CSR’s challenge in China

As Rich and others well know, business in China is moving rather fast. For most Multinationals they are under pressure to make profits in China, gain market share, open new branches or R & D Centres, recruit more (quality) staff and so on. The Olympics are around the corner which is adding extra pressure along with increasing numbers of high profile CEO and political visits because of China's growing importance in the World -environmentally, socially and economically.

What this means is that things like risk management tend to get pushed down the agenda (which is a big, big mistake), volunteering gets sidelined unless HQ orders everyone to do something on 'company's volunteering day' (as employees are too busy to take time off of work and companies unwilling to spend too much time organising anything) and community partnerships or other elements of CSR (like HR diversity programs or governance) tends to be dealt with rather hurriedly.

This is a missed opportunity for all concerned. Working on CSR is by necessity a long-term strategy. There is now a slow trend of companies in China to start to engage in more meaningful community partnerships, but only a slow trend. Most companies still lack the time, the ability, the people or the will to really engage meaningfully, even though the more meaningful the engagement the greater the benefits. Yes, more and more organisations are offering consultancy related to CSR in China, more and more are also providing outsourcing services (such as PR or legal companies, let alone those in supply chain areas); but the major issue is still there. Consultants or other agencies rarely train staff. They make suggestions that are accepted or otherwise or they implement directly and what is really needed is training (not just conferences) of staff dealing with these issues accompanied with high level support providing the time and will power to make something meaningful happen.

I expect that, for Foreign companies, their 'Global CSR people' will start playing a more important role in the future, as they recognise the limitations their China staff have and the environment these local staff operate in. It also means we will see more high level Global CSR meetings in China, attended by Global staff. By this i do not just mean the UN GC or those events, i mean meetings by WBCSD or BSR as well as smaller meetings. I also expect companies to start having their internal Global /Asia CSR meetings here more often. Unfortunately those people will still struggle to find a 'green' venue for their meetings too!

Speaking Different Languages

In all the literature about cross-sector partnerships there is always two key problems that are identified. The first is the lack of communication and poor expectation setting between different partners, and indeed different people within each organization. The second is the different perspectives the different organizations are coming from. I’d like to focus somewhat on the second problem for a moment.

What do companies think of NGOs? There are some good terms that come to mind, such as ‘dedicated’ and ‘worthwhile’ but more often there are rather less-favorable terms used such as ‘unprofessional’, ‘a nuisance’, ‘money hungry’ and ‘unreasonable’. In return, what would NGOs think of companies? Thinking of the whole range of NGOs here, though in public most are very positive if it helps them get money (except for the combative anti-corporate NGOs), in truth most NGOs do not look too highly upon companies either.

This misunderstanding between both groups leads to a lack of trust and without that no partnership can be a success. 1 way of avoiding a lack of trust developing is to try to bridge the gap between companies and NGOs. If NGOs knew what it was like to have to reach ambitious targets or get fired, what it is like to deal with internal politics, what it is like to deal with finance departments or sales departments, they might understand companies better. Similarly if companies understood the lack of trained staff in NGOs, the lack of consistent funding and how that affects an NGO’s operations; and what an NGO is actually doing, they could recognize the different pressures NGOs come under.

In addition to all this, there is often a real language barrier. Companies talk about sales, profits, margins, adding value, supply chains, distribution, brands and franchises. NGOs tend to talk about communities, vulnerable groups, sustainability, empowerment, IEC (Information, Education and Communication) and more. If it happens to be an International NGO and a Multinational company then there will also be all kinds of internal words and acronyms that add even more to the confusion.

Despite all the literature and examples of how these issues affect partnerships, there are very few proposed solutions. The best solution is for an NGO to recruit staff from a business background and for a business to recruit staff from an NGO background. The former can be tough though, since not too many staff are willing to move to the countryside or take massive salary/benefit cuts (which is often the case in Asia) whilst the latter is just as hard since not too many NGO staff have the relevant experience or skills to cut their teeth in the business world.

Thankfully some certification schemes are being developed (such as that by the IBLF), some masters, MBA or short-term programs exist that can bridge some of these gaps (such as those provided by Ashridge), providing relevant training to either party; yet neither of these solutions are likely to have a massive impact. Hence both parties continue to be communicating and getting increasingly frustrated.

Companies are looking for quick results, but NGOs realize that reducing poverty or solving massive environmental problems will not happen quickly. Companies expect a measurable outcome, yet many development programs require sophisticated assessments or evaluations in order to understand what impact the program had, if any, and these impacts are often spread over a wide group of beneficiaries over a long period of time with other forces playing a part. There is definitely still a need for greater understanding between the NGO and corporate sectors.

