Emily D'Ath

29Jul/104

Things are different here – CSR in China

Source: http://www.nytimes.com/2008/12/16/world/asia/16taiwan.html?_r=1

Foreign companies implementing Corporate Social Responsibility (CSR) in China often face an uphill battle. A quote from an individual working in the textiles industry in China highlights:

"One of the biggest problems with ethical manufacturing guidelines in China is that often people do their best to work around them, regardless of what company policy requires."

So why does it seem so hard?

One reason it is so hard, is because China is so different to the 'West'. There are different ways of getting things done and often different motivations. The cultural, political and historical context of China needs to be considered when implementing CSR. Recently I came across a series of articles on CSR in China. Country Briefing: China written by Paul French for the Ethical Corporation reinforces the difference and complexity of CSR in China. Three key points he makes include:

  1. In China there is a stronger focus on philanthropy and compliance. Whereas in the West CSR is considered more voluntary and altruistic
  2. China’s economy has been built through access to vast quantities of cheap labour
  3. The concept of an NGO (non government organisation) in China doesn’t really exist. Those that do are often tightly controlled by the government

Recognising differences in how CSR is viewed in China is the first step to structuring an approach that will work better. Foreign companies need to focus their CSR strategy on:

  1. Building partnerships with local organisations
    It is important to work with local communities including the local government. This will build (two-way) awareness and understanding of what you are trying achieve. Focusing on Guanxi (networks) will help to build traction and sustainability. Pentland are doing fantastic work in this regard.
  2. Focus on compliance and mandatory reporting
    This is the challenging part, mainly due to the scale of operations in China. Compliance control is slow and grinding work and you need a lot of hands on deck. But it is vital if you want your policy to be more than greenwash or PR rhetoric. Ideally you need people external to the company to avoid corruption. GRI (Global Reporting Index) and UN Global Compact provide great resources and support around reporting.
  3. Understand the cultural context of China
    The Chinese proverb "The mountains are high and the emperor is far away" is one simple example of explaining why CSR guidelines are often not adhered to. The more you learn about how culture influences peoples decisions and actions in China the more effective social responsibility initiatives will become.

This is just the tip of the iceberg when it comes to CSR in China. For great reading check out:

Collective Responsibility
Greennovate
JUCCCE
CleanerGreenerChina

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  • Hi Emily.

    Thanks for the plug.

    Things really are different here, but I would argue that Paul's three highlights are a bit misaligned or a bit out of context.

    First, yes, China is more focused on philanthropy and compliance, but that is not just an issue of CSR. It is also a function of the economy, and the fact that the strongest firms (CSR wise) were manufacturing based -thus the compliance angle - but with the consumer economy, and the need to build relationships, firms have seen philanthropy as an easy box to check... but that is changing, and citizens, gov't agencies, and other stakeholders are looking for more, and are looking for ways to get involved as well.

    Second on is pretty self explantatory, and I would agree, but add that every economy starts this way and then evolves into another form where labor costs rise.

    final point is related to NGOs, and the level of recognition that exits. I would actually disagree with Paul on his comment, and say that in many ways it is the exact opposite because at one point it was true. Considering the rise of overall awareness, and matching distrust of the GONGOs (Gov't organized non-government organizations), a natural path towards grassroots NGOs has been underway for the last 3-5 years (depending on the area of China), and that many of these are being seen by stakeholders as the way forward. GONGOs will continue to improve, but they will have a very different role that community based NGOs.. as they should.

    ... and I totally agree, this is only the tip of the iceberg, and I hope to see more posts from you going forward.

    Hope all is well
    R

    www.collectiveresponsibility.org
  • Thanks for your comment.

    The reason I wrote this post is because in China there are some who think CSR here is almost impossible. My belief is that the frustration at lack of progress is, in part, due to CSR being perceived from a ‘Western’ perspective. That is, by many of those I’ve spoken to who are working for foreign companies in China. Whereas—and you allude to this in your comments—working within and understanding the Chinese approach (e.g. GONGOs), is the way forward.

    Could you give your thoughts on the importance of foreign companies understanding the subtleties of how CSR is played-out in China?

    The points I’ve pulled from Paul’s articles are only snippets and he discusses the thought behind them at length in the rest of the article. I agree these points are only a small piece of a very big puzzle, but having reviewed Paul’s article in full, don’t agree that they’re misaligned or out of context.

    The objective of this article is to introduce a complex area of business in China for an audience who are not immersed in the culture or (yet) familiar with the subtleties of how and why.

    This blog is aimed, for the most part, at an audience outside China. As an introductory post, some generalisations are inevitable. I’m eager expand my own knowledge of the topic and aim to expand on some of the things you mentioned in future posts.
  • Hi Emily.

    I never run into people who think it is impossible.. but they are certainly frustrated!

    Part of that is the fact that there are too many choices for developing programs, programs that are good but conflict with the global organization, and are thus shelved. On the other hand, you see the pet projects in groups that should not be partnered with, and when the program goes sideways they blame the intangible China when it was really an issue of program development and management.

    Which brings me to your question. It is of CRITICAL importance that foreign firms understand what they are doing in China, invest the TIME and MONEY to develop a CSR strategy that is balanced (philanthropy is only a single part of the CSR pie), engages stakeholders, monitors / reports back results, and then increases the intensity at the right times.

    For many CSR is about writing a check and getting a picture with the Mayor, when it is really about how one executes their business in China. Supplier engagement and issues labor safety, environmental controls, ethics and governance, etc.. issues that over the long term should reside in the core of the company and its employees.

    R
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