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CSR Your Organisation's Footprint on the World |
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Written by Paul Bacon
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Learning where is safe to tread with Corporate Social Responsibility
I remember as a small boy my father taking me on vacation to the Yorkshire Dales National Park in my native England. The memory of rolling green hills and crisp clean country air remains vivid with me to this day, as does some sage advice he gave me - "leave only footprints; take only photographs." He was trying to instill in me a sense of responsibility towards my surroundings, to show me that I should protect them so that others could enjoy them in the future. To me, this idea also defines the essence of Corporate Social Responsibility (CSR), especially in China. Countless multinational organisations now have bases here and they must ensure that they have a positive impact on their new surroundings.
With such ideas in mind I think you should ask yourself, what kind of footprint your organisation leaves on Chinese soil. Does it tread lightly considering the welfare of its employees, the local community and the environment? Or, does it trample everything underfoot caring only about profit and loss? For multinational organisations, China is a relatively new market with low labour costs and far less stringent legislation than in their home countries. For this reason there is, unfortunately, every opportunity for them to leave a rather deep and unsightly impression on the country. Examples of this are most often visible in areas such as employee safety and environmental consideration.
For example, in August this year the Institute of Public and Environmental Affairs issued a report that claimed ninety major multinational companies were guilty of industrial pollution and were flagrantly ignoring their legal limits, as illustrated by Ma Jun "Many of these multinational companies have strict environmental standards in their home countries, but they lowered the standards after launching branches or joint ventures in China." Such flaunting of China's environmental legislation is a contributory factor to China overtaking the United States as the world's leading polluter - it currently pumps 6,200 tons of carbon dioxide into the Asian skies every year. The China State Administration of Work Safety also reported that last year 112,000 Chinese died in the workplace. Of these, every year for the past decade at least 5,000 mine workers have lost their lives below ground digging for the coal to fuel China's economic expansion.
Seeds of Change
The picture painted above certainly is a gloomy one. However, it is not a true representation of all multinationals, several major organisations have well-established CSR programs and others are quickly following suit as social awareness rises in China. Whilst serious issues still remain, it is clear to see that many companies are beginning to tread far more carefully. Sadly, the determining factor with CSR is often not concern for surrounding communities and the environment, but rather money. With no direct return on their investments, many organisations see CSR as a frivolous, unnecessary expense, but they could not be more wrong. Managers who think like that should invest in a pair of spectacles or contact lenses because they are suffering from an extreme case of short-sightedness.
It is true that CSR activities do not bring instant fiscal gratification, but they are vital for an organisation's long-term sustainable development. A survey by international finance company KPMG showed that 75% of the companies that issued CSR reports in China last year did so to build brand reputation and market confidence. Yin Gefei, editor of the Ministry of Commerce's publication China WTO Tribune, added that "It is apparent that multinationals use CSR reports as a good platform and an efficient tool to polish their corporate image and facilitate expansion in the long run." This plan of attack seems to be bearing fruit for many Chinese companies as well. A study undertaken in the Pearl River Delta by the United Kingdom's Foreign and Commonwealth office showed that many smaller and medium sized companies were waking up to the need for a social conscience. Guo Wanda who led the research team commented that "By comparing their costs and returns before and after the implementation of CSR, we found the companies with good practices of CSR gained new impetus for their long-term healthy development."
"It is true that CSR activities do not bring instant fiscal gratification, but they are vital for an organisation's long-term sustainable development."
Sustainable Development
I recognise that I am making the case for developing a CSR policy quite strongly, whilst not actually being all that practical. I can hear you screaming "How can CSR help my organisation?" Relax, do not worry. Let me explain.
1. Public Image
As the KPMG survey mentioned above showed, reputation is a big factor. The underlying wisdom of Corporate Social Responsibility is that if an organization meets its social obligations to the community in which it operates, it is likely to enhance its public image and reputation. Doing this will help in developing new business and attracting new customers. This idea is best illustrated through community and environmental projects. Organisations which show they want to give back to, as well as take from, a community are far more likely to create a positive image within it. Sporting goods giant Nike highlights its commitment to community development in its CSR mission statement "Nike is about sports, but we also recognize our responsibility as a global company to address our impact in the communities where we live, work, and play. It is our intention to participate in the communities where we do business, and to act as a catalyst to improve quality of life through job creation, employee involvement, contributions, and partnerships." Making a strong impact in a community - leaving a nice clean footprint if you will - can act as a cheaper and far more penetrative form of advertising. Below are some excellent examples of community projects by multinational organisations.
