CORPORATE SOCIAL RESPONSIBILITY
WHITE PAPER 2021

Editorial Board
Guest Editors
Wang Hong

President, Professor of Management (Tier-2), CEIBS

Ding Yuan

Vice President and Dean, Professor of Accounting,
Cathay Capital Chair in Accounting, CEIBS

Executive Editor
He Jinyu

Professor of Strategy, Research Area Director of
CSR/Sustainability, CEIBS

Editorial Board Members
Xu BinProfessor of Economics and Finance, Wu Jinglian
Chair in Economics, Associate Dean (Research),
CEIBS

Lydia J. Price

Professor Emeritus, CEIBSChen Shimin

Professor of Accounting, Zhu Xiaoming Chair in
Accounting, Director of Case Development Centre,
CEIBS

Rui Meng

Professor of Finance and Accounting, Parkland Chairin Finance, Director of Ph.D. Programme, Director of
CEIBS Centre for Wealth Management, Co-Director of
CEIBS Centre for Family Heritage, Programme
Director of Family Office Diploma Programme, CEIBS

Wang Taiyuan

Associate Professor of Entrepreneurship, CEIBSFOREWORD

2020 has been a year of rare uncertainty and instability brought on by a once-in-a-century
pandemic coupled with momentous changes unseen in the last one hundred years. As a result,companies have been faced with a need to redefine their role as a business and their corporate social
responsibility, whilst also trying to achieve sustainable development, and inject certainty into this worldof turbulence.
As Covid-19 has ravaged the world, CEIBS alumni companies displayed entrepreneurial spirit withcompassion and empathy, leveraged cutting-edge management methods to enhance organizational
efficiency, applied business logic to address institutional problems besetting charity donations, andoptimized the fulfillment of social responsibility through supply-side reform. With wits and guts, CEIBS
alumni companies delivered a stellar performance in the combat against Covid-19.
Adversity reveals the strength of genuine friendship, and success is a sum of small effort madeevery single day. The alumni’s responses to Covid-19 offered a glimpse of their socially responsible
practices in business operations. Even when confronted with the ravages of Covid-19, CEIBS alumni
were relentless in fulfilling their daily social responsibility...
CEIBS alumni entrepreneurs have been actively involved in poverty alleviation. In 2020, China
attained an all-round victory against extreme poverty as the remaining poor households in all severely
impoverished areas were lifted out of poverty. Two CEIBS alumni were awarded the “2020 National
Poverty Alleviation Dedication Award”. The statistics from the CEIBS Center for Wealth Management
revealed that the average score of CEIBS alumni companies was higher than the average of A-sharelisted companies on all CSR indicators. This indicates that CEIBS alumni companies have been at theforefront of fulfilling future-oriented social responsibility.
CEIBS has been an inexhaustible source of motivation and intellectual support for its students andalumni. Since its inception more than 26 years ago, the School evaluates business success not only on
wealth accumulated, but also through social value created. It delivers CSR education based on thepositioning statement of “China Depth, Global Breadth”. In 2020, the School tapped into the researcharea of “CSR/Sustainability” that focuses on how companies meet the expectations of people from allwalks of life and reduce their own adverse impact on society and environment. CEIBS has set a goal of
becoming a leading creator and messenger of up-to-date knowledge about CSR and sustainability in
China and Asia at large.
The year 2021 marks the beginning of CEIBS’ new Five-Year Strategic Plan (2021-2025), whichmakes “exemplifying CSR education, and advocating and implementing the CSR and sustainable
development concepts in teaching, research work and operations” one of its eight priorities. CEIBS willcontinue to cultivate business leaders with entrepreneurial spirit who proactively fulfill their social
responsibility from a strategic perspective.
We should take it upon ourselves to rise up to the challenge in trying times. CEIBS alumni’s
involvement in CSR practices has proven and is proving that CSR drives a company’s steady andsustained progress, and helps it navigate choppy waters, setting a benchmark for the business
community. As business is reshaping the world, CSR is steering companies forward. Entrepreneurial
spirit will drive us forward.

