June 2-3, 2008. Shanghai campus - An audience of more than 300 business executives, NGO representatives, academicians and students gathered at the CEIBS Shanghai campus over two days to participate in the EUCCC-CEIBS Forum on “Responsible competitiveness in China through CSR: From concept to implementation”. With the aid of seven keynote speeches, eight workshops and two roundtable discussions that focused on CSR within the context of wider issues such as public health, labour law compliance, risk assessment, the environment, and marketing & communications, the event offered a practical look at what it really means to be socially responsible in today’s China.
CEIBS Vice President and Co-Dean Professor Zhang Weijiong making opening remarks.
The tone of the frank discussions that would follow was set from the opening address on Day One, delivered by European Union Chamber of Commerce in China (EUCCC) President Mr. Joerg Wuttke. Pointing out that CSR is often seen as a “direct risk to profitability”, Mr. Wuttke stressed that unless there are clearly defined and regulated rules of the game, CSR-compliant firms may face stiff competition from rivals that cut corners in areas such as EHS and labour practices. “The only answer is aggressive engagement with local communities and regulators to encourage proper enforcement of existing laws, to convince stakeholders of long term regional economic interests to promote investments by ethical, sustainable industries,” he said.
The role of b-schools in the CSR debate
In his opening remarks, CEIBS Vice President and Co-Dean Professor Zhang Weijiong spoke of the increasing awareness of CSR, pointing to its frequent use by rating agencies as a ranking factor. He said he hoped the forum would provide companies and individuals that know the value of CSR with “new philosophies for corporate strategy”.
CEIBS Distinguished Professor of Globally Responsible Leadership Henri-Claude de Bettignies, who is also Aviva Chair Emeritus Professor of Leadership and Responsibility at INSEAD, then focused on “CSR in China: The road to sustainable development and harmonious society” during his introductory speech. According to Prof. Bettignies, the Chinese government’s “harmonious society concept” can be seen as an attempt to promote CSR at the societal level. While he acknowledged that many corporations within China practice CSR, he pointed out that there are also many sceptics. This scepticism, Prof. Bettignies explained, stems from misconceptions about the definition of CSR. He maintained that business schools have a major role to play in educating and shaping future corporate leaders who will have to face up to the reality that “globalization will make CSR a categorical imperative”.
The forum’s first keynote speaker was Executive Vice President of Volkswagen Group China, Dr. Zhang Suixin, who spoke about his company’s views of and practices in CSR. "CSR for us means not only responding swiftly to aid in times of emergency but also making long term, steady contributions on the basis of Respect, Responsibility and Sustainable Development, which happen to be three of the seven corporate values of Volkswagen Group,” Mr. Suixin said. At the time of his speech Volkswagen Group China, Shanghai Volkswagen, FAW Volkswagen and Audi China, had donated a combined total of RMB23.68 million to help combat the effects of the Sichuan earthquake, he said.
The European experience, what’s relevant for China
"Linking CSR with competitiveness - the European experience” was the title of the next speech delivered by Mr. Richard Howitt MEP, the European Parliament Spokesperson on CSR. Mr. Howitt’s presentation covered areas such as the CSR debate in Europe and how social responsibility is linked to corporations’ competitiveness. He also gave suggestions on how China-based employees of European firms could help China strengthen its efforts at CSR. These included: sharing CSR policies and practices used in Europe with China-based co-workers, as well as identifying stakeholders and engaging them in dialogue. With regards to public officials and business leaders, Mr. Howitt suggested that they offer genuine and responsible leadership on CSR.
European Parliament Spokesperson on CSR Mr. Richard Howitt MEP (at the podium) speaking on "Linking CSR with competitiveness - the European experience".
Mr. Yin Gefei, Vice President/Director for China WTO Tribune/Development Centre for Chinese CSR then spoke on "The state of responsible competitiveness in China”. He explained that there is now a new era of responsible competitiveness built on three levels of competition - CSR-oriented competition is just one of the three. According to Mr. Yin, the other two are market-oriented competition and environment-oriented competition. The challenge, he suggested, lay in finding the right balance.
"Which CSR concepts and models could be of relevance to China today?” was the question on which Professor of Strategy and Hewlett-Packard Chair in CSR at York University, Toronto, Dr. Dirk Matten focused. He told the audience that global challenges to CSR that will likely be replicated within China include: Chinese companies moving up the value chain; China’s increasing global integration; pollution; the lack of an accepted global definition of CSR; and the global mistrust of corporations. Prof. Matten suggested, however, that solutions may lay in trends such as the increasing use of implicit (as opposed to explicit) CSR and the increasing company-wide knowledge of corporate social responsibility. CSR, he said, had moved from just being the purview of top management or specific departments to all levels of employees.
