How Foreign Companies Can Contribute to China’s Evolving CSR Landscape

As part of a push for high quality development, the Chinese government has increased calls for sustainability and environmental protection under the umbrella of “green development.” Under this context, an increasing number of socially responsible domestic businesses have emerged to demonstrate their role in supporting government priorities. A look at these companies’ CSR strategies provides a valuable insight into how foreign enterprises can contribute to China’s social and economic development goals.

The Context: China’s Push for Sustainable Development

Sustainable development has become a strategic priority in China in part because of national plans to embrace the United Nations’ sustainable development goals. In June 2019, President Xi Jinping highlighted sustainable development as the “golden key” to solving global problems at the St. Petersburg International Economic Forum in Russia.

Although China has a much shorter history of national sustainability policy and international cooperation compared with more developed economies, especially in the private sector, the country has made significant strides in developing green initiatives in recent years through top-down policy action. China’s 2020 Pollution Action Plan has played a significant role in improving air quality in major Chinese cities, requiring large reductions in total emissions of major pollutants in coordination with reduced greenhouse gas emissions. Beijing has also written poverty alleviation and rural revitalization strategies with sustainable development in mind, including a push to adopt greener supply chains and invest in sustainable practices. Environmental considerations are also a major factor in elevating overall public health in advance of President Xi’s Healthy China 2030 vision.

At the same time, these shifting priorities have driven major changes in local cities to promote green development at the grassroots level. For example, a new waste sorting and recycling regime aimed to tackle China’s mounting waste problem was recently rolled out in Shanghai before launching in 45 additional cities in 2020.

The Examples: Green initiatives From China’s private sector

In recent years, Chinese corporations have taken creative and innovative approaches to CSR initiatives that support sustainability and development efforts. Initiatives leading the way include:

• Ant Financial – Ant Forest: Ant Forest, a green initiative by Alibaba-affiliated Ant Financial Services Group, demonstrates how enterprises can provide innovative solutions by leveraging the power of digital technology. Launched within the e-wallet app Alipay, the mini-program encourages users to reduce their carbon footprint through environmentally friendly decisions and converts those actions into points accumulated for tree-planting. Alipay boasts that over 400 million users joined the Ant Forest program by the end of 2017, planting more than 55 million trees. Ant Financials’ initiative was awarded the 2019 UN Champions of the Earth award for inspiring sustainable actions.
• Meituan – Blue Mountain Project: Launched in 2017 by Meituan’s successful food delivery service business, the Blue Mountain Project tackles the issue of packaging waste in the food delivery industry. Customers and merchants are encouraged to actively reduce, reuse and recycle food packaging. By 2020, Meituan hopes to reach 100,000 merchants. The project’s incorporation of sustainable practices into daily business operations demonstrates how companies integrate social responsibility into their corporate strategies and business development.
• Yili Group – Biodiversity Protection: Dairy producer Yili Group’s biodiversity conservation efforts date back to 2007, when it first committed to building a sustainable supply chain. In 2018, Yili Group became the first Chinese enterprise to sign the Commitment Letter of Enterprises and Biodiversity of the United Nations Convention on Biodiversity. The signing represents the group’s ongoing efforts to cultivate biodiversity in China and develop technologies to optimize production methods and facilitate ecological restoration.

The Opportunities: How Foreign Companies Can Position Themselves

In a similar vein to the domestic champions above, foreign enterprises should align their local CSR strategies to the Chinese government’s rapidly developing sustainability goals. This not only allows these companies to give back to and strengthen their relationships with their local communities in China, but also bolsters their credibility in the eyes of key government stakeholders and lays the foundation for policy advocacy. By bridging sustainability efforts with the local or national government agenda, companies can leverage their resources to strengthen community relations and maximize their stakeholder engagement.

Several major government policy initiatives lend themselves particularly well to CSR projects by foreign companies:

• Poverty alleviation and rural revitalization:Consider ways to demonstrate sustainability in corporate decisions related to supply chain management and resource distribution. Find ways to mobilize and bring development opportunities to rural areas.
• Air, water and soil pollution: Companies from various sectors, but especially those in manufacturing and textiles, can take actions to reduce their overall carbon emissions and promote climate change awareness.
• Healthy China 2030: Raise awareness of specific health issues like chronic lung disease, diabetes, that are significantly impacted by the environment. Companies in various sectors can encourage healthier and more sustainable lifestyles with the adoption of greener practices. They can also contribute by emphasizing their commitment to employee welfare and company culture.