Dr. Wang Hong

Dr. Ding Yuan

CEIBS President

CEIBS Vice President and Dean

EXECUTIVE SUMMARY
Against a background of upheavals, including SARS,
the global financial crisis, the Fukushima nuclear disaster,and the growing urgency of climate change, the new
Covid-19 pandemic has reminded us that we are living ina “society constantly faced with global risks”. This context
shows that companies must be ready not only to take a‘long-term’ approach to corporate social responsibility, butalso to ‘go on the offensive’, so that they can bracethemselves for unexpected emergencies. In this climate ofglobal risk, volatility and uncertainty are the new normal.
This White Paper focuses on both approaches to CSR,
highlighting the interdependence between them.
The opening statement to this White Paper provides
insights into CSR trends and outlook, and then examines
the CSR practices adopted by five CEIBS alumni
companies in their fight against the Covid-19 pandemic.
While proactively following CSR trends, they also
developed their own competences to better fulfill theirsocial responsibility. The White Paper then presents three
CSR papers written by CEIBS professors, which identify
the theoretical underpinnings of some exploratory andcutting-edge CSR practices. Finally, this White paper ends
with a report entitled, ‘Research on CSR Reports of
A-Share Listed Companies’, which highlights the examples
of sound CSR governance, in contrast with cases which fell
short of a number of CSR indicators.
Below is an overview highlighting the salient pointsof this White Paper, in the order they are presented in thepaper:
In part one, Prof. Lydia J. Price once again leads theway by identifying a term which captures the nature of
CSR trends in 2020: that word is “resilience”. She thenprovides insights into her idea of a common “resilience
toolkit”. The first component of this kit is a tool to gain
realistic insights into current situations, making it
possible to identify the early signs of systemic distress.
The premises for this tool to work include collection ofhigh-quality data, effective monitoring of the environmentand careful analysis. Price continues by saying that two
CSR challenges that also need to appear on thisinformation dashboard for 2021 are “safety and society”
and “climate change”. The second tool serves to identify
a company’s shared values and ultimate business goal
amid the pandemic, in order to facilitate commitment tothem. The third tool helps reinforce agility, including theways to ensure effective adaptability of production in thelight of new realities.
In part two, the report, ‘CSR Practices of CEIBS
Alumni Companies’, recounts the experiences of JD
Logistics, CEIBS Alumni Association, Fosun International,
Sanquan Food, and We Serve Hospital. These cases
explain how each entity managed to exploit their expertiseand resources to contribute to preventing the spread ofand fighting the epidemic, whilst maintaining operations

and production. Sanquan Food leveraged its warehousing
capacity to ensure basic food supplies made it to thepandemic frontlines. Fosun International used its global
network to procure essential medical supplies, while JD
Logistics’ expertise in transport and delivery helped meetcritical demand by ensuring transportation routes were
kept open. We Serve Hospital supported healthcare
workers by providing efficient and specialized logistics
services for hospitals, which lay at the center of thetheatre of the war against Covid-19. Finally, the CEIBS
Alumni Association, offered a platform to all its members
and drew on its network of influence to ensure optimaluse of available resources. Each case also examinesand explains how each of these companies, which
successfully navigated the Covid-19 pandemic, also metsocial responsibility requirements by conducting routine
operations, improving the internal management system,
fostering enterprise culture, and supplying products andservices.
Part three introduces ‘CEIBS CSR Research’, which
covers three papers written by CEIBS professors on
trending business topics and the current concerns ofbusiness leaders. Prof. Zhang Shuang expounds on how
policymakers should strike a balance between economic
growth and environmental protection, and emphasizes thatboth the green recovery plan and climate justice should beat the top of national policymakers’ agendas in the

post-Covid-19 era. Prof. Wang Qi looks at how emerging
markets have rewarded CSR practices and reveals thatbeing listed on Socially Responsible Investment (SRI)
indices can indeed bring companies economic benefits.
Prof. Byron Y. Lee and Pro. Tae-Yeol Kim probe into therelationship between employee stability and HR andsupervisory practices.
The White Paper ends with ‘Research on CSR Reportsof A-Share Listed Companies’ conducted by Prof. Rui
Meng and the CEIBS Center for Wealth Management thathe chairs. This report looks at the Environmental, Socialand Governance (ESG) information disclosed by A-sharelisted companies from seven different perspectives, anddemonstrates and analyzes the differences among them interms of industry, region, type of organization, and board.
This report also offers a statistical analysis of CSR
performance and disclosure of CEIBS alumni companies
among A-share listed companies.
The pandemic has shown us how Chinese companies
are able to go on the offensive in the times of difficulty, inorder to fulfil their corporate social responsibility, whilst
also highlighting the importance of taking a long-term
approach to CSR. It is this ‘dual’ approach that constitutes
the foundation underpinning “resilience”: the ability to go
on the offensive ensures companies can weather a crisis,
whilst a ‘long-term’ approach is essential to maintaining acompetitive edge in more ordinary market conditions.