Integration of CSR into Chinese firms
The four keynote speeches from Day One were followed by three simultaneous workshops on “The functional integration of CSR in the company in China”. The first break-out group examined the topic from the perspective of "Public health: How to manage health issues within the organization in China?” Chaired by Director for CSR Asia Dr. Stephen Frost, the panellists were China Representative for Total China Mr. Jacques de Boisséson and Programme Manager for Chinese Foundation of Hepatitis Prevention and Control Ms. Linda Zhang. Mr. de Boisséson shared his company’s experience in managing hepatitis B in China while Ms. Zhang provided hard data on the disease, the challenges faced by carriers and the redress they have according to law.
The second break-out session, which examined “Labour Compliance: How to encourage better human resource management”, was chaired by CEIBS Lecturer of Management Dr. Sophie Chen. The discussions involved Senior Vice President & General Counsel for Rhodia, Ms. Ghislaine Bouillet-Cordonnier, highlighting the steps the company has made - and will make in the future - in implementing China’s new labour laws. “As soon as the implementing rules for the new law will be promulgated, a questionnaire to all sites will be launched, to audit practices,” she said.
The title of the day’s other sub-meeting was “Risk assessment: How to map and manage possible risks to your business and reputation”. The panellists were Regional Head of Corporate & Regulatory Affairs for Asia Pacific British-American Tobacco, Mr. Simon Millson and Vice President of CSR for Bayer Greater China, Mr. Bill Valentino. The discussion was chaired by Senior Associate at the University of Cambridge’s Programme for Industry who also serves as CEO for CSR International, Dr. Wayne Visser. During his presentation, Mr. Millson offered insight into assessing, measuring, mapping and tracking, as well as managing risk to a firm and its reputation. “At the end of the day, you have to accept some risk. It’s not a risk-free world,” he said, adding that the key factor is a quick and decisive response in mitigating risk. For his part, Mr. Valentino shared his knowledge about how to prepare for a crisis, the management structures needed to effectively manage risk, and how to respond during an actual crisis. To hammer home his point, he drew on the well-known credo of crisis management: Be first, be right and be credible.
Strategy session
A roundtable on “What are the major issues in CSR strategy in China”, which was chaired by York University’s Prof. Matten, was the last discussion for the forum’s first day. It included an address by General Manager of SynTao Company Ltd., Dr. Guo Peiyuan, who looked at CSR from a political, economic and social context. He contrasted the different approaches between Chinese firms and their counterparts in the rest of the world. While global companies are likely driven by economic and ethical considerations, innovation and learning, and employee motivation, Dr Guo said, their Chinese counterparts are largely driven by their support for government policy. These distinctions, he stressed, are vital to note in any discussions on CSR strategy within China.
Managing Director of APCO Worldwide China Offices, Mr. Murray King, then spoke about CSR within the context of China’s unique civil society environment, the government’s role, global versus local expectations, and operational issues. “Some issues are top-of-mind for both EU and Chinese stakeholders (such as environmental impact and labour relations) but there are other issues at home that haven’t “popped” in China. We don’t yet know what form they will take,” he said.
The next speaker, CSR Manager for Asia at DLA Piper UK LLP, Ms. Clare Pearson, drew heavily on the May 12 Sichuan earthquake during her presentation entitled “Using your company’s core resource to make a real impact”. "CSR is about the survival of your company in the post-earthquake era,” she said, adding that it was extremely important to respond not just quickly but also appropriately.
Day Two: CSR gives textile firms a boost
Day One of the EUCCC-CEIBS forum ended with CEIBS’ Prof. de Bettignies’ comprehensive summary of the points made by the 16 speakers who had taken to the podium over the past eight hours. The forum continued the next day with an equal number of speakers who explored CSR within the context of competitiveness, the environment, supply chain management, marketing and communications, and more. The first session, which got underway at 9 a.m., began with introductory remarks from Secretary General of the EUCCC, Mr. Michael O’Sullivan who said China’s unique features - impressive economic growth, fragile civil society, emerging consumer power, etc. - made the issues being discussed at the forum particularly relevant.
CEIBS Distinguished Professor of Globally Responsible Leadership Henri-Claude de Bettignies.
