a mindset for csr and sustainable development in china (2012)

A Mindset for Corporate Social Responsibility and Sustainable Development in China

BILL VALENTINO 华威濂

INTRODUCING SOME BIG IDEAS !!!!!

ABOUT Me …………..

BILL VALENTINO 華威濂

• Adjunct Professor International • Communications

• Professor

• Deputy Director China Institute for Social Responsibility - School of Social

• Development and Public Policy

• Retired July 2011 – VP Corporate Social Responsibility (China 1987 2011)

SOME MORE ABOUT ME …………..

Thunderbird School of Global Management MBA

Communications, Computing and TechnologyInstructional Design and Media/Adult Learning MA

A CHALLENGE FOR EDUCATORS!

The challenge is to prepare this next generation for what promises to become a labor market where every job will depend on sustainability, collaboration and the creation of social, environmental and economic value.

A CHALLENGE FOR EDUCATORS!

the greatest barrier that companies and the government will encounter is the shortage of a workforce with knowledge and training in CSR, sustainability, entrepreneurship, social innovation, philanthropy and knowledge how to manage public private partnerships and non-for profit organizations..

A PROGRAM FROM BNU TO MEET THAT CHALLENGE

BNU’s MPA China Development CSR curriculum to train a “CSR, Sustainability, and PPP literate” workforce that is critical to long-term development, the private sector’s integration into society and the development of meaningful employment opportunities for this discipline.

CSR in China

CSR AND SUSTAINABILITY CHINA

!

A BALANCING ACT IN CHINA !

CSR in China

China is rapidly evolving and is asserting its leadership over the sustainability agenda on the international economic and policy stage.

As China’s influence in international markets and on the global policy stage increases active engagement in CSR in China offers an opportunity to influence one of the most powerful forces shaping the landscape for global business and sustainable development.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

WHY CSR IN CHINA MATTERS

CSR in China

The struggle for balance is analogous to a struggle for order and harmony.

Confucian thought that sees the establishment of an universal order as the ultimate purpose

CSR in China

Environmental & Social

Development

EconomicDevelopment

A single-minded pursuit of economic growth and opening-up over the past three decades has had huge benefits but also huge costs.

CSR in China

PEOPLE PLANET• the widening gap between rich and poor• an income gap between interior areas and

coastal regions • an income gap between urban and rural

populations • unemployment• poverty• corruption• poor labor conditions• an inadequate health-care system,

• pollution and extensive environmental deterioration

CSR in China

科学发展观Scientific Outlook on Development

putting people first and aiming at comprehensive, coordinated and sustainable development.

CSR in China

A “Scientific Outlook on Development”

CSR – Harmonious Society

Scientific Outlook on Development

Harmonious Society

A people-centered society,

A shift in the focus from "economic growth" to "social harmony".

CSR in China

和谐社会Harmonious Society

the idea changes China's focus from economic growth to overall societal balance

CSR in China

THE ANALOGY OF A STOOL WITH 3 LEGS

Balance = Sustainability and Stability

CSR in China

A STOOL MISSING 2 LEGS

Imbalance = Unsustainability and Instability

Environmental Stewardship & Social Development

CSR in China

平衡 – BALANCE

Harmonious Society

CSR in China

Deng Xiao Ping Sun Yat-sen University, Marxism / Philosopher

Jiang Zemin Shanghai Jiao Tong University Electrical Engineer

Hu Jun Tao Tsinghua University –Hydraulic Engineer

Wen Jia BaoBeijing Institute of GeologyGeologist & Engineer

China’s Leaders – Left Brain TrainedCSR in China

Xi JinpingTSINGHUA UniversityChemicalEngineer

CSR in China

3 DECADES OF PHENOMENAL ECONOMIC GROWTH AND DEVELOPMENT

HARMONIOUS SOCIETY WITH CONTINUED ECONOMIC GROWTH AND DEVELOPMENT“SCIENTIFIC OUTLOOK ON DEVELOPMENT”

