By Xi Jianguo
It is no secret that China is experiencing a rapid transformation of its society, economy and culture. The huge amount of wealth accumulated by Chinese entrepreneurs within such a short time is unprecedented in China and around the world. Yet since the 1980s, Chinese enterprises have accumulated their capital with a confused concept of social responsibility, and have done so operating under an imperfect legal system.
In fact, while Chinese enterprises and entrepreneurs are amassing a huge amount of wealth, they are simultaneously contributing to serious negative impacts that include: the widening of the gap between the rich and the poor; practices of deceit and bribery; production and distribution of fraudulent goods; widespread pollution; unrecoverable environmental damage; and “sweatshop�? labor practices that trample on the human rights of workers.
There is a lot of work to do for Chinese enterprises to balance their economic pursuits and the benefits of this with the social benefits that will promote the social progress and harmony being called for today in the country. Doing so, it is hoped, will create a more sound society that both fosters and is fostered by a culture of corporate social responsibility (CSR).
Can We Get Some Ethics Over Here, Please?
Generally speaking, CSR is a matter of ethics. Chinese enterprises have not been well prepared to act on this. Many still do not have sufficient systems in place to do so. But in the 21st century and especially since 2004, it has become common sense that enterprises should imbed in their practices greater social responsibility. The pressure to do so is coming from a number of sources — the public, media, government legislation and the cultural environment. Taken together, these are pushing enterprises toward greater social responsibility. But in the end and for meaningful change, CSR must evoke a fundamental shift in the development and operation of Chinese enterprises.
To bring about this change, the China Enterprise Reform & Development Society (CERDS) is working to promote new commitments from Chinese enterprises. This entails embracing six core practices:
1. Protecting labor rights and improving workers’ welfare, especially workers’ rights to education and the conditions for self-development
2. Operating honestly, abiding by commitments and contracts, and avoiding production and sale of fraudulent products
3. Protecting and conserving the natural environment and guaranteeing sustainable harmony among people, nature, society and business
4. Donating to charities and helping those in need (the poor and disadvantaged)
5. Supporting cultural activities and especially education
6. Actively participating in community activities and promoting a community’s economic and cultural well-being
In light of the challenges and opportunities facing China today, businesses must make greater efforts to promote social progress in the country. This entails building a harmonious society, creating a good life for everyone, and being a good corporate citizen by practicing what is really traditional Chinese virtue. This will only come about by aligning an enterprise’s culture with the values of mainstream society.
CERDS realizes that as China entered into its recent phase of economic reform, the idea of CSR has been neglected by the government, corporations and the public. As such, responsible corporate practices have been weaker in China, having a dramatic negative impact on China’s environmental, social and also its cultural conditions.
CERDS believes that one important basic step to address these challenges lies in widely promoting the concept of CSR. As such, in October 2005, through the government’s support, CERDS set up the Chinese Enterprise Social Responsibility Research Institute. The Institute is an organization that aims to promote basic understanding of the idea of CSR through foundational research that seeks to create a Chinese CSR standard to assess the CSR performance of Chinese enterprises. Currently, the Institute has developed a membership of more than 100 large domestic enterprises, including PetroChina, one of China’s largest enterprises.
As a neutral organization, CERDS strongly encourages Chinese corporations to implement CSR practices. For example, CERDS undertook a CSR investigation of 10 large Chinese enterprises, including China’s largest coal mining company, Datong Coal Mine Group. Based on these investigations, CERDS has since worked on several CSR projects with companies like Sinopec and Jilin Chemical Company Limited, a large Chinese chemical manufacturer whose factory explosion incited global attention.
CERDS believes that China is at a different phase of its economic and cultural development than developed Western nations, and its uptake of CSR must be consistent with Chinese conditions. China’s first CSR priorities should thus be to reduce the damage that enterprises cause to the natural environment and ensure enterprises are creating products and services that are safe and reliable for society. It is through these basic ideas that CSR can make a concrete impact in China. These are the guiding principles that CERDS uses in its work with its members and will use as it researches and develops Chinese CSR standards.
Compared with the U.S., Europe, Japan, Korea and other more developed nations, China is still far behind on the CSR curve when it comes to awareness, the systems to deliver and actual behaviors. But CSR has just started in China. CERDS is determined to boost the implementation of CSR here and link it closely to international practice and expectations. A new era of CSR in Chinese enterprises will only come through hard work, open-minded collaboration, and innovative and shared solutions. This is the only way to create a 21st century civilization that is filled with both fortune and virtue.
About the author:
Xi Jianguo is Secretary-General of the China Enterprise Reform & Development Society. For more information, visit www.cerds.org.
© 2006 Business for Social Responsibility