Then, the day’s first keynote speech was delivered by Deputy Director of CNTAC, Ms. Yan Yan. In a speech entitled “Development of CSR in the Chinese Textile and Apparel Industry”, she shared experiences from the industry as a potential model for other sectors of the economy. According to Ms. Yan, research has shown that there is a correlation between CSR and business performance in the textile and apparel industry. For example, nine companies that voluntarily implemented a CSR-related programme called 9000T had seen a significant increase in retaining migrant workers who usually do not return to work after the Chinese New Year, she said. On average, the numbers had increased from a 60 percent return rate to 95 percent, and two companies actually gained additional employees, she explained.
Green CSR, public-private sector collaboration, and strategic integration
The second keynote speech for the day was given by Deputy Director of the Institute of Public & Environmental Affairs Mr. Ma Jun whose speech was entitled “China’s Green Choice?” He used hard data to paint a troubling picture of the environmental degradation that has accompanied China’s impressive economic growth. Mr. Ma explained, for example, that in 2006, 60 percent of monitored bodies of water were contaminated; 28 percent of rivers and lakes were totally unusable (and that number was as high as 60 percent in areas such as Beijing and Tianjin); 50 percent of major cities now have polluted air; and of the country’s 600 cities, 400 face a water shortage. “The country is being destroyed - its water, its air, its soil. We need to change that and I hope you join our efforts,” he urged the audience.
In her keynote speech, UNICEF’s Country Representative for China Dr. Yin Yin Nwe highlighted the progress China has made in the last three decades, the unevenness of that progress, the challenges the country still faces and the role that corporations can play in helping overcome these challenges. She stressed that efforts to help should be in line with the standards and criteria outlined by the state. “Bringing the public sector dimension into the private sector’s CSR programmes can have beneficial results for children. Conversely, neglecting to coordinate with the public sector leads to unintentional gaps and, at times, a negative impact,” she warned.
The forum’s second roundtable looked at “Examples of the strategic integration of CSR: How to do it”. SynTao Company Ltd’s Dr. Guo chaired the discussion by President of Rhodia Asia Pacific Mr. Michel Ybert, CSR Asia Director Dr. Stephen Frost, and China Representative for Grameen Foundation Mr. Wei Wei. Mr Ybert touched on CSR as a part of corporate strategy by exploring issues such as cost benefit; effective integration of stakeholders and giving examples of how to learn from other organizations. "CSR, being part of everyday operations, must be part of corporate strategy,” he said. His company implements CSR through a project called Rhodia’s Way in which the bulk of its employees are directly involved in meeting stated commitments by collaborating with six specific company stakeholders.
Measure your CSR ROI
CSR Asia’s Dr. Frost, who spoke about “A CSR Management System”, told the audience that the implementation of CSR should be viewed just like any other management task that needs: a plan, actual implementation, a systems check and then adjustments to the system as required. He urged companies to look at their Corporate Community Investment (CCI) as a factor of their firms’ Return on Investment (ROI) for the wider society. He suggested that they develop a CCI scorecard which would help paint a clear picture of an organisation’s CSR efforts. “If a company is going to spend money, it has a duty to get the best possible ROI in terms of the people it has helped,” Dr. Frost said.
Grameen’s Mr. Wei then spoke about “Strategic Partnerships for Real Impact” in which he shared the Foundation’s experience in building corporate alliances that have helped those in need by utilising micro-financing and other methods of empowerment. The important factors, he stressed, involve identifying the right business solution, correctly measuring the impact of actions taken and practicing effective project management.
Environmental risks
Day Two of the forum also included Workshop B which explored “Integrating CSR into the business process of the company” through three smaller discussions. One sub-meeting looked at “Environmental risks: Why is environmental compliance important for a company’s overall strategy”. The panellists were Chief of International Affairs for China Foundation for Desertification Control Mr. Elton Chen and Managing Director for Environmental Resources Management China Dr. Wang Yong. The discussion was chaired by SynTao's Dr. Guo. Mr. Chen focused on the topic of “Environmental risk vs. corporate strategy” in which he drew attention to the four biggest environmental issues worldwide (climate change, desertification, the biodiversity issue and pollution) and gave examples of ways in which corporations and individuals can get involved. Firms, he said, could participate in projects, make donations, and offer technological or informational support. Volunteering, making donations and passing on information to their friends were ways in which he said individuals could be helpful.
CEIBS Dean and Vice President Rolf D. Cremer.
In his address entitled “The first step of CSR - compliance with evolving China environmental legislation”, Dr Wang focused on emerging issues, environmental legislation trends in China, enforcement, and implementation strategies. He pointed out that compliance, the first step in CSR, is far from easy. Dr Wang told the audience that Chinese environmental legislation - though it varies across the country - is increasingly in line with international practices. In addition, he said, more companies were starting to go the extra mile, not merely complying with the rules.