CHINA 1978 ------------------2012

CSR in China

CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY

BALANCE = ECONOMIC PROGRESS WITH SOCIAL & ENVIRONMENTAL PROGRESS

BALANCE PROFITS + SUSTAINABLE BUSINESS TO ACHIEVE STABILITY & A SUSTAINABLE FUTURE

Conceptual = Harmonious

CSR in China

稳定 不稳定 Stability Instability

1. China’s rapid economic rise has led to social and environmental challenges that must be addressed to avoid weakening the nation’s ability to sustain economic growth and development progress in decades to come.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

2. The role of business in addressing these challenges is increasingly recognized and is reflected in the call for, and practice of,

corporate social responsibility (CSR).

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

3. CSR in China has evolved rapidly beyond its roots in philanthropy and compliance. For large companies, CSR is increasingly a strategic concern, addressing issues such as employee management, product quality, governance, and human rights.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

4. Drivers of CSR in China are also shifting toward becoming embedded in China’s own global brand and way of doing business.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

5 Domestic Chinese pressure is rising for CSR. Chinese citizens are increasingly finding ways to express collective displeasure over perceived poor corporate practices.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

6 Chinese businesses are raising the bar for competition as they work to meet

international standards of responsibility as part of their strategy for moving up the value chain.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

7. The most important driver in recent years has been the increasingly close relationship

between CSR and public policy. The Chinese government has embraced CSR as a tool to help address social and environmental issues resulting from rapid but uneven economic transition.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

8. CSR will continue to evolve rapidly, with pressure from the state and, increasingly, from citizens. A significant dynamic to watch will be the interaction between pressures from the state and from citizens mobilizing, for example,

through new social media.

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

AN OVERVIEW OF CSR IN CHINA:

CSR in China

• Water scarcity and quality • Industrial pollution and greenhouse gas emission • Labor conditions • Product safety• Inequality and economic• Corruption• Access to health care and Public Health• Rural Development

SOURCE: Corporate Responsibility and Sustainable Economic Development in China: Implications for Business Simon Zadk, Maya Forstater, and Kelly Yu , US Chamber of Commerce March 2012

CHINA’S SOCIAL AND ENVIRONMENTAL CHALLENGES

CSR in China

CHINA’S FIRST ENVIRONMENTAL PROTECTION REPORT LAUNCHED ON NOV 29th IN BEIJING

REPORTING – CSR IN CHINA:

CSR in China

Research on CSR Reporting in China (2001-2009) Reveals Four Main Findings

Source: http://csr-china.net/en/

Main findings:Finding 1: Rapid growthFinding 2: Starting stageFinding 3: Significant differenceFinding 4: Huge potential

REPORTING – CSR IN CHINA:

CSR in China

Research on CSR Reporting in China (2001-2009) Reveals Four Main Findings

Source: http://csr-china.net/en/

Finding 1: Rapid growthChinese CSR reports are drawing unprecedented attention as evidenced by the fact that 582 CSR reports in various forms were released in 2009, 3.44 times that of 2008 (169 reports), an exploding growth. This figure is expected to account for about 15% of global total in 2009, as opposed to 5% in 2008.

REPORTING – CSR IN CHINA:

CSR in China

Finding 1: Rapid growth1.Examples of leading enterprises. In recent years, China saw a large number of leading, active corporate players in CSR field, the forerunners and pioneers who drive rapid development of China’s CSR reporting practices.

2. Strong guidance of government policy. The Chinese government pays much attention to implementation of corporate social responsibility by enacting a series of policy documents in recent years encouraging enterprises to publish their CSR reports, which have been well echoed by numerous enterprises.

3. Active promotion of social actors. Shanghai Stock Exchange, Shenzhen Stock Exchange, China Federation of Industrial Economics, China National Textile and Apparel Council and China Banking Association, among others, encourage enterprises to release CSR reports by promulgating guidelines.

