Putting CSR into practice is goal of more Chinese companies

Many people assert that fulfilling corporate social responsibility (CSR) obligations is merely a matter of donating money or engaging in philanthropy. There are people who even paraphrase it as a way to "pay to get rid of a disturbance".

But open donations are not the only means to grant enterprises the "honor label" in society. In fact, fulfilling CSR obligations should not be measured by the monetary value of donations.

An American management scientist described the social responsibility an enterprise should undertake as a pyramid. The base of the pyramid represents economic responsibility, which is the normal operational activities enterprises bring forth to generate profits.

The upper part is the legal responsibility, meaning that companies have to comply with various laws and regulations.

The next layer stands for the ethical responsibility of the enterprise. Finally, the spire represents the charity responsibility, which denotes a proportion of revenues that a company can allocate freely in a specific field.

Viewed in this light, the basic social responsibility lies in managing the company well and creating wealth for society on the premise of abiding by laws and ethics.

There is a Chinese saying that earning 1,000 yuan a day is superior to owning a great deal of treasure.

A healthy and sustainable business can create value in the community and also afford its employees more opportunities.

Additionally, this kind of business is able to provide ongoing development for suppliers and retailers, offer customers qualified products and services, pay taxes and improve the quality of life in the community.

However, there are enterprises - especially small, privately owned ones - that are confronted with diverse problems.

Problems that should be tackled at the base of the pyramid include non-standard labor contracts, poor working conditions, work overloads, counterfeit and shoddy products, environmental contamination and wasted resources.

Since the base is vulnerable, what is the point of discussing social responsibilities?

Protecting workers

One of the major corporate social responsibilities is to ensure the safety of the workers. However, severe industrial accidents reveal that, more often than not, many privately owned enterprises fail to carry out this commitment.

In terms of production safety, BP (British Petroleum) begins each meeting, whether internal or customer-oriented, with a three-minute or five-minute introduction on health, safety and environmental issues. This happens at BP headquarters and its branch operations.

There is an office graph in each conference room clearly illustrating the emergency exit and the best escape route. A receptionist points out the information contained in the graph to whoever attends the conference.

Additionally, BP has devoted a great sum of money in the areas of ethical operation, environmental preservation and philanthropy. But it has to be emphasized that the company develops its social responsibility by taking the first step in worker safety.

Hu Chengzhong, CEO and board chairman of Delixi Group (a Wenzhou-based private company engaged in the manufacturing of electric power transmission and distribution appliances), repeatedly emphasized in his book, Wealth and Responsibility, that: "Creating wealth is one responsibility, whereas using it is another."

Ethical, responsible

To be rich, ethical and responsible, to pay close attention to people's livelihood, and to share with the community the wealth gained from these actions -- these are what form social responsibility that can lead to harmonious development of both enterprises and society.

There is no denying that environmental problems have been exacerbated in the recent century. Phenomena such as land desertification, global warming, depletion of the ozone layer and decreasing biodiversity are putting human development into question.

Hence, more enterprises are undertaking the duty to preserve the environment. It is foreseen that environmental protection will remain the core of corporate social responsibility for quite a long time.

In terms of privately owned enterprises, the major problem is how to take action, rather than focusing just on whether the responsibility should be taken.

"What distinguishes a great company from a good one?" asked the CEO of Ford Motor Co.

"A good company can provide customers with outstanding products and services, while a great company not only has the capacity to fulfill this goal, but also spares no effort in beautifying the world," Bill Ford said.

The ultimate goal of a company should be to make it a great enterprise. To engage in certain social responsibilities is a positive goal for a company that envisions itself as a long-term success.

The author is deputy dean of Lingnan (University) College at Sun Yat-sen University and director of the Research Center for Corporate Social Responsibility at Lingnan College.

(China Daily 11/09/2009 page10)