Contents
CSR Trends

001

A Time to Bolster Resilience003

CSR Practices of CEIBS Alumni Companies

015

JD Logistics: Exemplifies Timely and Customer-Centric Services

017

CEIBS Alumni Association: Creating Synergy Through a Joint Anti-Pandemic Effort

025

Fosun International: Shaping an ESG Strategy through Corporate Values

033

CSR at Sanquan: An Invisible Backbone

041

We-Serve-Hospital: Supporting Doctors and Nurses in Their Fight Agajiinst Covid-19

049

CEIBS CSR Research055

Employee Well-being Attribution and Job Change Intentions

057

Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China

059

Does Doing Good Lead to Doing Better in Emerging Markets?

061

Research on CSR Reports of A-Share Listed Companies

063

2020 CSR Trends2020 CSR Trends
A Time to Bolster Resilience
By Lydia J. Price and Laurie Underwood

Lydia J. Price
Professor Emeritus, CEIBS“

Now more than ever, companies need to build resilience
competencies —— to guard against failures in this time ofsocial and environmental disruption, but even more importantly,
to increase the chances of moving forward with the times.

”

2020 CSR Trends

Abstract
For decades, experts have called for improved resilience in business leaders and organizations, but never
have their voices been more relevant than during 2020 when human and economic crises spawned by
Covid-19 piled atop the environmental crisis that was centerstage in CSR discussions one year ago (Lydia J.
Price & Laurie Underwood, 2020) subjecting markets and companies worldwide to the most severe test ofshock absorption since the 2008 global financial crisis. Resilience is the ability to quickly recover fromadversity to a state of prior or renewed strength. In this year's trends review, we look at how Covid-19 has
accelerated the movement to bolster corporate resilience, and what this means for responsible leadership. We
offer a glimpse of the post-Covid CSR new-normal as well as a glance at some developing best practices.

A RESILIENCE TOOLKIT
Three capabilities appear repeatedly in emerging lists of resilience competencies (e.g., Coutu, 2021; Deloitte,2020;
Hamel & Valikangas, 2021; King, 2020). Mastering these three abilities this year will boost your company's successesin
foreseeing the next disruption, as well as the speed and quality of your recovery.
Realism
A realistic perspective which
recognizes that change isimminent and essential

Commitment to Shared
Values and Purpose
Commitment to shared values
and purpose that transcend
immediate crisis needs

Adaptation and Action
Capacity to change, including
productive adaption to new
realities and a propensity for action

REALISM
Denial, wishful thinking, and vested interests too often prevent managers and executives from seriously evaluating
the risks to their business from the mounting environmental and social problems that have filled news headlines in recent
decades. Informed advisers including Bill Gates warned global leaders of pandemic risk, but few believed it would strikeso soon and with such catastrophic effect. A key lesson of Covid-19 is that leaders across the spectrum must assess
trends and early signs of systemic distress with an objective eye, without lingering glances to an eroding past that might
never return. Covid hammered home the reality that globally interconnected economic, social and natural systems cancollide with such force that existing stabilizing systems are inadequate to blunt the resulting chaos (Henig, 2020; Levine,2020). Without honest appraisal of the changes underway, and coordinated action from business, government and social
institutions, the threat to our life systems is very real. A health crisis ricocheted around the world, prompting an economiccrisis that has exacerbated already-rumbling protests over social inequity. Months after the existential earthquake of theinitial crises, we are seeing new aftershocks. As one example, Covid-19 hospitalizations and home quarantines havecreated a mountain of medical and home-delivery waste. As another, the pandemic has triggered social and mental
health issues including disrupted children's education, strained family relations, and increased isolation, stress anddepression among those forced to stop working or to work from home.
In the face of such complex and interrelated challenges, business leaders have been dragged from their comfort
zones to work across organizational, sectoral and geographic boundaries to craft systemic and unified responses. To
avoid the conflict and bureaucracy that typically characterizes such work, reliable and informative data must lay afoundation. When interviewed by Aspen Institute about his early response to the Covid crisis that was emerging in China,
Shanghai-based Shane Tedjarati — President of Global High Growth Regions for Honeywell - emphasized the need forreliable information to assure employee safety, empower front line response teams and coordinate a unified response
from headquarters (Aspen Institute, 2020). Our first advice for CSR leaders this year: make high quality data collection andenvironmental scanning and analysis a key part of your job. Emerging signs of systemic change must be collected andconverted to insights that drive executive decision-making, and breaking news of crisis events must be delivered along0042021 CEIBS CSR White Paper

