By Sean Gilbert (China Daily)
Updated: 2008-01-24 16:03

Discussions in boardrooms worldwide focus on the question of how to map out a better corporate strategy for China.

The answer, many executives are finding, is to build an environmentally and socially sound business model that will drive future growth for the business and support clean and equitable development for the country.

Why would a company take such an approach? There are many reasons. Companies that can prove themselves as ethical and "green" alternatives to their competitors can hope to shore-up demand for their products and services, and attract talent to their firms. This is true not least of all in the domestic Chinese market.

In a study of 3,000 graduates in the United Kingdom, the United States and China done this year by PricewaterhouseCoopers, 87 percent of the Chinese respondents said that they would actively seek out employers whose sense of corporate responsibility reflects their own ethics and values.

While in another study from 2006, TNS, an international market research firm, found that 91 percent of Chinese consumers said that they would be more likely to refrain from buying a product if a company failed to follow environmental and ethical standards.

Although the promise of green and ethical entrepreneurship is gaining an audience among Chinese business leaders, adequate audit systems for developing an environmental and ethical business have only recently started to be adopted.

The first step a company can take toward building a more responsible business is to prepare a sustainability report. Such reports are voluntary and function as in-house audit on environmental and ethical practices.

Through the process of compiling such reports, companies can measure their impact in several areas including their use of natural resources and the way their business impacts society.

Reporting can help a company take stock of the sustainability of its operations as well as for its products and services. Success in the triple bottom line requires addressing both these areas.

Sustainability reports can later be used as a tool to establish a better business model by starting internal processes that lead to cutting waste, improving relations with company stakeholders, such as employees, consumers and the government as well as identifying new business opportunities that take advantage of the growing market for sustainable business solutions which is growing in China.

Automakers, for example, are hedging their bets that China will be a leading future market for small, hybrid cars that pollute less and use alternative fuels.

Last year, Toyota together with its local partner the China FAW group started selling its fuel-efficient Prius model in China. While Chinese car-makers including Chery, Chang'an and SAIC as well as global manufacturers such as GM, Ford, Buick and Volkswagen plan to launch their own hybrid models.

China is already the second largest car market in the world, now the world's biggest automakers expect that it will also soon become the leading market for cleaner cars.

This could help address the challenges of air pollution and increasing energy demands from China's growing fleets of cars. It could also lower prices of hybrid car models globally which could shake up the auto industry worldwide.

   1 2   

   1 2