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November 5, 2007
CSR in Asia: An Update
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.
Posted by Edelman at November 5, 2007 10:41 AM |
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Comments
Britain was once known as 'the workshop of the world'. That was in the middle of the nineteenth century and there were problems with growing cities, air quality and sanitation, long hours and child labour. (Victorian novelists like Elizabeth Gaskell depict the age well).
Clean air in Britain cane with the decline in industrial production in the later twentieth century and the move away from coal for domestic heating (and power stations).
China is now the workshop of the world and repeating much of this pattern. Their industrial boom and growing economic power comes at a price that appears inevitable unless the lessons of history can be learnt and their economic strength can be used to skip a generation of dirty industrial technology. Unlikely while labour is cheap.
Posted by: Richard Bailey at November 5, 2007 12:12 PM
I think it's wonderful that companies and the government, especially in large countries like China, are beginning to realize the importance of social responsibility. Social responsibility is going to become evermore important in the years to come, especially considering the current state of the environment. Organizations are going to have to "go green" in a sense or lose the respect of its publics. PR practitioners need to urge their clients to be more socially responsible in order to build better relationships with their communities.
Posted by: Abbey Swank at November 5, 2007 1:50 PM
Great post. Did you see any evidence of Chinese companies developing CSR programs to address a growing US backlash against Chinese made products? I think this may be a huge issue as we head into the holiday season.
Posted by: Josh Morgan at November 5, 2007 7:00 PM
That reminds me of the year I was in school in the US at the University of Redlands in Orange County, CA. The LA smog would come up the valley and sometime after lunch it would be really unpleasant to play football or do any exercise. I also lived in Singapore as you know for a few years and that isalnd was (and still is ocassinally, I think) affected by the wood fires in the forests of Indonesia. For weeks on end the smoke would settle over the island and exercise was impossible and the health of many was affected. So it's not just Hong Kong, but it is a big issue.
Posted by: David Brain at November 6, 2007 5:17 AM
Hi Richard,
Jumped onto your site to better understand how progressive you are in China and was pleasantly surprised to read your blog regarding CSR on this side of the water (I am based in HK running a real estate private equity business). Actually, Rhea McGraw is a good friend of mine and she had also shared with me her views on the same not that long ago.
We're facing a CSR issue on an environmental front in Northern China. We're looking at developing an industrial / business park there and have retained EDAW (a world class urban planner) to help us come up with a progressive master plan. The challenge we face is attempting to be environmentally sensitive in our design is the risk of sticking your head up above the bunker. For many environmentalists a small step is not better than no step at all - it is an unacceptable compromise.
I find myself instructing the planners to come up with "green" alternatives such as designing for energy efficiency, but (after advice from another friend who volunteers for an environmental group)have decided against making any sort of representations as to being a "green"(er?) business park. For those businesses that think it is important, we can show them the efforts we have made, but also wouldn't want them to tout having chosen a greener alternative.
If everyone made one small step forward it is still a step in the right direction, and empirically raises the overall standard. Moreover, one might argue the greater accomplishment is the awareness that one helps improve by talking about their efforts - however small.
Thanks for sharing your thoughts in your blog and for contributing to the awareness of this important issue.
Best Regards, Tyler
Posted by: Tyler Goodwin at November 6, 2007 7:25 AM
Dear Mr Edelman,
I am from Hong Kong. Great to learn that China is taking initiatives to address the environmental issues. Whatever happens in China will have an impact on Hong Kong. If China can take bold steps in the right direction, Hong Kong as a special administrative region (HKSAR) of PRC can do the same. It appears that what both Government and some corporations are doing now are for cosmetic PR purposes. However, as far as I know, some companies in the construction sector are doing concrete things in terms of green building and energy efficiency silently. I think they need communications agencies like Edelman or any other PR firms to help them communicate and broadcast their efforts in order to persuade the government and the public that CSR is doable ! CSR is very much a political issue. By the way, HKSAR Government is just taking steps to consult the public on banning idling cars.
Best wishes .. so next time you come to HK, hope you can take Batman together to take a plunge into Victoria Harbour.
Posted by: Scott Cheng at November 7, 2007 11:48 PM
Hi Richard. Hope all is well with you. Looks like you haven't slowed down a bit in nearly 30 years. Your blog reminds me of some of our early Asian clients, who shall go unnamed. Hope you folks and family are well. Drop me a line when you've recovered from jet lag; would love to catch up.
Steve
Posted by: Steve Cook at November 9, 2007 12:11 PM
Hi Richard,
The debate sounded really intereting and it was great to see you this side of the world again. Thought you might be like to see Edelman Korea's just-published white paper on CSR in Korea, which as you know has its own particular quirks.
Either through:
http://corporati.wordpress.com/2007/11/15/edelman-koreas-position-on-csr-in-korea/
or:
http://www.edelman.co.kr/web/insight/news/upload/CSR_in_Korea_English_Version.pdf
Posted by: Keith Morrison at November 15, 2007 2:01 AM