Study: China’s CSR reports need improvement

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By Pang Qi

ImprovementGlobal Times reported that China’s Social Resources Institute (SRI) has criticized the country’s Corporate Social Responsibility (CSR) reports, saying they lack credibility, in a new study released by SRI and Global Sustainable Leaders Forum on Wednesday.

The study – called “Road To Transparency: the Current Situation, Tendency and Challenges of CSR Reports in China” – states that most CSR reports are not based on sufficient communication with company stakeholders, and they thus do not adequately reflect stakeholders’ expectations.

In addition, most CSR reports do not include the details of stakeholders, but instead refer to general categories such as government, suppliers, or clients.

Zheng Wei, senior project manager of CSR Asia, suggests that report makers should link CSR reports to the interests of stakeholders. “A report maker should understand the expectations of various stakeholders of your company,” said Zheng, “The earlier you learn your stakeholders’ expectations, the more attractive and effective your CSR report is.”

Wang Xuezhu, who specializes in inspecting CSR reports at Det Norske Veritas – a provider of services for managing risks – also called for more participation of stakeholders in the compilation of CSR reports.

SRI found that the reports concentrate on a company’s contribution to society – but do not reveal how much government support they receive.

Li Zhiyan, the director of SRI, said that the companies “especially the large ones, pay tax to the government and get fat governmental subsidies as payback, yet they only present the tax they paid but provide little reference on what they gain from government; this should be improved in the future”.

CSR reports only rarely mention the environmental and social risks such as water pollution, increased energy consumption, people receiving only inadequate compensation and moving to other areas after their homes are demolished, and the health and safety of manual laborers.

And SRI found that companies pay much more attention to economic risks rather than those related to the environment and society.In the CSR reports that SRI reviewed, few companies mentioned their participation in public policies and anti-monopoly actions – and they also did not allude to their efforts to combat corruption.

According to SRI’s study, only 28 CSR reports last year were inspected and investigated by a third party – or only 5 percent of the total amount of 2009 CSR reports in China. And most of them were companies directly under the central government, rather than private enterprises.

“A CSR report without a third-party inspection is no more than a company brochure”, said Wang, as he called on companies to invite third parties to supervise their CSR reports.

But SRI said that, even if the companies invited a third party to investigate, most are conducted at the level of their headquarters.

Wang Xuezhu said that many CSR reports in China are brought about by the authorities or the stock exchange, and not by the companies.

And both Wang and Bei Xiaochao, the CSR manager at Baidu Corporation, called for companies to actively seek to participate in reports.

From 1999 – when the first CSR report appeared in China – to 2009, the number of CSR reports a year has increased to 533, and could reach 700 this year.

(Sourced from http://china.globaltimes.cn/society/2010-11/596632.html )

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