Opportunities for eco-friendly growth

By Raymond Zhou(China Daily)

"There is no sustainable world without a sustainable China." This was the refrain at yesterday afternoon's CEO Roundtable in Beijing.

The 23rd such event, this particular China Daily CEO Roundtable focused on the visions, opportunities and challenges of sustainable development in China's 11th Five-Year Plan. Around 60 senior executives and government officials took part in the meeting, held in the Kerry Centre.

Those who participated shared their views on how to make China's rapid economic growth more friendly to the environment.

"We live in a world increasingly shaped by sustainable growth issues," said Bjorn Stigson, president of the World Business Council for Sustainable Development (WBCSD), an organization representing some 190 of the world's leading corporations.

There is a strong need for awareness, and the media is playing a fundamental role, said Stigson. Issues such as biodiversity, carbon emissions, land use and energy efficiency are increasingly on the Chinese Government's agenda. Multinational corporations need to share their experiences with their Chinese colleagues and learn from each other, he said.

Georg Fronja, senior vice-president of Siemens China, Communications Mobile Networks, asked about the "political framework" and the "punishment" for those who endanger sustainable growth. "The social cost is borne by all of society," he noted.

Yang Fu, director general of the State Administration of Work Safety, responded that the Chinese government has placed an emphasis on work safety. "Not only is it an economic issue, but it is a social issue as it concerns people's lives and property."

Yang said the Chinese Government has set specific targets for the 11th Five-Year Plan: industrial accidents will be reduced by 35 per cent between 2005 and 2010, and mine accidents by 25 per cent. It is the first time such targets have been included in government planning.

From a broader perspective, energy consumption per unit of GDP will be reduced by 20 per cent; water consumption will be reduced by 30 per cent for each 10,000 yuan worth of industrial value-added products and major pollutant emissions by 10 per cent, said Alexander Wan, a China Daily manager who chaired the event, quoting from a government document.

One industry mentioned by Stigson of WBCSD was cement. China produces half of the world's output of cement, he said, and for one tonne of cement there is also one tonne of CO2. "Reducing pollution will make corporations more efficient and therefore more profitable," he said.

Peter Wong, a consultant for Deloitte Touche Tohmatsu in Hong Kong, raised the question of cross-border pollution. "Borders cannot prevent pollution," he said. "No one can deal with the issue in isolation. The mental attitude in Hong Kong has to change.

Another issue was the preservation of historic buildings. Wong cited the example of Pingyao, where historic buildings are about to be "converted into a Disney-like park." He lamented the insufficiency of efforts on the part of the government to protect this heritage and hoped the corporate world could "champion the cause" so that people will see long-term returns.

Combined efforts

Stigson of WBCSD observed that, for sustainable growth to work, market mechanisms and government regulations have to go hand in hand. Those who do good work should receive incentives while those who lag behind should be dealt with. Regulations must be enforced. One area where regulations should focus, he said, is energy consumption for buildings; currently 90 per cent of them in China are not efficient.

"The technology is available, but it has to be used," commented Peter Leupp, chairman and president of ABB (China). The way to increase implementation is by "incentive," he said, "and the tariff system does support that."

There is a reason why some of these problems exist, added Peter Wong. Because energy supplies are unreliable, every business and organization buys its own generators and usually buys the cheapest, which are inefficient.

Nobody will admit to any wrongdoing, but such behaviour must change. Businesses need to be prepared to pay a little more for a cleaner environment and there should be incentives for them to do so.

William Valentino, general manager of Bayer, corporate communications, Greater China, praised the Chinese government "harmonious society" policy but said that resources should be channelled into specific areas, and words made into action. Corporations, for their part, should see it as an issue of building "integrity, branding and trust." "Companies must work together with civil society" so that the country can maintain rapid growth while at the same time factor in social costs. He specifically mentioned the private sector where help is needed and foreign businesses can offer solutions.

Jiang Weimin, an officer with the China Business Council for Sustainable Development (CBCSD), emphasized the importance of "engaging stakeholders". Since the Chinese Government is the biggest stakeholder in the Chinese business sector, it must work with the government and iron out a "reward and punishment system." For corporations, this provides a chance to gain a "competitive edge," he said. "If you don't catch the train, your competitor will."

Ren Bingyan, vice-president of ALCOA China, said his company is "actively applying principles of sustainable development." It not only concerns economic viability, but also environmental viability. Areas that ALCOA has "high standards" in include energy and water consumption, the discharge of waste and a safe working environment.

Chris Chan, public affairs director for Dow Chemical (Greater China), pointed out the significance of "engaging small and medium-sized enterprises (SMEs) because generally big corporations are "doing a good job" in sustainable growth but SMEs do not have the resources nor the awareness.

His company has a partnership with the State Administration of Work Safety to work on the details.

Ron Nielsen of Alcan Inc raised the question of making the issue relevant at the individual level. The individuals' role is big, he said. There is a need for "enhancing competence and individual innovation" and corporations must provide support and make it concrete and manageable."

The Chinese Government has set targets for resource efficiency such as recycling and they are serious about these aims, said Stigson of WBCSD.

"If this is the case, the government needs to utilize different drives and incentives. There should be a combination of incentives and disciplines."

But Stigson cautioned that when it comes to SMEs "no country has got it 100 per cent right, and no country has a golden solution." But corporations can always share their positive experiences with the rest of the world.

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