Survey on Corporate Citizenship in Hong Kong ( )

2 The CSR Study Background The Committee on the Promotion of Civic Education, HAB commissioned the Centre for Civil Society and Governance, HKU and Policy 21 Ltd., HKU to find out the understanding and practice of CSR among commercial establishments in HK. The Committee on the Promotion of Civic Education, HAB commissioned the Centre for Civil Society and Governance, HKU and Policy 21 Ltd., HKU to find out the understanding and practice of CSR among commercial establishments in HK. The study consisted of focus group discussions, interviews, and a territory-wide questionnaire survey The study consisted of focus group discussions, interviews, and a territory-wide questionnaire survey

3 The CSR Survey Using a multi-wave, multi-contact approach, questionnaires from commercial establishments were collected between November 2006 and April Using a multi-wave, multi-contact approach, questionnaires from commercial establishments were collected between November 2006 and April Response rate: 61%. Response rate: 61%. Sampling error : +/- 1% Sampling error : +/- 1%

4 Four Dimensions of CSR The study examined a company’s continuing commitment to: 1. Improve the well-being of its employees and their families; 2. Minimize negative economic, social and environmental impacts on society; 3. Behave ethically in operating its business; and 4. Contribute positively to society.

5 Highlight of Findings 1. Less than a quarter of the companies were aware of the term CSR (23%).

6 Highlights (cont’d) Highlights (cont’d) 2. Only a small minority of the companies (9%) were both aware of CSR and had CSR institutional mechanism Institutional CSR mechanism includes: Institutional CSR mechanism includes: CSR audit or stakeholders dialogueCSR audit or stakeholders dialogue CSR reportingCSR reporting overseeing CSR practices by a designated person or committeeoverseeing CSR practices by a designated person or committee communication of CSR mission to employeescommunication of CSR mission to employees formulation of the CSR concept and setting up of CSR targetsformulation of the CSR concept and setting up of CSR targets

7 Highlights (cont’d) 3. Among the establishments that were aware of CSR, more establishments tended to take at least one measure than those that did not take any measure At least one measure No measure Better employee benefits 26%11% More environmental protection measures 24%12% More anti-discrimination measures 34%22% Better customer service policies 24%19% Higher contribution to society 29%14%

8 Highlights (cont’d) 4. There was broad acceptance of CSR principles Support for continuing commitment in terms of Support for continuing commitment in terms of –ethical business operation (83%) –minimization of negative impact (81%) –improvement of staff’s well-being (68%) –contribution to society (62%).

9 Highlights (cont’d) 5. Companies were generally motivated to implement CSR Three out of four companies (76%) believed that they could benefit from CSR in the long run. For example, they held that Three out of four companies (76%) believed that they could benefit from CSR in the long run. For example, they held that –increased staff benefits could be offset by improved efficiency (73%) –higher staff benefits reduced staff mobility (77%) –could improve the team spirit through participation in volunteer work (69%) –image could be enhanced by implementation of environmental protection measures (66%) or contributing to community (67%)

10 Highlights (cont’d) CSR motivation cont’d Highlights (cont’d) CSR motivation cont’d Some aspects of CSR have been internalized to become a company tradition Some aspects of CSR have been internalized to become a company tradition –ethical business conduct (88% held that providing safe and quality goods and services was an obligation; 84% said fair treatment of customers was a corporate value) –64% said environmental protection was part of the company’s corporate mission –61% stated that equal opportunity concerning the employees was part of the company’s corporate culture

11 Overall picture: CSR practices Ethical business operation Ethical business operation –Customers: very good; policies/mechanisms to:  Provide clear & precise price information(86%)  Protect customer personal data (80%)  Provide quality after sale service (77%)  Provide full & accurate non-price information (74%) –Suppliers: unsatisfactory; policies/mechanisms to  Ensure suppliers comply with the law (31%)  Ensure suppliers have taken steps to protect the environment (18%)  Ensure suppliers have good employment practice (16%)

12 Overall picture: CSR practices Minimization of negative impact Minimization of negative impact –Environmental protection: rather good  95% have certain environmental protection policies or measures  Gas & electricity conservation measures (71%)  Water conservation measures (65%)  Reduction of plastic bags consumption (63%)  Keeping air-conditioned room at 25.5 °C (61%)

13 Overall picture: CSR practices Minimization of negative impact Minimization of negative impact –Anti-discrimination guidelines: poor, in recruitment and employment  No stated guideline or adopted measure against discrimination (74%)  Have both guidelines and measures (9%)  Only have stated guidelines (7%)  Only have adopted measures (10%)

14 Overall picture: CSR practices Employees’ welfare: moderate Employees’ welfare: moderate –Regular workplace safety review (65%) –Discouragement of long working hours (62%) –Regular salaries and benefits review (58%) –Encouragement of continued education & training (48%) –Provision of medical insurance & benefits (48%) –Provision of in-house training or subsidies (40%) –Organization of recreational activities for staff & families (25%) –Provision of benefits for staff’s family (15%)

15 Overall picture: CSR practices Social contribution: unsatisfactory Social contribution: unsatisfactory –18% made monetary donations in last 12 months –14% provided non-monetary support –15% encouraged staff to contribute (giving recognition, organized company-wide participation, allow time-off) –37% were without any of the above three types of social contribution

16 Overall picture: Perception of CSR Duties Importance of CSR principles: Importance of CSR principles: –Ethical behavior (83%) –Minimization of negative economic, social, and environmental impacts (81%) –Improvement of employees’ welfare (68%) –Social contribution (62%)

17 Overall picture: CSR incentive structure Internal incentive structure appears to be more effective than external incentive structure in the provision of CSR policies or measures. Internal incentive structure appears to be more effective than external incentive structure in the provision of CSR policies or measures.

18 Overall picture: Role of the government Take the lead by implementing CSR (84%) Take the lead by implementing CSR (84%) Provide help and training (76%) Provide help and training (76%) Develop CSR charters for companies’ reference (78.0%) Develop CSR charters for companies’ reference (78.0%) Raise CSR incentive through Raise CSR incentive through –Giving public recognition (78%) –According preferential treatment (71%) –Providing tax incentives (69%)

19 Difficulties facing good CSR SMEs From follow-up interviews with SMEs that have good CSR practices: From follow-up interviews with SMEs that have good CSR practices: –General context was not enabling –CSR practices were dependent on effort of managers –External & internal incentives were lacking –Shortage of resources & readily available guidelines

20 Conclusion Duty-based action – compliance with basic ethical norms or legal measures Duty-based action – compliance with basic ethical norms or legal measures Beyond duty-based action: Beyond duty-based action: –Profit-based; practice CSR only when it helps commercial interests –Weak in positively contributing to employee welfare or society in general (beyond the call of duty) Government is expected to take the lead Government is expected to take the lead

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