A study on corporate social responsibility development and trends in China

Corporates Social Responsibility

Executive Summary

Driven by the efforts of different stakeholders to promote more responsible business practices, the efforts of corporate social responsibility (CSR) in China have grown steadily over the past decade. As a joint initiative between the Centre for Corporate Social Responsibility (CSR Centre) of the Embassy of Sweden in Beijing and CSR Asia, this study provides an overview of the current state of CSR in China and an indication of possible future trends as the scope and understanding of CSR in the country continue to develop. The key findings and insights presented in the study are based on a review of existing literature and research, the results of an online survey and qualitative analysis of focus group comments and interviews.

 

Overview of CSR landscape

Although most respondents believe that CSR is effective in addressing social and environmental issues in China, they are not satisfied with the current state of CSR in the country. In their view, understanding and implementing CSR in China is currently largely limited to philanthropic activities.

Respondents believe that the most important CSR themes for companies in China are economic performance, environmental impact and workplace issues. They believe fair operating practices such as anti-corruption and fair competition are considered the least important.

Geographically, the major cities (e.g. Beijing, Shanghai and Guangzhou) and the Eastern and Southern China regions are seen as the places where CSR is the most developed in terms of knowledge and performance among companies. Respondents attribute this primarily to the openness of the market.

 

Drivers and incentives

The government is considered to be a key driver in the promotion of CSR. Compliance with national policy, legislation and regulations is ranked as the top incentive in terms of CSR implementation for Chinese companies.

International clients are considered to be another important driver of CSR development. Chinese companies involved in international supply chains are highlighted by the respondents as the first group of companies to introduce CSR practices, although they may not have fully understood the concept in the beginning.

Insufficient monitoring of compliance is ranked as the top obstacle impeding companies from better implementing CSR strategies. Another key obstacle mentioned is the lack of long-term CSR strategy, knowledge and professional staffs.

 

CSR themes

Economic performance is perceived to be the CSR issue that is being best addressed, with many companies in China believing this to be their primary responsibility to society. Workplace issues are also viewed as being among the better-addressed issues, reflected in higher levels of compliance with labour policies and standards. Corporate concern for human rights is generally viewed in the context of workplace practices and is limited to areas such as anti-discrimination, child labour and forced labour. Broader human rights issues are seldom discussed by businesses in China, due mainly to perceived political sensitivity. Respondents believe that companies are generally further behind as regards environmental issues, although there is increasing pressure for businesses to enhance their performance in this area. Anti-corruption and fair competitions are viewed as the least addressed CSR issues. Levels of voluntary disclosure in these areas remain low, perhaps reflecting corporate concerns that speaking out on these issues may result in undesirable consequences for their business.

 

Trends and expectations

Most respondents are confident about the future of CSR in China. While expressing the view that it will take over a decade to achieve significant change, respondents believe that CSR knowledge, implementation and communication will all increase and that disparities between CSR development levels in different regions will continue to shrink. Respondents are generally of the opinion that the government will remain the key driver of future CSR development, but that the private sector will become more proactive in CSR implementation.

Driven in part by rising public awareness and concerns, environmental performance and labour practices are viewed as the most pressing CSR issues for businesses in China over the next decade. Transparency, anti-corruption and ethical behaviour are also considered important in this regard.

The government is expected to strengthen the enforcement of related legislation, and the media is expected to increase its coverage of CSR activities and performance beyond philanthropy. Respondents recommend that companies focus on enhancing their CSR strategy by finding ways to strengthen senior management’s commitment to organisational CSR and further integrate CSR into daily operations. The government, companies, and different sectors of civil society are expected to increase collaboration on CSR in the future. Partnerships between major brands and suppliers, large companies and SMEs, and local and foreign corporations are all viewed as being beneficial for business and for driving the CSR development agenda forward.

 

To download full report, click here: CSR Asia