with well-researched resources that can help plan a response. CSR teams that routinely monitor the environment with abalanced view of both business and societal needs can play a unique role in maintaining calm and order in the face ofdisruption, but only when their work is a professional part of corporate strategy and decision-making.
Realism Box 1
Thinktank Forum for the Future (https://www.thefuturescentre.org/fos/) issued a report illustrating four possible trajectories
emerging from the Covid-19 discontinuity of business-as-usual. Each draws on a mindset and group of assumptions thatdrive individual and institutional decisions:• Compete & Retreat — There is not enough to share• Discipline — Greater control is required• Transform — Planetary health and human wellbeing come first, and are interconnected• Unsettled — There might not ever be a 'new normal'
The report helps readers to recognize the trajectory their business currently follows, understand its dominant thinking, andmake active choices leading toward a preferred Transform path of deep system resets.

| What to Watch in 2021
Two key CSR challenges to include in your information dashboard in 2021 are: 1) Safety and Society and 2) Climate
Change. As politicians debate post-Covid stimulus plans, citizens, non-profits, corporate executives and scientists arepushing for improved healthcare and a green recovery that allocates significant funding to climate action, green job
creation and protections for the vulnerable.
Safety and Society
We highlight safety and society because the virus revealed gaps in our public support structures that business has
stepped in to fill. Whether the task was to manufacture emergency response equipment at unprecedented scale, reorderlogistics and supply chains to deliver food and health supplies where needed, construct infrastructure, or simply calm
fears and anxieties, Covid-19 led business leaders worldwide to assume new public roles and responsibilities in 2020. As
uncertainties continue to loom for the coming year, it seems likely that business leaders will play an expanded role inprotecting the welfare of employees and communities where they operate.
When the virus first struck there was an urgent need to assure employee security. This evolved from maintaining
payroll during quarantines to protecting frontline workers with personal protective equipment (PPE) and migrating office
work to unfamiliar digital platforms. The strains and inequities of these new working modes are now clear. Frontline
essential workers are at risk of virus exposure, especially in regions where PPE supply is still scarce. In hospitals wherecare is delivered and in factories where PPE and other emergency equipment is produced, workers often forego holidays
and weekends to keep up with surging demand. Meanwhile workers at home struggle to fill the gaps of suspended
services including children's education, routine health care and even haircuts, while maintaining an active presence inonline meetings, and completing normal job duties. Uncertainty, exhaustion and monotony are taking a huge toll on
workers' mental health over time. This holds true even in China and other Asian nations, where strict virus controls haveallowed national economies to reopen, but travel restrictions continue to separate families and limit rejuvenating leisuretravel. As Chinese New Year approaches in 2021 there are new reports that local governments in Zhejiang andGuangdong provinces are once again offering gift vouchers to encourage local citizens to stay home and patronize local
commerce (Du, 2020).
Even more stressed and challenged are workers who have temporarily or permanently lost income and benefits due
to illness, business closures, or slowdowns. Emerging statistics reveal that society's most disadvantaged groups bear adisproportionate burden of this type since they deliver low-wage frontline work, with limited access in some countries tospacious and ventilated housing, paid medical leave and health services that could help them avoid illness or adequately
treat it. Early in the pandemic, the UN's International Labor Organization (ILO) predicted that an unprecedented 1.6 billion
workers worldwide — half the global workforce — employed in the 'informal economy' would be impacted by temporary
or permanent layoffs triggered by the pandemic (UN News, 2020). The UN warned that those employed in this sector(including full and part-time workers in manufacturing, wholesale & retail, and accommodation) are among the world's
most vulnerable — typically lacking the financial savings, insurance, or access to credit necessary to withstand salary
reduction or job loss.
By late 2020, it was clear that the U.S. was hard hit; one-fourth of adults and half of lower-income adults reporting
pandemic-triggered financial difficulties as of year-end (Parker et al., 2020). Workers in Europe were generally better① ¥ = CNY = Chinese yuan renminbi; ¥1 = approximately US$0.15326 on December 31, 2020.

