Corporate Social Responsibility (CSR)

Project description

Title: Corporate Social Responsibility (CSR)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: China
Lead executing agency: Ministry of Commerce (MofCom)
Overall term: 2007 to 2012

Context

The Chinese government’s successful open-door policy has enabled the country’s strong and sustained economic growth during the past three decades. However, this development has had negative social and environmental consequences – for example, difficult working conditions and enormous amounts of pollution – that could endanger China’s sustainable and politically stable development. The Chinese government has acknowledged these challenges and has introduced the model of a ‘harmonious society’ which underpins its eleventh Five-Year Plan and aligns economic interests with social and environmental interests. Enterprises play a principle role in implementing this vision. In response to the problems, the concept of socially responsible corporate management (Corporate Social Responsibility - CSR) has become an important theme in China in recent years and has found its way onto the development agenda of the country. However, the key players in China do not yet have sufficient knowledge and experience in this area.

Objective

Key political institutions, intermediary organisations and enterprises have integrated Corporate Social Responsibility (CSR) into their policies, strategies and practices.

Approach

The project is based on an approach that involves all stakeholders affected by CSR-related issues (multi-stakeholder approach). It advises the Chinese government on the national, provincial and city level in developing policy recommendations and incentive mechanisms, with whose help companies shall be encouraged to include social and environmental aspects sustainably in their business practices. Business associations and chambers of commerce are assisted in the development of concrete action plans for the implementation of CSR and social standards in their member companies. The project works within the framework of public-private partnerships (PPPs) together with local companies to enable them to plan and implement practical CSR policies. In addition, the project contributes to the creation of strategic partnerships between Chinese and foreign organisations in order to share knowledge and experience in CSR and to improve coordination between Chinese and foreign standards systems.

Results achieved so far

The recommendations of ‘CSR in China and Its Relevance for International Trade’, a study commissioned by the project, were taken up by the Foreign Trade Department of the Chinese Ministry of Commerce and implemented as internal guidelines. As a result, not only economic criteria, but also social and environmental criteria are now considered in the granting of export licences.

In cooperation with the ‘China WTO Tribune’ organisation, several practice-oriented publications were produced for the integration of CSR into business operations in China, including the manual ‘How to Write a CSR Report’. Furthermore, three international conferences on CSR reporting were held in China between 2008 and 2010. These activities have contributed to the significant expansion in CSR reporting in China. Whereas only 32 Chinese companies published CSR reports in 2006, this number had risen to 582 in 2009.

Twelve PPPs were successfully conducted with local companies in the provinces of Hebei and Zhejiang. These businesses independently pursued the measures developed in their CSR strategies to improve social and environmental management. For example, the Chinese company "Fotile Kitchen Ware Co. Ltd." developed an effective system for the management of hazardous waste, improved working conditions in its factories and introduced additional social benefits for employees.