Environmental protection, poverty relief, and education - not issues normally associated with businesses.

But behind gleaming company towers, rising turnover and booming profits is another phenomenon - voluntary or forced - quietly taking shape on the Chinese mainland: corporate social responsibility, or CSR.

Many multinationals and leading domestic companies are taking part in various social causes; most say that they are just being responsible corporate citizens and do not expect any returns from charity.

But what are the percentages for bottom-line-watching entities to loosen their purse strings?

They want a harmonious relationship with the society they are part of and seek sustainable growth, say experts.

The first thing to understand about corporate social responsibility is that the business case is very strong, says Michael Rake, international chairman of accounting and consulting giant KPMG, at a World Economic Forum summit.

"The first thing people need to understand around corporate social responsibility is that the business case is very strong. If you look at any survey, all other things being equal (such as price and quality), the consumer will buy from the company that has a responsible attitude towards its community.

"In recruitment, people want to work for a company with a responsible social attitude.

"Business needs the community in which it operates and a company can play major role in that community There is a clear moral case in corporate social responsibility and the business case is very strong. What is important now, given recent corporate scandals, is that companies must be seen to be doing it and not just talking about it. There is a danger that corporate social responsibility is seen a smokescreen for greed and profit."

According to Wu Changqi, vice-dean of Guanghua School of Management which is affiliated with Beijing University, responsible corporate citizens, in addition to paying taxes and making donations, should protect and conserve the environment, provide job opportunities in the local economy, guarantee employees' safety and welfare, as well as contribute to the local social network.

As the country hurtles along on a high-growth path, demands on social security and welfare as well as the education system are growing - and placing an increasing burden on State coffers.

One source of funding which can ease the strain on government and make full use of companies strengths, knowledge and skills is corporate philanthropy, say experts.

According to sources from the China Charity Federation (CCF), 12 government-authorized charities received donations to the tune of 5 billion yuan (US$617 million) last year - 0.05 per cent of the nation's gross domestic product. The comparative figures for the United States and Britain are 2.17 and 0.88 per cent respectively.

Of course, leading Western companies with long histories are likely to be associated with philanthropy because the tradition exists, but Chinese companies are still getting their feet wet.

Several multinationals are putting their money where their heart are.

Antony Burgmans, chairman of global consumer-goods manufacturer Unilever, says: "As a truly multi-local multinational, Unilever will continue to play its part as a modern citizen of China by hastening localization as well as training more local managers and professionals."

P&G, another consumer-goods giant, has collaborated with a string of domestic and foreign leading retailers, including Home World, Price-Mart, Tesco-Hymall and Suguo, on the Chinese mainland - when a consumer buys a P&G product in one of thse supermarkets, 1 US cent will be donated to Project Hope, a programme helping primary education in rural areas.

But Chinese corporate giants do not have high-profile missions, or communication strategies.

CCF statistics shows that there are over 13 million registered companies in China, fewer than 100,000 make donations.

As Edward Tse, managing director of Booz Allen Hamilton for China, said at a recent China Daily CEO Roundtable on CSR, Chinese companies have always been socially responsible, but "for different reasons" and usually in a narrow sense.

They tend to focus on employees rather than the bigger community. As Chinese companies expand overseas, they'll have to realize that there is a set of universal values that corporations should observe.

But some big domestic brands, including PetroChina, Sinopec, China Netcom and China Telecom, are making progress in that direction.

According to the 2005 China Corporate Givers List released by Hurun Report in April, the top 50 companies comprise 24 State-owned, 22 multinationals and four private enterprises - which donated 1.36 billion yuan (US$198 million) in cash in the last two years.

Heading the list is Indonesia-based paper maker APP with a 200-million-yuan (US$25 million) contribution and Taiwan-based Foxconn Group follows as a combination of 69.9 million yuan (US$8.6 million), while PetroChina is ranked third with 68.5 million yuan (US$7.6 million).

So what can be done to keep up the good work?

Yang Tuan, director of the social policy research office attached to the Chinese Academy of Social Sciences, suggests that the government offer more incentives to corporations.

Currently, companies donating to the 12 government-approved foundations enjoy tax breaks.

If a corporation's charity in a year makes up less than 3 per cent of its annual income tax, the donated money will be not be taxed. The figure in most developed nations stands 50 per cent.

When a corporation contributes money to rural compulsory-education programmes, such as Project Hope and Spring Bud Programme, all tax is exempted on all donations. A firm, of course, is not allowed to enjoy the two preferential policies simultaneously.

However, Wu emphasizes that the government, at the same time, must use laws and regulations to ensure that enterprises shoulder their responsibility for environmental protection, efficient energy utilization and employees' social security.

For example, Greenpeace and Chinese environmentalists accused APP of damaging protected forest for its paper production in South China in mid-March. "The company is on the top of 2005 Corporate Givers List, but I don't think it is a responsible corporate citizen in China," Chang says.

Teguh Ganda Wijaya, president of APP, explained in an interview with China Business Weekly in May: "We are promoting the paper-making industry in China. We plant our raw materials, eucalyptus (when cutting old ones for production). What we are doing is absolutely right."

Wu also cites some large domestic private steel mills and paper plants as examples, which donate money to the local economies to burnish their image and, at the same time, are reluctant to spend on improving their sewage treatment systems or energy efficiency.

"If a company cannot be responsible for the environment, which provides the raw materials, energy and production site, and the employees, who dedicate themselves to the employer, charity or donation is, in fact, a deceit against the public and the society."

Pan Yue, vice minister of the State Environmental Protection Administration, says that the central government is striving to encourage sustainable development and so environmental protection is on the top agenda.

(China Daily 10/31/2005 page1)