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2020 CSR Trends

supported by government-supplied social assistance (World Bank, 2020) and those in China faced less serious financial
impact.
Still, workers in the informal economy worldwide — those lacking job security, insurance, and unemployment
benefits — continue to suffer the most. Women in particular, have suffered economic losses and increased stress due tothe pandemic; ILO reports that females have not only disproportionately shouldered work reduction and job loss due to
Covid, but they have also taken on the bulk of increased unpaid care work caused by pandemic-driven school closuresand service cessations (International Labor Organization, 2020).
Business plays an important role in funding and directly implementing social health and safety programs andinfrastructure, creating and maintaining job opportunities, and providing expertise, but questions arise about appropriate
limits to civic responsibilities. Executives in Asia and Europe are more accustomed to joint accountability with government
officials but those in USA are under strong pressure to keep things separate. Regardless of geography, though, thepandemic has stretched the borders of business accountability. As we move beyond the 50th anniversary of Milton
Friedman's impactful article claiming the social responsibility of business to be increasing profits, it is time for fresh thinking.
Financial Times (2020) pointed out at last year's end that while Covid pushed many companies to the financial
make-or-break point at which profit-making necessarily dominates decision-making, the pandemic also revealed theimpossibility of making a profit without the vast supporting web of suppliers, investors, employees, customers and social
institutions that support market health. Whereas Friedman criticized business leaders who blur the roles of “legislator,
executive, and jurist,” the FT authors argue that Covid made clear the necessity for close government-businesscooperation.
Safety & Society Box 1
By April 2020, nearly 50 Chinese cities had introduced consumption vouchers to residents in the hope of revitalizing
purchasing and driving the growth of production and investment. Since vouchers were earmarked for specific market
sectors, their role in stimulating short-term consumption was more direct than cash handouts. Nanjing distributed ¥318
million① in vouchers linked to catering, sports, books, and rural tourism. Guangzhou arranged a financial fund of ¥300
million to promote the recovery of culture and tourism. Alipay data shows that more than 10 million offline businesses —more than 90% micro, small and medium sized - benefited from these vouchers (Xinhua, 2020a).

Safety & Society Box 2• In a March 2020 survey of 8000 U.S. essential workers, 56% said they received protective gloves from their employer
and only 19% received masks (Harvard Kennedy School, 2020).
• In one 2020 survey of 2000+ healthcare workers worldwide, 50%+ reported missing at least one item of PPE (Tabah etal., 2020). Amnesty International found that 7000+ healthcare workers worldwide had died due to Covid-19 as of
September 2020.
• The OECD (Organization for Economic Cooperation and Development) estimated that unemployment across its 37
member nations hit nearly 13% in 2020 (up from 5% at the end of 2019), and reported that Covid-triggered reductions
in working hours worldwide last year were 10 times worse than during the 2008 financial crisis (OECD, 2020).
• UN-Habitat reported that, as of late 2020, the world's homeless numbered 100 million while 1 billion people were livingin “inadequate” or “overcrowded” conditions (Ranney & Gold, 2020). World Economic Forum reported that 20,000
Indian citizens had been evicted from March to August, and that 8000 had been evicted in Nairobi Kenya alone. In
addition, the US faced the worst housing crisis in its history last year, with 40 million US citizens “at risk” of eviction in2020 (Letzing, 2020).
• United Nations reported slowdowns and negative progress on nearly all of the 17 Sustainable Development Goals in
2020, raising doubts about the viability of the intended 2030 deadline (United Nations, 2020).

Safety & Society Box 3
The world was astounded when China's Huoshenshan Hospital was completed in just 10 days in February 2020, offering
1000 beds to treat Covid-19 patients. In addition to infrastructure and medical equipment, the hospital required
state-of-the-art communications connectivity. Huawei deployed emergency 5G connectivity in a mere three days, a
process that typically requires one month. Huawei donated approximately 80% of network communication equipment toguarantee high-speed data access and acquisition, saving lives by enabling remote consultations and monitoring ofpatients. (Huawei, 2020).

