By Aron Cramer
Very often, China is understood through the lens of Westerners who reflect their own perspectives. We hope that by offering you multiple Chinese perspectives from business, academia and government, we can help illuminate corporate social responsibility (CSR) in China in some new ways.

In his article, BSR's own China Director Zhou Wei Dong asks, "Given weak civil society, will CSR work in China?" I hope that the perspectives here help you answer the question he poses and other crucial issues around the interplay of business, government and society in a truly dynamic and important operating environment.

Over the past year, BSR has invested time in developing a wider range of relationships with the fast-growing number of organizations working on CSR in China. You will continue to see the results of this in our publications, the Annual Conference, and our projects on behalf of BSR member companies.

Follow the Evidence
China's economic rise is critical to the rest of the world — not least of which as it impacts climate change, arguably the main CSR story of the first half of 2006.

The evidence?

In May, insurance giant AIG became the first company in its industry to establish a climate policy, following the lead of reinsurers SwissRe and MunichRe. Insurance Australia Group was quick to follow, and others will surely do so as well.

Also in May, ExxonMobil's 2005 Corporate Citizenship report states, "…The risk that greenhouse gas emissions may have serious impacts justifies taking action." This, coming from the company most closely associated with opposition to action on climate change, is noteworthy.

Lee Scott, Wal-Mart's Chief Executive, said in a widely quoted speech several months ago that "The [climate] science is in, and it is overwhelming." The company continues its recent push to reduce its footprint and bring along with it the huge number of companies that depend on Wal-Mart.

The 2006 World Cup will be one of a growing number of carbon-neutral events — with three of the venues in Germany being solar-powered. In France, "eco-labeling" of all new cars is becoming mandatory, with the carbon footprint of cars being mandated to help drive consumer behavior. And as of July 1, all new French homes are now rated for their energy use.

In Silicon Valley, the race is on for "cleantech" investments. The likes of Bill Gates and legendary venture capitalist Eugene Kleiner are looking to make (additional) fortunes from the energy version of "The New New Thing." Their goal is to find the Google of the cleantech market.

And let's not forget the Cannes Film Festival, where former U.S. Vice President Al Gore became an unlikely celebrity on the red carpet with his film "An Inconvenient Truth."

These examples are signals. But what do they signify?

From Signals to Significance
First, the consensus on the science is solid. A recent U.S. government report put the final nail in the coffin of climate skeptics, and the 2007 report from the Intergovernmental Panel on Climate Change is expected to represent "a level of consensus unusual for the scientific community." This signals a fundamental – and permanent – shift from the debate about whether climate change exists to a debate over how best to manage it.

Second, with change upon us, the clock is ticking on our ability to influence it. Climate modeling is increasingly clear that action over the next few years will dictate a 2°-4°F increase, which will determine the extent of sea level rise from polar melt. Evidently, we have already entered the era of adaptation.

Third, we are entering a season of renewed political activity, as governments are beginning to look at post-Kyoto solutions that don't leave the U.S., India and China on the sidelines. China's government is talking about new development models and has established strict vehicle emissions controls. Potential American presidential candidates – both Republicans and Democrats – are talking about the need for increased action.

What does this mean for companies? Even if we put aside the most dire predictions about coastal cities becoming uninhabitable, or a change in the jet stream that ushers in a quasi-ice age in Europe, major change looms.

Getting More Strategic About Climate Change
The changes projected go far beyond the energy and transportation sectors. Supply chain disruptions and limits on siting as a result of climate-related issues will more often become the norm. In this climate, a company without a low-carbon strategy doesn't have a strategy.

Businesses will increasingly be expected to play a more prominent role in the public debate. In fact, the cooperation and mobilization needed to address this challenge will happen only if the traditional adversarial relationships are jettisoned in favor of collaboration. Many will look to the business community for public leadership, and could decide to punish those businesses that do not provide it.

New business opportunities will surely arise. If, as many believe, a carbon tax of some sort is phased in widely, the economics of low-carbon investments becomes radically different.

For a glimpse of alternative futures, the Australian Business Roundtable on Climate Change, including BP Australasia, Westpac and SwissRe, have developed "early action" and "delayed action" scenarios, and compared the economic impacts of each. The delayed-action scenario would knock 10 percent off of Australia's GDP growth, and 250,000 fewer jobs through 2050 than the early-action plan. The state of California and the city of Sao Paulo, Brazil, have completed similar studies. We are at a societal and economic juncture where early movers will be the clear winners.

Look for more from BSR on climate in the months ahead, through channels including our Annual Conference, our collaboration with the University of Cambridge's Business and Environment Programme seminars, and work on environmental markets.

I will leave the last word on this topic (for now) to Clive Crook, Senior Editor at the The Atlantic Monthly magazine. Crook penned the famous cover story for The Economist in early 2005, which questioned the core premises of CSR. In the June edition of The Atlantic Monthly, however, he seeks action on global warming, calling for efforts to effectively address "the world's biggest environmental risk and become more prosperous in the bargain."

About the author:
Aron Cramer is President and CEO of Business for Social Responsibility.

© 2006 Business for Social Responsibility

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