Sustainability as a China business strategy
By Brad Burgess, Consultant
Golin Harris, Beijing
Sustainability as a concept has been around for quite some time. In 1987, the United Nation's Brundtland Commission created a report with the intention of distributing resources and equity around the world. "Sustainable development," a key term coined by the group over two decades ago, has since grown to become a household term almost akin in popularity (or notoriety) to the "rise of China."
Indeed, one cannot open a newspaper or Web page now without seeing the announcement of an organization "greening" itself or demonstrating its commitment to sustainable practices. "Moving Consumers from Green Interest to Green Action," a recent study conducted by Insight Research Group, reports that 81% of respondents maintain the current focus on environmental or "green" issues is "here to stay" rather than a "passing fad," and 78% of respondents said they are "willing to make a lifestyle change for the good of the environment."
The popular consensus, with only a few dissenting opinions, is that incorporating sustainable practices into your business is not only a good way to earn respect with your stakeholders but also delivers concrete returns on investment. Having swept the Western world, sustainability is now nearly an equally important force driving business and political decisions in China.
In modern China, as in the world at large, electronic communication in the form of bulletin board systems, blogs and SMS text messages often carry more sway than traditional media. Many people are increasingly skeptical of the business community, and they have the ability to analyze situations for themselves. This grassroots influence means that companies have the opportunity to make an impact on how consumers perceive their brand, but only if sustainability efforts come across as meaningful and authentic.
China Trends
2008 is an important year for China with the coming Olympics. The Games have undeniably brought exceptional attention to the capital, and this includes a renewed interest in improving programs to ensure Beijing’s sustainable development.
China's government leadership not only approves of programs that demonstrate sustainability but has taken active steps to guarantee that China will be well taken care of now and in the future. In China’s 11th Five Year Plan, the country set out to not only develop “harmoniously”—as government leaders have pledged to—but also move toward becoming an innovative nation rooted firmly in the principles of sustainability.
Energy efficiency and environmental care remain the largest priorities, especially in light of China’s recent environmental challenges, from the environmental impact of the Three Gorges Dam to polluted air in Beijing. Safety standards have also been a key issue this past year. Recent news that only half of China's new buildings being constructed meet national standards was a serious setback to China reaching its goal of making buildings 50% more efficient by 2010.
It is encouraging that the National Reform and Development Commission—which is charged with promoting sustainable development strategy—has presented a series of industry sectors that are to be prioritized going forward, including oil and chemical, renewable energies, material sciences and environmental technologies.
The case for sustainable development in China is strong. The government is behind it, and forward-looking businesses are aligning themselves with it.
Considerations for building a sustainability program
For companies doing business in China, sustainability should be a key ingredient of corporate social responsibility (CSR). Traditionally, CSR activities have focused on philanthropy rather than active engagement. Now, numerous MNCs are offering CSR programs that emphasize the environment, the community and employees.
Also, there is a growing tendency toward “owning” an area of CSR. This approach will be increasingly important for companies looking to stand out from the crowd as more organizations look to demonstrate commitment to China through sustainability. Instead of holding sporadic, one-time events or sponsorships that are unrelated to the company’s business strategy in China, CSR programs—including sustainability initiatives—must be clear, integrated and seamless.
Steps to sustainability
Here are specific recommendations for companies building sustainability positioning in China:
- Make a well-informed and well-researched decision to choose a particular area of sustainability-related CSR that is strategically worth pursuing in China and then seek to own it.
- Seek a trustworthy, established partner, such as a Chinese government agency that is trusted for long-term relationship building and joint program creation.
- Tie in strategy with employee relations, allowing China staff to become engaged.
- Ensure that benchmarking is built into the system. As Chinese become savvier about sustainability, they will also become more skeptical. It will be essential to make available hard data on just how sustainability initiatives deliver results rather than just engaging in promotional activity.
- Develop comprehensive intelligence around the “owned” sustainability property and build thought leadership around that approach.
- Proactively communicate what you are doing.
Clearly, sustainability and environmental issues are not going away any time soon. China has much to do as it moves from being a developing nation to being a fully developed country. Companies and organizations are wise to align their business strategy with the country’s sustainability trends. Those that do will win.