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Looking ahead, businesses are finding a new role to play in collaborating with healthcare providers to step in where
over-stressed governments have left off. One of the most urgent ways companies can help is to facilitate the safe, smooth
and widespread implementation of Covid vaccines. In January 2021, Bloomberg reported that 17.5 million doses had
been administered in 38 countries worldwide, but added that “delivering billions more will be one of the greatest logisticalchallenges ever undertaken.” Supply is a challenge, and the leaders of less developed countries are starting to protestthat their richer peers have locked up the global supply for months and even years into the future. As we look to emerging
economies to fuel the next decades of economic growth, we must carefully attend to their basic security and safety needs.
Business leaders can seize the opportunity to proactively protect their employees and business partners worldwide byhelping to facilitate safe and smooth vaccinations. As we wait for Covid vaccinations to arrive, employers can organize
worksite vaccinations against flu and other illnesses to help workers avoid the need for non-Covid hospitalizations (CDC,2020). Those in the medical sector can support equitable vaccination programs like COVAX — led by The Vaccine
Alliance Gavi and World Health Organization — which aims “to immunize the 20% of people most vulnerable to the virus
worldwide” by means of coordinated purchasing that sidesteps the current practice of unilateral national negotiations(Nature, 2021).
Safety & Society Box 4
Chinese tech companies rapidly developed software for Covid contact tracing, allowing businesses to reopen quickly,
and consumers to feel safe while in public. The red-yellow-green Hangzhou Health Code was first introduced by Alipay
on February 11, followed quickly by city specific codes in other Zhejiang cities and prefectures. Within a week, 100 cities
across China were using the digital health code system (Xinhua, 2020b).

One piece of good news for executives struggling with tensions of social and fiscal responsibility: Institutional
investors now analyze social risk as a determinant of financial value, and increasingly seek to invest in companies thatmanage social challenges well. Edelman's 2020 Trust Barometer Special Report — which polled 600 institutional investors
in six countries — together managing US$20 trillion+ in assets — shows that “S” (Social) is now considered the mostimportant indicator in ESG metrics — and is a meaningful standard to measure impact. Executives must do more thaninvest in social programs, however. The public expects them to advocate for change. 92% of respondents in the Edelman
study agreed that business leaders “have an obligation to use their power and influence to advocate for positive change
in society” (Edelman, 2020).
Climate Change
Though Covid-19 dominated the news headlines in 2020, climate change maintained a steady presence. We
highlighted scientific reports of climate risk in last year's trends chapter; what drives interest this year is growing
willingness of the financial sector to fund the transition to a low carbon economy, plus coordinated global government
action in response to a five-year review of the 2015 Paris Accord. Post-Covid green recovery plans and climate justice —assuring the wellbeing of communities most vulnerable to climate risk as well as those most vulnerable to economic shocks
from the shift to renewable and clean energy — are both high on policymaker agendas. Though poverty and hunger
declined dramatically in recent decades, in large part because of China, analysts fear that Covid and climate change will
reclaim much of the gain. Going forward, expect to see a rise in coordinated public/private efforts to tackle thesechallenges, much like China's tech industry helped over the past decade to achieve China's 2020 poverty eradication
targets.
Climate risk is foremost among investor concerns. Edelman's (2020) survey respondents indicated an intent toaccelerate client engagement on climate risks within the next six months. Research on carbon emissions validates theirworry. Though total global emissions fell by 8.8% early in 2020 as lockdowns were imposed to slow the spread of the virus,
they quickly rebounded once economic activity resumed. In China, where the shutdown was short, annual carbon
emissions are down by only 1.7% for the year (Carbon Brief, 2020). With economists predicting renewed growth globallyin the second half of 2021, the pandemic's carbon reprieve won't last. Pressure is mounting for global leaders to do more.
In December 2020 the United Nations and several supporting countries hosted a Climate Ambition Summit with thegoal of accelerating progress on the 2015 Paris agreement. In the weeks leading up to and following the summit a numberof countries announced new commitments for achieving net zero emissions within three to four decades. More than 25
countries and the European Union have formalized commitments in policy and law, including China's 2060 net-zerodeadline announced in September by President Xi Jinping (China Daily, 2020). More than 100 other countries have madeless binding commitments, but the summit brought new pledges and ambitions. Countries also revised their national
plans for cutting carbon emissions by 2030. Xi raised the 2030 target for carbon intensity cuts to 65% relative to 2005
levels, up from an earlier 55% commitment (Xinhua, 2020c). The European Union raised its target to 55% relative to 1990

