Pressures at home and abroad inspire increasing social and environmental efforts from Chinese corporations.
In 2006, as China wrestled with its ongoing toxic pollution crises, a section of the newly passed China Company Law required businesses to undertake “social responsibility” – the first time this idea had been legislated. Prior to that, companies had little incentive to include social value as a measure of success.
Fast-forward to today and there’s a noticeable change in how Chinese businesses operate. Big industry players including Yili, a major dairy company, Gree Electric, the world’s largest air conditioner manufacturer, and Alibaba, one of the world’s largest e-commerce platforms, are all articulating strategies to produce financial growth alongside benefits to the environment and society. Increasingly, environmental and social engagement is seen as fundamental to doing business both within China and in international markets.
The Chinese government is driving this effort, helped by three key forces. First, public awareness of the country’s polluted water, tainted food and toxic air has risen. Second, to meet the demands and expectations of global markets, companies are recognizing that they must demonstrate concern for the greater good, not just for the bottom line. And third, a generation of Chinese entrepreneurs who want to serve both their shareholders and their communities has emerged. The resulting rise of the importance of social value is a combination of a push from domestic pressures, a pull from international markets, and the personalities of the visionary Chinese business entrepreneurs who run some of the world’s most successful companies.