Purpose of the study

5.2.1 Current status of CSR

1) CSR standards and compact in the world

To promote enterprise to take social responsibility, government and organization has drawn a number of reporting guidelines or compacts. Enterprises actively apply these guidelines or joint to CSR compacts. As we know Corporate Social Responsibility refers to environment affairs, market action, social affairs, human right and many aspects. But not all guidelines or compacts are comprehensive, some just emphasize on the human right or work environment, some emphasize on environment. In addition, the different sectors have their specific social responsibility certification for their sectors. Take comprehensive CSR guidelines as example, as shown in Table 5.2, we can find comprehensive CSR guidelines issued by different organization are various.

Table 5.2 Comprehensive CSR guidelines

Name issuer Purpose and content

Guidelines for

Multinational Enterprises

Organization for Economic

Cooperation and Development (OECD)

A code of conduct to promote multinational enterprises to take SR

ESG; TBL; G1,G2,G3 Global Reporting Initiative(GRI) Promoting the sustainability reporting

AA1000 Series of Standards

AccountAbility Measuring and reporting of ethical behavior in business

ISO26000 ISO Helping organization to operate in

a socially responsible manner SIGMA Guidelines British Standards Institution,

Forum for the Future, AccountAbility

Providing clear, practical advice to organizations to enable them to make a meaningful contribution to sustainable development

Connected Reporting Framework

Accounting for Sustainability (A4S) Project of UK

An approach to reporting an organization’s environmental and social footprint and its financial impact.

Sustainable Development Key Performance Indicator (SD-KPI)

Germany Providing SD-KPI, of 68 industries

Chinese CSR Report Guideline (CASS-CSR)

China Guiding for draw of CSR report

2) Current status of Chinese CSR

As mentioned in Chapter 2, Chinese companies take actively social responsibility under the promotion of government and Stock Exchanges. Meanwhile, Chinese enterprises are also adopting international CSR guidelines or compacts as shown in Table 5.3.

Table 5.3 Uptake of standards for sustainability in China

Name Numbers of companies certifying or implementing the standard China Social Compliance

9000 for Textile & Apparel Industry (CSC9000T)

By December 2008, 314 members of the Responsible Supply Chain Association adopted the standard, 53 of which have been accredited.^5-3) Forest Stewardship Council

(FSC) Principles and Criteria

1,161 Chinese companies in total: 879 in mainland China, 248 in Hong Kong, and 34 in Taiwan.^5-4)

OHSAS18000 By July 2009, 22,667 Chinese enterprises were accredited.^5-5) SA 8000 By March 2009, 223 Chinese enterprises were SA8000 certified.^5-6) Sustainability Reporting

Framework(G3) of Global Reporting Initiative (GRI)

By September 2009, 47 Chinese enterprises had adopted the G3 guidelines.^5-7)

UN Global Compact By September 2009, 212 members in China, including 185 enterprise members.^5-8)

Worldwide Responsible Apparel Production

By September 2009, more than 300 factories in China were WRAP certified.^5-9)

AA1000 by 2010, 33 Chinese companies register in the AA1000assurence standard, 1in Taiwan^5-10)

CSR awareness of Chinese corporations has been increasing. However, Chinese corporations still face many problems. In addition, so surprising development speed of CSR also implies that there are still many works to do for perfection of CSR.

As shown in Fig 5.1, we can find financial enterprise disclosed much more CSR reports than other enterprises. In manufacturing, smelting industry, chemical industry, electronic components and device and pharmaceutical manufacturers disclosed more CSR reports.

Fig 5.1 Amount of CSR disclosed by different industries from 2002- Mar,2012 According to the "2009 China’s Corporate Social Responsibility Blue Book", we can find

0 76 152 228 304 380

Amount of CSR / Unit

the market responsibility scored the highest due to corporation’s profit-driven model.

Environmental responsibility scored the lowest. Moreover, the CSR management score was also very low. However, Companies had a relatively better performance in the social responsibility than in CSR management and environmental responsibility. During the social responsibility, the disclosure of responsibility for employee was not sufficient and comprehensive, and the quantitative description is not enough. However, companies did better in donation. In the four sub-indexes of CSR management, the performance of responsibility promotion was worst. Most companies did not established social responsibility organization and management system, did not make the CSR payment plan, did not do enough work in the training of social responsibility and the requirement survey of the shareholder. Whole management level of social responsibility need be improved.

In the environmental responsibility, enterprises did worst on disclosing their environmental issues, such as energy saving and pollution control. Up to April 2010, the least disclosed information was still environment protection investment and the carbon emissions.

Among117 listed companies, 2 companies disclosed the carbon emission, and 7 companies disclosed the environmental protection investment. According to one international survey of Corporate Responsibility Reporting, almost 70% of top 100 companies did not report climate risks in 22 countries. In Japan and the United Kingdom, the ratio of company reporting on social responsibility and environmental impact is larger than in other counties. For Japan, it is due to environmental reporting regulations. For UK, it is due to consumer, media, employee and shareholder groups calling for accountability and transparency.

5.2.2 Study purpose

Because of environmental degradation, resource and energy shortage, human right problem, gap between the Rich and the Poor and human being sustainability, the theory of enterprise value maximization was being challenged, and society are promoting enterprise to take more responsibilities from different aspect such as protecting environment, respecting human right, providing safe product and safe work environment, contributing to the community and so on.

The perception and reality of an organization's performance on social responsibility can influence the following aspects: competitive advantage, reputation, ability to attract and retain workers or members, customers, clients or users, maintenance of employees' morale, commitment and productivity, view of investors, owners, donors, sponsors and the financial community, relationship with companies, governments, the media, suppliers, peers, customers and the community in which it operates. More and more enterprises find the positive role of CSR in the sustainable development. Pressure to take social responsibility comes from customers, consumers, governments, associations and the public at large. At the same time, far-sighted organizational leaders recognize that lasting success must be built on credible business practices and the prevention of such activities as fraudulent accounting, environment pollution and labor exploitation. More and more enterprise is taking the CSR into operation

strategy. Meanwhile, international organization and government has developed projects or policy to support enterprise taking social responsibility. Many guidelines or standards are developed to identify the principle, content, practices, audit, certification and other aspects of CSR.

To put the principles into practice and implement SR effectively and efficiently, this paper will try to specified the CSR practice for manufacturing, search and summarize issues an organization needs to address in order to operate in a socially responsible manner, and the best practice in implementing SR. On the other hand, to promote the CSR, assess the CSR performance and then stimulate enterprise with better performance is also an important procedure of CSR promotion, this paper will specified there action at the viewpoint of CSR performance assessment, and establish a CSR assessment indicator system as shown in Fig 5.2.

Fig 5.2 Study purpose