Partly this can be solved through recognition and acceptance of this language and experience barrier and then both parties can be more patience, explain themselves and their concepts better. For those involved in partnerships it really helps to try to meet as many staff as possible in the other organisation to find out what they do and how the organization works as well as talking to friends in the same sector and researching the company or NGO endlessly (NGO folk, try going online and downloading a presentation the company gave to investors and trying to understand it!).

Since business is everywhere and generally goes along similar lines it can often be easier for an NGO to understand a business, even if there are still communication problems. In my experience though, the more significant issue is for business to understand development. The ‘base of the pyramid’ area is really just smart marketing –but marketing that requires some understanding of a new market segment and it is clear that business currently lacks any understanding of the ‘poor’ or ‘disadvantaged’ market. Well, apart from needing this to succeed in the BoP world, they need this to develop successful community partnerships.

Companies need to understand how development works, what terms like ‘training of trainers’ or ‘peer education’ might mean and how they fit into program designs. Granted they cannot become experts over night, but an openness to trying to learn this, to visit NGOs, spend some time with them, at their work and taking some time to actually read some of their (often lengthy) reports can work wonders. Of course, for those who do not understand the 3^rd sector, they are just happy to give away some cash based on some simple criteria and get some PR out of it. An actual partnership though can be so much more. Companies can really help NGOs, giving them advice to improve their programs, helping them develop their brand and raise awareness of issues, helping them develop professional budget or accounting procedures and so on.

Yes, true partnerships require much more work than just giving out money and more often than not neither companies nor NGOs have the time, skills or genuine interest in such a partnership. But, it is clear that when these kinds of partnerships develop they really make a difference and often in many unexpected ways. There is no need to go through the ‘benefits to a company from engaging with the community’ here, but this is the time for both sectors to spend more time trying to understand the other and trying to work with the other, rather than against them.

In recognition of these kinds of language problems that exist, Plan China (some shameless self-promotion here) is organizing a study trip for corporate staff involved in working with the community to some of our program areas to understand the bigger picture and rather than just talk about the problems, the focus will be on solutions. The idea being that afterwards, staff can return to their companies better able to understand NGOs, poverty and how their company could play a role.

An inspiration, a hero, a role model.... Anita Roddick died yesterday

Anita Roddick, the founder of the Body Shop is one of the few people I could call either a hero, a role model or an inspiration to me. Way before people were talking about CSR she was doing it (1976) because it needed to be done for business reasons and for social and environmental reasons.

Her whole life has been devoted to issues she truly believes in and issues her company truly believes in. Lets just have hope in others like her and hope that there are many many more people like her still to come.

For Dame Anita, the truly exceptional entrepreneur, business and ethics came together. "Businesses have the power to do good," she wrote. "That's why The Body Shop's Mission Statement opens with the overriding commitment, 'To dedicate our business to the pursuit of social and environmental change.'" Capitalist with a Conscience

Smoking in China

It is interesting to hear that 18 months after China ratified the WHO’s framework convention on tobacco control, China has now finally announced it is going to do something to meet its commitments. This is not just a ’smoke-free Beijing’ slogan which in effect means nothing; it is potentially a new law that can be relatively easily enforced. The government can stop companies from advertising and it can stop advertisers from accepting advertising; by enforcing the law from both directions it might actually be enforced -at least in the big cities. It will be interesting to see what happens in the countryside and what what strategy the tobacco companies come up with (maybe just focusing on promoting the brand of the company rather than its products, like Western tobacco companies; or maybe resorting to more underhand tactics and increasing promotion online, ‘on-the street’ or through other less regulated channels).
It is about time that China accepted that the profits the government makes from tobacco (taxes as well as from the State Owned Enterprises in the industry) and the number of people employed in the industry (including many poor urban residents selling cigarettes in tiny shops or from make-shift stands on the sidewalk) is not a reason to continue to support an industry which such devastating impacts on people’s lives, their productivity and their household economy (it is no wonder that most NGOs prefer to support women more than men when so many men spend their pocket money on cigarettes when women spend pocket money on food, education or clothes for the family).

I wonder, though, how the tobacco lobby in China (and though Western companies are a part of this lobby, evidently the major players are all Chinese) let this happen? China is a huge market for the tobacco industry and one of the few countries where (I believe) the number of smokers is growing. I also wonder how high up this decision goes and whether the decision was purely an economical one (i.e. taxes received =lower than cost to health system for dealing with impacts) or also motivated by other reasons.

Smoking itself is one of those industries CSR people love to talk about with the question: Can tobacco companies be responsible? In one way, the answer is no, since the companies’ product kills people that consume the product, and those who do not and particularly harms the vulnerable in a household (i.e. the women and children who suffer from second-hand smoke but do not smoke). In another way, the answer is yes, since the companies’ product is not illegal, employs millions of poor people (especially farmers and those involved in distribution) and contributes high taxes to the governments that need money for health sectors. Does anyone know of any Chinese Tobacco companies that have ever said anything about CSR (not just charity)?