4. Raised awareness of enterprises. As enterprises develop a deeper understanding of social responsibility and become more willing to actively implement social responsibility, effective communication with stakeholders through publication of CSR reports has become a first choice for more and more Chinese enterprises.

REPORTING – CSR IN CHINA:

CSR in China

Research on CSR Reporting in China (2001-2009) Reveals Four Main Findings

Source: http://csr-china.net/en/

Finding 2: Starting stageThe overall performance of CSR reporting practices in China is low as about half of reports are still at the starting stage and characterized by inadequate disclosure in depth and breadth, low coverage and internationalization level of reported indicators and a certain gap in responding to stakeholder requirements and expectation and embodying the corporate value.

REPORTING – CSR IN CHINA:

CSR in China

Research on CSR Reporting in China (2001-2009) Reveals Four Main Findings

Finding 2: Starting stage1.About half of reports are still at the starting stage. Of the 541 reports received in 2009, about half are found structurally deficient and very limited in information disclosure, whether in terms of depth or breadth, leading to quite limited communication with stakeholders.

2. Information disclosure is inadequate in both depth and breadth. Disclosure of social performance is relatively good, while disclosure of environmental performance is rather weak, with disclosure of economic performance standing somewhere in between.

3. Low coverage of reported indicators. Most of enterprises give little consideration to the level of information disclosure (must-be-reported, should-be-reported information and to-be-reported voluntarily), with much attention given to disclosure of should-be-reported information and less attention to must-be-reported information and voluntary information disclosure.

4. Chinese CSR reports are below the level of international practice. Only 2.2% of CSR reports under research were prepared in both Chinese and English, 7.8% made reference to Global Reporting Initiative “Sustainability Reporting Guideline “(GRI G3), and 6.1% were verified by independent third-party auditing organizations.

REPORTING – CSR IN CHINA:CSR in China

Research on CSR Reporting in China (2001-2009) Reveals Four Main Findings

Finding 3: Significant differenceChinese CSR reports show significant difference whether in terms of distribution of disclosing enterprises or quality of reporting.

1. Quality of reports varies significantly Level of CSR reporting practice is considerably positively correlated with company size as leading enterprises outperform average companies in CSR reporting practices.Central state-owned enterprises enjoy a much higher reporting performance than the average level of Chinese CSR reporting practices.Reporting performance varies significantly from industry to another, with extraction, financial and insurance and power industries holding the leading position.Growing enterprises and private enterprises indeed published a number of high-quality reports, but most of CSR reports from them await further improvement.

2. A remarkably uneven distribution of reporting enterprises373 reports were released by enterprises in East China, a figure well above the sum in Central and West China.

REPORTING – CSR IN CHINA:

CSR in China

Research on CSR Reporting in China (2001-2009) Reveals Four Main Findings

Finding 3: Significant difference

3. 77 reports were released by State-owned enterprises (SOEs) or state-holding enterprises, which is 70% of the total reports.272 reports were released by manufacturing enterprises, a figure exceeding the sum of reports published by all other industrial sectors.

4. 65 reports, or 85.9% of the total, were released by listed companies. And only 14.1% were released by non-listed companies.

REPORTING – CSR IN CHINA:

CSR in China

Research on CSR Reporting in China (2001-2009) Reveals Four Main Findings

Finding 4: Huge potential Chinese CSR Reporting has a huge potential of development and the number of reports to be published in the next years will rise dramatically, so will the quality of reports, to a level where the value of reports will be fully exploited and reflected.

1.The number of reports will continue rising. In the next years, as Chinese enterprises become more aware of the importance of social responsibility, more and more enterprises will actively release CSR reports.

2. The reporting quality will significantly improve. As the enterprises grow mature, the overall CSR performance of Chinese enterprises will be driven continuously. Enterprises’ ability of writing CSR report will be enhanced and the number of enterprises publishing high-quality CSR reports is expected to rise significantly in the next years.

