Professor Diana C. Robertson Beijing, China June 13, 2009

2005

2006

2007

2008

 What is Corporate Social Responsibility (CSR)?  What’s the case for (and against) CSR?  Debate: Global standards of CSR  What can we learn about best practices of CSR in China?  What’s the future of CSR?

 A firm’s efforts to further a social objective, also known as corporate citizenship, triple bottom line, sustainability  Normative and business cases for CSR  Philanthropy  Stakeholder model  Strategic model –creating value

Company Mass media Special interest Groups Private sector Political parties International Organizations Pressure groups Local communities NGOs Customers Professionals Employees Governments Suppliers Corporate management Shareholders Slide Compliments of Klaus Leisinger, Novartis Foundation 8

Page 9  Building reputation  Attracting customers  Attracting and retaining employees  Attracting investors

Page 10  Milton Friedman’s argument that the “business of business is business”  The firm exists to benefit shareholders  CSR does not contribute to the bottom line

Page 11 “A simple compilation of the findings [from 127 empirical studies over the past 30 years] suggests that there is a positive association, and certainly very little evidence of a negative association, between a company’s social performance and its financial performance.” Margolis, Joshua D., and James P. Walsh, Misery Loves Companies, Administrative Science Quarterly June 2003

PRO Yes, firms should adopt global standards --and here is what they are. CON No, firms should not adopt global standards--only country standards—and here is why.

 A strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption ten universally accepted principleshuman rightslaborenvironmentanti-corruption  6200 participants, including over 4700 businesses in 120 countries around the world  1147 participants in Asia (20+ countries)  201 participants in China (7 in FT 500)

An overarching framework to measure progress in reducing global poverty Growing Inclusive Markets Initiative:  Launched in 2006  Promote the private sector as a resource for investment and innovation to achieve the MDGs

 Field research on the meaning and nature of CSR in three very different economies  Singapore -Enlightened self-interest model  Turkey-Philanthropy  Ethiopia-Partnerships with NGOs  My conclusion: CSR looks very different and should be tailored to a country’s economic and social needs.

 “Golden Bee CSR China Roll” sustainability awards (China WTO Tribune magazine)  A total of 60 companies including:  Lenovo  Haier  Pepsi  Eaton  Novartis  Sony

 Donated money and resources to help set up 18 “Hope Schools” in rural China.  Funded tuition fees for promising college students

 Disaster relief – Sichuan Earthquake  30,000+ food deliveries  Monetary donation to relief effort

 Hope through Entrepreneurship  Bottom of the Pyramid (BOP) Investments: exploring new products and new business models that bridge the digital divide

 The only representative from Asia to be invited to the 7th meeting of the parties to Montreal Protocol  Award-Winning, Environmentally-Friendly Products

Minsheng Bank  China Poverty Reduction  SA 8000 accreditation  Awards:  2006: “2005 Contribution Award for Poverty Reduction” and the title of “Most Respected Enterprises in China” and the award of Top 100 Excellent Enterprises in China’s enterprise social responsibility survey  2007: nominated for the “2006 China Charity Award”  2008: “2007 Special Award for China Poverty Reduction” issued by China Foundation for Poverty Alleviation.

 Green Credit Policy  Serving the Community  People's Award for Social Responsibility  2008 Best Corporate Citizen

 Ideally integrated with the core business  Compensation and control systems must be aligned with CSR  Should include specific objectives, timetables, and metrics to track progress  Leadership is key  CSR is motivating and contagious

 Increased social entrepreneurship  Bottom of the pyramid (BOP) initiatives  Greater focus on microfinance, microinsurance, micro health care insurance  Increased NGO-government- corporate partnerships