- In 1997 Nike noticed that to play basketball most young Chinese in Shanghai needed to go to courts inside schools and universities. Unfortunately, these were all closed and locked when school finished, meaning there were very few places for people to play in the evening and at weekends. So, Nike began to work with city and education officials to get courts opened later. For the first few years this yielded an extra five courts every year, but has since grown even larger until now the majority of basketball courts in the city are open for much longer.
- German chemical giant BASF has also been at the forefront of community involvement running its ‘kids lab' in Beijing, Shanghai and Nanjing for the past five years. The labs give children - including many from disadvantaged groups such as the deaf, children of disabled parents and children of migrant workers - the opportunity to try out different fun experiments, including many related to environmental protection. So far, almost 60,000 kids have attended the labs.
- Project Hope is one of the most famous non-profit projects in China. It is designed to support young dropouts in poor areas of the country. More than 30 million children in China between the ages of 6 and 14 are unable to regularly attend school. The Hope school project is designed to provide the facilities to give them the opportunity of getting a good education. Corporate sponsors of this project include AstraZeneca, Fujitsu and Microsoft who each donated money and equipment.
2. Employer Reputation
The second factor is the impact a company's actions have on employees. On a very basic level if an organisation creates a good impression with its employees showing that it cares about them and their community, then, as a consequence the employees are likely to be more loyal and increasingly productive. However, it should be taken as read that major multinational organisations will treat their staff well. Instead, you need to think beyond this, not just about your own commitment to factors such as workplace safety and worker's rights, but the commitment of suppliers and vendors also.
The issue here is of creating a strong image of integrity and trustworthiness, allowing customers to feel safe in the knowledge that the products or services they are purchasing are not causing pain and suffering in their own community. For instance Shell, in its Statement of General Business Principles safeguards the welfare of its own employees as it aims to "To respect the human rights of their employees, to provide their employees with good and safe conditions of work ... [and] to promote the development and best use of human talent and equal opportunity employment." It also reaches beyond this by making clear its position on employee rights as a whole as it pledges to "To conduct business as responsible corporate members of society, to observe the laws of the countries in which they operate, to express support for fundamental human rights in line with the legitimate role of business and to give proper regard to health, safety and the environment."
- In 2003 Nike began the Ziao Chen Worker Hotline. 50 workers were trained to educate their peers on such issues as labour contracts, disputes, wages, leave, health & safety and rights for female workers. As an up shot of this a new grievance system was put in place consisting of grievance boxes, a hotline, e-mail and access to union offices.
- Japanese electronics giant Sony uses its Sony Supplier Code of Conduct to ensure the companies it works alongside show respect for health & safety, human rights and work environment.
- In 2002 HP set out strict guidelines for all its suppliers. It stipulated that they must demonstrate "responsible management and operational practices". The supplier code featured strong commitments to labour rights and health & safety
3. HR Relevance
The final factor is perhaps closest to our hearts, relating to how CSR can aid an organisation in its HR pursuits. That's right, CSR can have a direct impact on your job, so, pay attention! This overlaps slightly with the previous two factors. First of all, a good reputation will not just attract customers; it will also attract potential employees. Second, if an organisation cultivates a good reputation with its staff, they are more likely to stay loyal. However, HR should be a major concern for any organisation embarking on a CSR voyage. Great examples of HR oriented CSR projects come through cooperation with universities and community education projects, which not only serve the Chinese community, but also cultivate potential employees.
- In 2005 petroleum producer BP worked alongside Sun Yatsen University to launch the SYSU-BP Centre for LNG Education, Training and Research. The centre focuses on developing LNG engineering technologies, promoting international exchanges of professional knowledge and providing high-level professional training.
- Since 1998 Cisco Systems has established more than 220 Cisco Networking Academies across China. These help students to acquire new network technology skills. From April of this year it also began partnerships with Beijing University of Post and Telecommunications and Shanghai Jia Tong University to launch the ‘Cisco Academic Practice and Innovation Club', which is aimed at cultivating talent by giving access to high-level technology and R&D concepts.
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