3. The value of reports will be fully reflected. The important role of CSR report as a channel of communication between enterprises and their stakeholders will be appreciated by more and more enterprises. They will also notice the function of CSR report as a business language and be aware of use CSR reports as an important tool to enhance their management and competitiveness.

REPORTING – CSR IN CHINA:CSR in China

FOOTPRINT AND HANDPRINT

"development which meets the needs of current generations without compromising the ability of future generations to meet their own needs"

SUSTAINABILITY

SUSTAINABILITY IS ABOUT BALANCING

“a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a “voluntary basis” as they are increasingly aware that responsible behavior leads to sustainable business success.

The new definition of CSR in the eyes of the European Union is

The responsibility of enterprises for their impacts on society.

Balancing people, profit and planet

CORPORATE SOCIAL RESPONSIBILITY

Responsibility is taking care of your duties Responsibility is answering for your actions Responsibility is trustworthiness

Responsibility is being accountable for your behavior.

平衡 BALANCE

PROFIT

PEOPLE &

PLANET

CSR IS A BALANCING ACT

CIVIL SOCIETY PRIVATE SECTOR

PUBLIC SECTOR

IT ALL STARTS WITH INDIVIDUALS

What is CSR?

The entirety of CSR can be discerned from the three words this phrase contains:

• ‘corporate,’ • ‘social,’ and • ‘responsibility.’

Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

What is CSR?

People create organizations to leverage their collective resources in pursuit of common goals.

As organizations pursue these goals, they interact with others inside a larger context called society.

Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

CSR: Relationships & Responsibilities

• CSR covers the relationship among corporations (or other large organizations) and the societies with which they interact.

• CSR also includes the responsibilities that are inherent on both sides of these relationships

Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

Stakeholders defined

• As Freeman defined them, a firm’s stakeholders include those who affect or are affected by the firm’s goals

• Simply put, they include those groups that have a stake in the firm’s operations

Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

Questions from which the study of CSR springs:

• What is the relationship between a business and the societies within which it operates?

• What responsibilities do businesses owe society to self-regulate their actions in pursuit of profit?Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

Milton Friedman’s argument

• The Nobel Prize winning economist Milton Friedman argues,

“Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

Charles Handy’s Argument

Charles Handy constructs a compelling argument that businesses have a moral obligation to move beyond the goals of maximizing profit and satisfying

shareholders above all other stakeholders.

Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

Leaders as stewards…

• Although wealthy industrialists have sought to balance the actions of their firms with personal or corporate philanthropy as a response to social activism or complaints, CSR ultimately originates with modern-day leaders who view their role as stewards. Source: Strategic Corporate Social Responsibility William B. Werther Jr., David Chandler

Corporate Strategy and CSR

CSR is a key element of business strategy. • Strategy strives to provide the business

with a source of sustainable competitive advantage.

• For any competitive advantage to be sustainable, however, the strategy must be acceptable to the wider environment in which the firm competes

INVESTMENT THROUGH A BUSINESS PLAN

MARKET SOLUTIONS THROUGH CSR IN A BUSINESS MODEL

CSR IN A STRATEGIC BUSINESS MODEL

BALANCE IS THE KEY TO LIFE

“You can’t predict the future but you can create it” Peter Drucker

HOW TO THINK NOT WHAT TO THINK

Leonardo envisaged the great picture chart of the human body he had produced through his anatomical drawings and Vitruvian Man as a cosmografia del minor mondo (cosmography of the microcosm). He believed the workings of the human body to be an analogy for the workings of the universe."

EVERYTHING IS INTERCONNECTED

THE QUALITY OF OUR LIVES AND THAT OF WHAT WE PRODUCE, MAKE, OR BUILD DEPENDS PRECISELY ON THE QUALITY OF OUR THOUGHT

IF YOU CAN’T THINK CRITICALLY YOU CAN’T THINK CREATIVELY!!!