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levels, up from a 40% target made in 2014 (European Commission, 2020).
Both China and Europe are linking the mitigation of climate change to coordinated green growth strategies enabledby policy and legislation. China's 14th Five Year Plan and a new law on energy planned for 2021 will determine the likely
impact on industry. The European Green Deal aims to make Europe the first climate-neutral continent by 2050. A new
Climate Law is expected in 2021 to support the plan. Meanwhile, United States President Joseph Biden put climatechange among the top four priorities of his presidential term. Two weeks after taking office he signed an executive orderto rejoin the Paris Accord, and advised his administration to begin the work of steering the US economy toward net-zeroemissions by 2050. All of these plans face months of political wrangling to reconcile conflicting priorities across regionaland national geographies, as well as between green, brown and black industries. Not least is the challenge of developing
green tech at the national level, while globally promoting the benefits in a way that does not trigger protectionism and newtechnology wars (Holzmann & Grunberg, 2021). Nevertheless, the will to craft globally coordinated responses to climatechange is real. Look to COP26 negotiations in Glasgow in 2021 to move the bar even higher.
Coordinated finance is viewed as a lynchpin for putting these national plans into action, and 2020 brought renewed
momentum for mobilizing the critical resource. In December, the U.S. Federal Reserve System joined the 80+ members of
the Network of Central Banks and Supervisors for Greening the Financial System whose group members are responsible
for supervising all “global systemically important banks and two thirds of global systemically important insurers”. One of
the network's goals is to mobilize mainstream finance to support the transition to a low carbon economy (NGFS, 2020).
Encouraging reports from the financial sector show the trends already happening: Both financial products and investor
interest are growing rapidly. Syntao Green Finance and China Social Investment Forum (China SIF) report 22.9%
year-on-year growth in the size of China's sustainable investment market, reaching a 2020 total of ¥13.71 trillion (Syntao
Green Finance, 2021). Financial news outlet Pensions & Investments reported in mid-2020 that global ESG-data driven
assets had almost doubled over four years to hit US$40.5 trillion, and there was approximately 150% increase in thenumber of ESG strategies launched in the Morningstar investment universe in 2019, compared to 2016 (Baker, 2020).
While many products still follow the strategy of negative/exclusionary screening, growth is strong among those trying tointegrate ESG performance with finance. This is matched by executive sentiments. Now that resource efficiency has gonemainstream in company operations, executives are starting to seek competitive differentiation and improved access tocapital from their sustainability strategies (McKinsey & Company, 2020, p. 53). More than ever, companies stand to benefit
from moving CSR from the sidelines into mainstream value creation.
Climate Change Box 1• A new report in Science magazine indicates that low carbon investments needed to put the world on track for net-zeroemissions by 2050 could be as low as 10% of the currently declared US$12 trillion in worldwide pandemic recovery
packages (Andrijevic et al., 2020)• European states agreed in July 2020 to fund climate change initiatives by allocating 30% of a combined Euro 1.75 billion
budget for long-term Green Deal programs and short-term Covid recovery programs (International Institute for
Sustainable Development, 2020)• In December 2019 the U.S. Congress approved US$60 million in dedicated funding for carbon removal technology(WRI). Newly elected President Joseph Biden plans for much more. In campaign speeches he laid out a plan for US$2
trillion in funding to combat climate change by investing in infrastructure and industries of the future (Mufson, 2020)• China's National Green Development Fund, launched in mid-July by the Ministry of Ecology and Environment, Ministryof Finance and Shanghai Municipal Government, raised more than ¥88 billion in phase one to invest in national strategic
projects like the greening of Yangtze River basin (Reuters, 2020).
• In his 2021 annual letter to CEOs (https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter), Blackrock
Chairman Larry Fink called the transition to a climate neutral economy “a historic investment opportunity” and reiterated
the need for better data reporting that will enable investors to direct capital in ways that reduce climate risk and promoteclimate solutions.

Climate Change Box 2
An important new argument for limiting global warming is to block the potential release and reactivation of previously
frozen and dormant “zombie” viruses if the polar ice caps melt. In 2020, Greenpeace reported that scientists revived
deep-frozen bacteria and microbes after thawing in a laboratory setting. Although there is no evidence of immediate
largescale risk, the initial findings offer a compelling new human health reason to contain global warming (Harvey, 2020).

