suppliers, academic, civil
society members and government agencies, as each of them contributes
a vital perspective to the process."
collaboration is expected to leverage resources, skills, competencies,
technology and networks, thereby maximizing social impact.
Asia Foundation has been an active convener facilitating multi-stake-holder
dialogues and peer learning opportunities. In a forthcoming workshop
on labour law enforcement, the Foundation will bring together
about 70 representatives of multinational corporations, Chinese
officials, academics, and non-governmental organization leaders.
we had a successful inaugural workshop in 2003, there's been growing
interest for such a cross-sector forum where numerous initiatives
get brokered and announced," said Allen Choate, vice-president
of The Asia Foundation. "It's critical to have an ongoing
vehicle for dialogues among CSR stake-holders."
design and funding will not ensure a successful corporate social
responsibility project. It must be efficiently implemented and
need to make the whole process transparent," noted Horace
Ling, chief marketing manager of World Vision. "I can never
emphasize enough on-going communication."
is risky to underestimate interest in pro-social schemes. When
Ling first issued a customized newsletter, he put about 100 names
on the list, but more than 500 people signed up. The newsletter
circulation has now reached 2,500 every quarter.
communications are just as important. "You do need to encourage
employees to actively participate in the socially responsible
initiatives, as nobody personifies your commitment to the local
community better than them," said John Hong, senior corporate
affairs manager of Microsoft China.
their efforts, create conditions for their participation, and
make it part of your corporate culture."
in the Box, a community engagement project initiated by Bayer
China, is a vivid example of how a company carries its tradition
and culture in socially responsible campaigns. The company donates
footballs and kits to children in impoverished regions, helping
them to organize teams.
AG was founded in a remote area of Germany in the 1860s, and in
the early days the company established sports clubs to help retain
employees. Today, there are 29 clubs for Bayer employees in Germany
and some have become professional clubs in the high-profile National
the soccer boxes help bring to the community our core culture,"
explained William Valentino, Bayer's corporate communications
manager in Greater China. "It also helps spread our values,
which is all about fair competition, teamwork, and education for
ensure corporate social responsibility programs address practical
problems that the government cares about and will endorse, there
has to be an alignment with government priorities.
Global Business Coalition on HIV/AIDS has been a leader in just
such a successful alignment. With more than 180 leading international
businesses, the coalition's membership represents a workforce
of nearly four million in 178 countries.
coalition recently launched an unprecedented joint action plan
with the Chinese Ministry of Health to battle the HIV/AIDS pandemic.
prevent and control HIV/AIDS is not only the obligation of the
Chinese Government, but also the common responsibility of the
entire society including the business sector," Vice-Premier
Wu Yi was quoted as saying by People's Daily, at the joint summit.
She promised the government will update laws and regulations,
increase financial input and ensure free treatment and care for
Furst, vice-chair of the American Chamber of Commerce in China,
is a proponent of the corporate sector's engagement in the policy
dialogue. "The businesses need to be aware of the policy
implications of what they are doing. Otherwise, CSR would likely
remain a micro response to macro issues," he said.
added that multinational corporations sometimes have different
political values than the local government where they operate,
and thus effective cross-cultural communication is needed.
explains, in part, why local expertise is so vital in any policy
research or advocacy activities. The Asia Foundation, for instance,
worked with the Development Research Centre of the State Council
in a research project on foreign direct investment in China. The
partnership helped yield some inspiring fact-finding and policy
recommendations for this heated subject.
considerations and caveats
the positive scorecard on corporate social responsibility activities
and achievements worldwide, and business executives' passion for
social issues, the matter does not go without criticism.
there is a debate about the voluntary nature of social responsibility.
The sceptical say corporate social responsibility is by default
not designed to replace regulations, but to complement them. Enforcement
difficulties may become an obstacle.
the counter argument maintains corporate social responsibility
is important where regulations are not in place or insufficiently
enforced. As legal instruments evolve, there needs to be a better
integration of voluntary approaches and laws or government regulations.
while nobody questions the likelihood of a company suffering in
the long run if it profits while inflicting harm on the community,
the upside of pro-social investment is hard to quantify.
that do have such schemes in place have yet to find a good measure
of their return on investment.
firms, where multinationals source, are still expected to deliver
price-competitive manufacturing while at the same time sharing
the costs of pro-social measures. Operational cost increases become
a target of complaint.
suppliers have to meet very stringent standards in terms of workplace
conditions before they are able to bid for outsourced manufacturing.
come concerns about expanding and sustaining corporate social
responsibility programs. How should firms make sure schemes are
not one-off projects, and will be sustained after a company stops
providing financial and other support?
of the solution might be empowerment - understanding the needs
of local partners and beneficiaries, and focusing on building
their capacity and capability, rather than creating dependence.
there is still a long way to go before all the innovative inroads
turn into sustainable development, trends in pro-social projects
in China are extremely positive.
movement has created a new era of public-private co-operation
that is benefiting communities throughout the country, and leading
to more socially responsible organizations throughout the world.