I had a fascinating dinner with Richard Welford, director of CSR Asia, and Alan Vandermolen, Edelman’s president of Asia-Pacific region, on Sunday night in Hong Kong. We spent two hours on corporate social responsibility, one of my favorite topics. I have also just come from Beijing, where I met with several global companies grappling with the same set of issues. Here are some observations from these experts:
1) The top of mind CSR issue in Asia remains labor, though the environment is important and becoming ever more so.
2) The environment continues to deteriorate. There is concern that the air in Hong Kong carries significantly more pollutants than other major cities such as New York and London, and may led to an increasing number of respiratory diseases (http://en.wikipedia.org/wiki/Air_pollution_in_Hong_Kong). Parents now check the smog forecast and keep children from playing sports on weekends.
3) Government is beginning to move on environmental issues. Smoking in public areas and idling of taxis is now banned in Hong Kong. The central government in China and the provincial government in some provinces like Shenzen are lowering emissions by forcing a switch from coal to natural gas (national target on utilities is decline in use of coal from 70% of total to 40% by 2020). China is developing its own version of Europe’s ISO 26000, which may include reporting standards on environment and labor. Indonesia’s Parliament has just passed a law making CSR mandatory for companies.
4) Chinese companies are beginning to consider CSR, especially those with serious global competitors (such as Haier, China Southern Airlines). Chinese companies are moving faster than most Hong Kong companies in this area
5) Global NGOs are now more open to relationships with business in Asia, willing to cooperate on specific projects or industry standards. Local NGOs are often partnering with Global NGOs on these projects.
6) China has passed an employee protection law (the ECL) which goes into effect on January 1, 2008. It guarantees a minimum wage and prompt payment of salary. This will be a challenge for retail, especially fast food.
7) Some part of positive public response to NGOs bashing of multinational companies (especially American) is based on protectionism and nationalism. When a six year old cut her nose on a straw dispenser at McDonalds, the local media complained about the inadequate compensation offered the family. There is notable anti-US feeling in India and Korea. In India, Welford said that NGOs are using the same logos and materials today as used in the effort to oust British companies in the 1940s.
8) Blogs and bulletin boards tend to focus on labor issues. One such case that made huge news in the Chinese blogosphere is the Korean factory manager who found an employee smoking in a textile factory, banished him outdoors to stand in the sun, then forgot about the employee until he was found passed out from sun stroke.
9) Global NGOs will likely not make the Beijing Olympics a huge stage for protest. There is a higher likelihood of European NGOs, such as the Dutch NGO Fairwear Foundation which monitors the textile makers, engaging China’s media. One issue that might be raised is China’s non-intervention on Myanmar.
10) The local media is somewhat interested in CSR, but there are profound differences by market (high interest in China, especially the government run China Daily, low in Singapore, medium in Hong Kong though highest in English media such as South China Morning Post)
11) China is not willing to cut CO2 emissions until the country’s median income reaches the average for the world (that is $5,000, or twice the present level in China of $2,500)
12) There is nascent dissatisfaction in local communities in China on environment. New chemical plants have been thwarted by community protest.
That is all for now. It is time for the jet lagged blogger to hit the sack. I would appreciate your views.