Supply chain CSR
Another sub-meeting focused on “Supply issues: How to manage the supply chain from first contact to delivery”. Chaired by CSR Asia’s Dr Frost, the panellists were Adidas’ Regional Manager of Social & Environmental Affairs for South East Asia, Mr. Barry Tang and OTTO Asia’s CR Representative, Ms. Maren Boehm. Mr. Tang shared Adidas’ key principles and outlined how it manages risk and protects its reputation. One important factor is the company’s zero tolerance approach to critical, life threatening health, safety and environmental concerns; and repetitive and systematic abuse. The OTTO Groups’ Ms. Boehm noted that the issue of social responsibility in the textile industry is becoming increasingly important. After giving examples of her company’s active approach to issues such as: “the corporate principle of sustainability”, she wrapped up by telling the audience about the importance of a social management system (SMS). The SMS, she explained, integrates all players in the social programme by means of quantifiable goals and reporting duties; transfers more responsibility into the markets; creates more transparency by specifying procedures, responsibilities and reporting obligations; creates additional capabilities in the most important markets; and includes a train-the-trainer programme.
Evolution of marketing
The day’s third workshop focused on “Marketing & communications: How to integrate CSR into the business process and ensure effective communication”. The first speaker was Associate Director for Corporate Responsibility Asia at APCO Worldwide, Ms. Felicia Pullman. Within the context of integrating CSR into the business process and ensuring effective communication, she posed and answered three main questions: “What would successful integration look like?” “What are the key barriers to integration?” and "How do we get around them?” The ideal picture of integration, she explained, included decision making, accountability, innovation and stakeholder engagement. Among the barriers that Ms. Pullman identified were: the tendency to relegate firm’s communications departments to superficial roles; and excluding them from the decision making process. Getting past these hurdles, she explained, would involve steps such as accepting that change will take time and getting senior leadership to buy into the idea of CSR.
Bayer’s Bill Valentino then spoke about how marketing has evolved, as CSR has become increasingly important. "The face of marketing has evolved to integrate CSR," he said. “It’s about value (the tangible result a customer gets from a product) versus values (socially responsible measures of a firm). How do we balance the two? That’s marketing’s function.” He added that marketing and CSR are now inextricably linked as companies try to understand customers’ needs beyond the mere material goods.
Long-term view
Workshop C, entitled “From talking about CSR to building responsible competitiveness” was broken down into two sub-meetings. CEIBS' Prof. de Bettignies chaired one session that examined “Corporate compliance & employee engagement programmes: How to ensure compliance and active engagement through each department”. The panellists were Jones Day Attorney at Law, Ms. Alexandra Belaud-Guillet and Bayer’s Bill Valentino.
DLA Piper’s CSR Manager for Asia, Clare Pearson chaired the second sub-meeting on "Core resource CSR & sustainable development: using your company’s core resources to ensure long term achievable results for your company”. The Grameen Foundation’s Wei Wei and CSR International’s Wayne Visser were the panellists. In his address, Dr. Visser spoke about the challenges faced in achieving sustainable development. He traced the evolution, over the last two decades, in responsibility and sustainability and examined how CSR has been integrated into all segments of corporate life. “Ensuring long term achievable business results through sustainable development will require a metamorphosis from Corporate Social Responsibility (CSR 1.0) to Corporate Sustainability & Responsibility (CSR 2.0),” he said.
As the forum drew to a close CEIBS’ Professor de Bettignies, who took audience members on a quick review of the wide range of topics covered over the two days, spoke of the “complexity and multidimensionality of CSR”. He said, "When we talk about CSR, we may want to ask the question not only of how to implement it, but why. It is because profit is a means, not the purpose of an organisation; an organisation’s aim is for the service of people, of society.” Prof. de Bettignies’ hope that the discussions are continued during future forums was shared by CEIBS Dean and Vice President Rolf D. Cremer. CEIBS, Prof. Cremer pointed out, was playing a role in fostering CSR through its mandatory MBA courses that explore ethics and responsibility in business and he thanks forum organisers and participants for the role they had played in the discussions. "Thanks to all who came to spend two days with us on these very important topics,” Prof. Cremer said.
The forum was organised by the European Chamber of Commerce in China, and the Europe China Centre for Leadership and Responsibility (ECCLAR) at CEIBS. Sponsors included John Crane, novozymes, Total, and Volkswagen while the media partners were China Contact, China CSR, CSR Asia and that’s Shanghai.
