The framework, released at the United Nations Global Compact summit in Shanghai and partly funded by the World Bank’s International Finance Corporation for an undisclosed sum, sets a yardstick for corporate social responsibility, and aims to familiarise businesses there with CSR.
Reputex global chief executive officer Laurel Grossman, speaking from Shanghai yesterday, said that with the drive by businesses around the world to invest in the Chinese market, a benchmark was needed.
This coincides with more focus on working conditions, environmental issues and corporate governance problems emerging in the wake of the China’s blistering economic growth.
“Businesses around the world are making a large pathway to China to invest and financial investors are putting a large amount of money in China regardless of that dark side,” Ms Grossman said.
“This is not going to solve all the problems but it provides companies with a benchmark.
“The benchmark comes at a time when many foreign investors in China are looking closely at governance structures and environmental and social performance as key elements of mainstream financial risk exposure.”
It also comes at a time when the costs of China’s breakneck development are creating challenges for a government and business community determined to maintain growth.
The death toll from China’s latest mining disaster has reached 150, with more missing, following an explosion at the state-owned Dongfeng coalmine in the north-east. More than 6000 miners were killed in China last year but independent estimates say the real figure could be as high as 20,000.
On the environment front, Harbin, capital of Heilongjiang province in north-east China and home of 3.8 million people, recently had no water for five days after an explosion at a PetroChina chemical plant.
Reputex developed the benchmark after it was asked to work with Fudan University to develop a CSR system appropriate for China. The benchmark at this stage is aimed more at research and training.
The system, developed with the university and the Chinese Academy of Social Sciences, comprises the key factors of corporate governance, environmental impact, social impact, and workplace practices. It has also been put together in consultation with International Finance Corporation and 150 businesses, community and government organisations in China.