Business / Economy

Giving back moves into fashion with major firms

By LYU CHANG (China Daily) Updated: 2014-12-24 11:25

Study shows how more companies are getting involved in social causes

Top companies are expanding their corporate social responsibility activities, particularly those involving the environment and pollution, according to a survey.

It shows that 200 of China's top 500 organizations say they are both actively creating CSR projects, and taking on more practical roles in society, rather than simply donating money.

"Successful CSR is a lot broader than just philanthropy. It is about how a company can make money and at the same time meet the needs of society, using its operations and products," said Xiao Hongjun, an associate professor at the Institute of Industrial Economics, part of the Chinese Academy of Social Sciences, who helped compile the report.

"Although CSR is still relatively obscure in China, I think more companies have become a lot more savvy on what's expected."

Xiao's report shows that there is a rising number of Chinese companies publishing CSR reports, promoting their philanthropy in the media, and setting up offices dedicated to CSR activity. But less than five years ago, few companies in China made any public mention of CSR, he said.

China National Petroleum Corp, for instance, now publishes sustainable development reports on its operations in Kazakhstan, Sudan and Indonesia, and that electronics giant Huawei Technologies Co Ltd has released an individual CSR report covering its operations in North America.

Xiao said that it is just a matter of time before CSR becomes a key element in evaluating a company's performance, given the growing number of social and environmental challenges that must be addressed in China to maintain what is considered sustainable growth.

Water scarcity, air pollution, labor conditions, and product safety are all listed as targets in China's 12th Five-Year Plan (2011-15).

One of the report's key findings, Xiao said, is that State-owned enterprises appear to be well ahead of private companies in their CSR transparency and in implementing specific CSR strategies.

Wang Xiaoguang, director of the Beijing Rongzhi Corporate Social Responsibility Institute, said that one of the reasons is that SOEs feel under greater public pressure to meet the changing needs of society.

One subject that is highlighted particularly is the widening gap between the rich and the poor.

"The State-owned companies are turning to CSR in response to public criticism on other issues too, such as the environment, improvements to living conditions and health."

The expanding presence overseas by SOEs has also driven many more down the CSR path, Wang said, as in many markets around the world it is good for reputation and brand image to have a visible CSR policy in place.

Wang Chengbo, director of advisory services at Business for Social Responsibility, said that mining companies in particular have a vested interest in knowing more about the people and the communities in which they work, and developing a comprehensive CSR program, or programs, has allowed many to do that.

"Deals are negotiated with governments or industry peers, but long-term success requires social acceptance and trust as well," he said.

The report also highlighted, interestingly, that listed companies with faster profit growth were among the less active in CSR activities.

"We found that CSR is generally considered as philanthropy by high growth-oriented companies, which it appears would prefer to use profit to increase production," Xiao said.

Despite the recent progress, however, the report concluded that China still has a long way to go to build what might be considered a healthy CSR environment.

But it said that once enterprises start to notice the genuine benefits gained from CSR programs-such as improved efficiency, and a rise in the quality of local employees-more will become actively involved, as many foreign multinationals already are.

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