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Sorry, That Is Not CSR!

David WolfBy David Wolf
One reason that corporate social responsibility is so big in China is that there are endless opportunities for a company to make a difference, to really change people's lives for the better.

(And let's face it – CSR in China requires a lot more creativity than it does in places where there are printed directories and websites filled with interesting opportunities to get involved.)

So it is frustrating to me to watch very large, wealthy, and capable companies place the proverbial finger on the scales by congratulating themselves for corporate social responsibility programs that have nothing to do with being socially responsible. Not only does this do serious harm to the credibility of the companies involved, but more important, it lowers the value of CSR in the eyes of all public stakeholders China.

Chinese are not stupid: you can say you're doing something for the public good, but if they can work out a way where your benefits far exceed your costs in a CSR program, they'll figure you're doing it for self interest anyway, regardless of your actual intent. They may not call you on it, but they will remember.

Let me give you a few of the more egregious examples of what I'm talking about.

The CSR Fig Leaf
Government Relations disguised as CSR: This is probably the most common offense. Companies seeking to improve their government relations undertake programs or business activities that are solely or primarily designed to ingratiate said company with one or more government entities or officials. Making donations to the alma mater of the President, Premier, or other senior official, for example, is not CSR. Neither is sponsoring the establishment of a new center under a key ministry or a high-priority project of the government.

Research & Development (R&D) disguised as CSR: At one point about two years ago, the China Economic Quarterly (CEQ) counted over two hundred multinational corporations that had opened R&D centers in China. Whether or not any or all of those centers actually conduct substantive research and development, or are simply engaged in product localization is not the point: the incessant pitching of R&D centers as “points of technology transfer� or “efforts to raise the quality of local research� don't qualify R&D as CSR. In a local political environment increasingly focused on innovation, both indigenous and otherwise, R&D is seen as a purely commercial, self-intested exercise, regardless of how you may want to spin it.

Corporate Selling Responsibility
Training disguised as CSR: No matter how you try to spin it, opening academies to conduct free or subsidized training programs to train Chinese students or managers how to use your product is not CSR. Any kind of instruction you conduct to get more people to use your product to the exclusion of any others is marketing and nothing else.

Donating branded, habit-forming products to schools: Regardless of intent, if a program serves to build a habit of using a product or service among students, it is not CSR. This was my big problem with a large multinational software manufacturer who donated hundreds of millions of dollars of its software to schools around China. While the donation in theory saved the schools money, in reality it served two purposes: it ensured that the legit copies offset unlicensed copies, and that the schools would not select open source alternatives. That's not CSR, that's market development.

Ooh, did that hurt? Have an aspirin…
Shoot 'em and give 'em a band-aid: Companies whose operations or products inflict significant social costs fall into a unique category. They must, by definition, undertake programs designed to offset the social costs of their activities. These programs are increasingly perceived as a form of obligation, something the company owes China in return for being able to operate here, and as such their CSR efforts aren't really CSR, but more of a tax. Petrochemical and automobile companies fall into this category, as do companies who are in the vice business: tobacco, alcoholic beverages, and fatty foods.

CSR and the Eye of the Stakeholder
If there is one common theme, it is this: CSR is not what you say it is, but what your stakeholders in China perceive it to be. If they see a CSR program as primarily driven by self interest, it is not about social responsibility. The answer to that is not cranking up the PR spin: the answer is devising and implementing programs whose social benefit is at least equal to – if not greater – than the direct benefits the company enjoys.

If you're guilty of any of the above, don't take it personally. But going forward, it's clearly time for all of us to start thinking more creatively – and honestly – about CSR.

About the author:
David Wolf, President and CEO of Wolf Group Asia, a management advisory firm providing strategic communications counsel to technology, media, entertainment, and telecommunications companies in Greater China and the Asia-Pacific region. He is also Contributing Editor for China CSR. David's opinions are his own and do not reflect those of either WGA or its clients.