Lead the way

The Ministry of Commerce has released a corporate social responsibility (CSR) draft guideline for government, multinational companies, academic leaders and related federations, to better guide them in shouldering social responsibilities in China.

This is the first time that China's central government has released the CSR guideline for multinational companies. It represents a golden opportunity for them to participate in public programs, such as charities, supporting schools, cultural activities and environmental efforts, while also remaining profitable, according to an industry observer.

Furthermore, it is a first step for China to build up a CSR system using the guideline for multinational companies that operate in the Chinese market, says Norwell Coquillard, chairman of American Chamber of Commerce in Shanghai. It will help achieve a balanced growth between business and social benefits and environmental protection, says Coquillard.

The draft guideline asks multinational companies to comply with regulations and laws, public ethics and commercial convention, as well as trade rules.

In addition, corporations should make better efforts to meet the demands of their domestic partners and improve business performance and strengthen the sustainability of corporate development under the conditions of legal and trust-oriented management and a sound market economy, it says.

They ought to give top priority to protecting the legal rights of the employees, building a calm and stable working relationship, promoting work safety and guaranteeing employees' safety and health.

Meanwhile, multinational companies are urged to participate in social public welfare programs and strengthen resource conservation and environmental protection works. They should lead in energy savings and emissions reduction. They should also upgrade their technology and equipment, and promote a recycling economy.

"All of these measures among the local governments, enterprises, and the communities, will contribute to China's ongoing program of building a harmonious society," says Wang Zhile, director of the research center for transnational corporations under the Ministry of Commerce.

He adds that these measures will better help multinational companies involve themselves in China's fast-growing development.

In the modern market economy, corporations are exercising greater influence on society and people's daily lives, and playing a greater role in economic and social development, says Wang. Corporations are the creators of material wealth while at the same time having a direct impact on various fields, such as science, technology, education, culture, and environment. It has become a universal expectation and requirement that corporations should shoulder more social responsibilities, he adds.

"In China, CSR should contribute to the country's sustainable development, for both the economy and the society," says Wang.

According to a CSR report made by Christopher C. Pinney, director of executive education for the Boston College Center for Corporate Citizenship, in the last 30 years the rapid economic development of underdeveloped countries has also brought severe environmental and social problems. CSR has been increasingly seen by the public as a partial solution to this problem, says Wang.

The issue has received wider international attention since the beginning of this century, when China has drawn considerable attention concerning its sustainable development.

Therefore, fulfilling CSR is not only the mission and responsibility of multinational companies, but also an expectation and requirement of the public, says the report.

"Multinationals should introduce some international and professional experiences to China. At the same time, they should lead research to make CSR work in China," notes Pinney.

In addition, "CSR promotion will be helpful for the companies' business operations. It should not be a burden," Coquillard points out.

He says embedding the concepts and requirements of CSR into companies' business strategies, operations and corporate cultures will help inject vitality and creativity in the enterprises, add value to their brands and images, improve their staff qualifications and enhance the cohesion of the companies.

(China Daily 09/22/2008 page8)