TO THINK CREATIVELY WE NEED TO STEP OUTSIDE THE FRAMEWORK OF WHAT WE SEE OR HEAR – WE NEED TO OBSERVE – ASK QUESTIONS AND ANALYZE SO THAT WE CAN OPEN UP NEW

THOUGHTS AND IDEAS ON OLD MATTERS OR COMMONLY- ACCEPTED ARGUMENTS

HOW TO CONNECT SOCIAL & ENVIRONMENTAL ISSUES ????

BYSTANDER EFFECT

Thirty-Eight Who Saw Murder Didn't Call the Police

New York Times Martin Gansberg March 27, 1964

For more than half an hour 38 respectable, law-abiding citizens in Queens watched a killer stalk and stab a woman in three separate attacks in Kew Gardens.

Twice their chatter and the sudden glow of their bedroom lights interrupted him and frightened him off. Each time he returned, sought her out, and stabbed her again.

Not one person telephoned the police during the assault; one witness called after the woman was dead.

BYSTANDERS

TRAGEDY OF THE COMMONS

• A commons is a natural resource shared by many individuals.• Shared - means that each individual does not have a claim to any part of the resource, but rather, to

the use of a portion of it for his/her own benefit. • tragedy is that, in the absence of regulation, each individual will have a tendency to exploit the

commons to his/her own advantage, typically without limit• This brings about the depletion of the commons which is eventually ruined.• Source http://ponce.tv/tragedy_revisited.html

DISCIPLINED MIND

SYNTHESIZING MIND

CREATING MINDRESPECTFUL MIND

ETHICAL MIND

5 MINDS FOR THE FUTURE - HOWARD GARDNER

HOW TO THINK – NOT WHAT TO THINK

HOW DO YOU VIEW THE WORLD AROUND YOU?

WORLDVIEW

Bill Valentino ©2011

THINKING

WORLDVIEW

PERCEIVING

INTERACTION

MINDSET

Bill Valentino ©2011

EDUCATION

FAMILY

LANGUAGE POLITICAL SYSTEMS

RELIGIONCORE

VALUES

SOCIETY

WORLDVIEW

Mindsets are not what we learn but how we think about something.

Mindsets lead to different conclusions about the world we live in.

MINDSETS

ALBERT EINSTEIN

“YOU CAN’T SOLVE

PROBLEMS USING THE

SAME THINKING YOU HAD WHEN YOU CREATED

THEM”

Thinking Different

Left and Right Brain Functions

Two different sides of the brain control two different “modes” of thinking.

Thinking Different

More Specific Details About Left and Right Side Brain Functions

Thinking Different

LEFT MBAsLAWYERSENGINEERSDOCTORSBANKERSEXECUTIVESIT/ TECHNOLGYSCIENTISTS

RIGHTNGOsWRITERSARTISTSMUSICIANSENTREPRENEURSINNOVATORSDESIGN THINKERSINVENTORS

Thinking Different

DesignStorySymphonyEmpathyPlayMeaning

Left-directed reasoning needs to be complemented by Right – directed aptitudes

Greater utilization of Right-Brain aptitudes that characterize a shift to a more conceptual approach

Foot Prints The impacts of businesses • Environmental • Social• Economic

CSR & SUSTAINABILITY

Both sides of the brain needed to create sustainable businesses, build

productive and just societies and to craft fulfilling lives.

WHOLE BRAIN THINKING

KEY LEARNING POINTS FOR TODAY

• DON’ BE A BYSTANDER IN LIFE• BELIEVE THAT EVRYONE CAN MAKE A DIFFERENCE• YOU CANNOT PREDICT THE FUTURE BUT YOU CAN CREATE IT• BE THE CHANGE YOU WISH TO SEE IN THE WORLD• BALANCE IS THE KEY TO LIFE• THINK BIG AND DREAM BIG!

YOU DON”T LOOK LIKE THIS - EVERYONE IS STILL AWAKE!!! WOW!!

Bill Valentino

THANK YOU 谢谢 ! Vielen Dank

YOUR TURN TO SPEAK UP!!!