China Using CSR to Achieve Global Competitive Advantage

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CSR1By VIKAS VIJ

BEIJING : Much like the rest of the corporate world, Chinese companies embarked on their CSR journey somewhat reluctantly, following a variety of societal and market pressures. However, they seem to be learning more quickly than many of their western counterparts that their futures are inextricably linked to their CSR performance, and have begun viewing it as a potential competitive advantage. China has understood that in the prevailing global political and economic landscape, CSR will help the country to become a leader, not a follower.

 

Chinese businesses have continued to expand globally over the last decade in terms of sales and financial assets, but the spotlight has increasingly been on their CSR performance. As a result, leading companies from China have been compelled to make a fundamental shift in their strategic thinking. Today, these companies, which seek to become globally reputable brands, view CSR as a critical element of their transformation.

According to the United Nations Global Compact, several Chinese business leaders believe that being on the Fortune 500 list is not enough to maintain competitiveness in global markets, and that their companies need to evolve in the arena of CSR if they are to achieve their ambitious goals. With the growing presence of Chinese companies internationally, the host countries too, increasingly expect them to contribute meaningfully to their sustainable development objectives.

For instance, in Africa, Chinese companies are often negatively perceived as neo-colonialists. To counter this negative image and disconnect from local communities, some of the leading State-Owned Enterprises (SOEs) – including Sinosteel, Sinopec, China Minmetals and CNPC – have begun to publicly disclose their social investment and impact in Africa through their CSR reports with committed efforts to address and showcase sustainability activities in the region.

Global Chinese companies are adopting a bottom-up approach not only to strengthen government relations with the host country, but more importantly, to forge long-term relationships with local residents, nonprofits and other stakeholders. An increasing number of Chinese companies are proactively leveraging two-way communications to respond to stakeholder concerns instead of remaining silent.

Some of these companies have established an “Open Public Day” when stakeholders and general public can visit the company and communicate their concerns and suggestions on their operations. A more open corporate culture has allowed CSR to further embed itself as a critical part of their businesses, particularly in cases where they aspire to succeed abroad.

(Vikas is a staff writer for the Sustainable Development news and editorial section on Justmeans)

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