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2021 CEIBS CSR White Paper| Track Trends with ESG Reporting
Annual reporting helps executives to track the evolution of these and other evolving signals of change. CSR teams
can boost the strategic impact of their work if they avoid self-congratulatory CSR summaries each year and instead makeformal ESG Reporting the norm. Fortunately, experts have worked diligently for decades to develop and refine themeasures and metrics most relevant to keep companies in line with societal and planetary needs, and also to pinpoint theissues most pertinent to the longevity of particular industries. If your CSR team is not learning from multi-stakeholder
reporting protocols developed by GRI, ISO and CASS, as well as financial reporting protocols developed by SASB, IIRC
and TCFD, now is the time to start. These groups have done the hard work of studying cross-industry data produced overdecades to filter out the most material ESG issues that can either create value or destroy it as the world pivots toward new
realities. CSR teams must work closely with accounting, finance and operations teams to amass relevant data on thecompany's exposure to ESG disruptors as well as company contributions to ESG improvements. To assure that ESG
insights are more than window dressing for the benefit of journalists and auditors, CSR leaders can report directly to aboard committee dedicated to sustainability — one staffed with Directors who have specific sustainability expertise andexperience. 2020 saw a 17% year-on-year increase in the number of sustainability boards among the top 100 companiesof the Fortune 2000 list, with much of the increase attributable to Chinese firms (The Sustainability Board Report, 2020).
China lags developed economies in the quantity and quality of ESG reporting but the stage is set for the gap to close as
global government and governance groups promote the growth of green finance (Syntao Green Finance, 2020). Now is
the right time to prepare for the accelerating change in ESG reporting.
An impediment to corporate reporting is the number and variety of reporting initiatives, but the past year broughtnews of mergers and consolidation. The Value Reporting Foundation — newly formed from a merger of SASB and IIRC —will provide investors and corporates with a consolidated reporting framework closely focused on integrated reporting(i.e., financial, strategic and ESG), value-creation and long-run sustainability (Howell, 2021). There are prospects for
additional reporting initiatives to join the foundation over time. Experts foresee a day when we will have globally accepted
and unified ESG reporting standards akin to contemporary GAAP accounting principles, though there remains much work
to be done. Current discussions and mergers take us steadily in that direction.
Reporting Box 1: ESG Reporting Resources• GRI: Global Reporting Initiative, https://www.globalreporting.org/• ISO: International Organization for Standardization, https://www.iso.org/home.html• CASS: Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises ('CASS-CSR'), https://www.ca
rrotsandsticks.net/reporting-instruments/guidelines-on-corporate-social-responsibility-reporting-for-chinese-enterprises-cass-csr/• Value Reporting Foundation, formed from the recent merger of SASB: (Sustainability Accounting Standards Board,
https://www.sasb.org/) and IIRC: (International Integrated Reporting Council, https://integratedreporting.org/)• TCFD: Task Force on Climate-related Financial Disclosures, https://www.fsb-tcfd.org/

Reporting Box 2World Economic Forum has worked in collaboration with multinational accounting firms Deloitte, EY, KPMG and PwC todevelop a set of common Stakeholder Capitalism metrics (https://www.weforum.org/stakeholdercapitalism) that will allow
the public and investors to hold firms accountable for their overall ESG performance and will also allow firms todemonstrate their progress in comparison to competitors. During the 2021 WEF forum, more than 60 multinational firms
publicly commited to support these metrics.

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COMMITMENT TO SHARED VALUES AND PURPOSE
The pandemic's choppy wake has forced business leaders to reflect on their company's 'true north', that is, theshared values and ultimate aims of the business that offer inspiration, hope and tangible support to continue when things
get tough. Long-trending downturns like we've experienced with Covid-19 can sap energy and motivation from even themost optimistic among us, and starve even the strongest businesses of funds. Meaningful shared challenges and goals,
underpinned by unshakeable values and strong company cultures help to maintain forward momentum and temper thesometimes-debilitating stresses of the immediate situation. In PWC's 2020 global survey of 10,000+ consumers,
employees and executives in 6 nations, 71% of consumers and 94% of business leaders agreed that “companies today
share a commitment to creating an economy that serves everyone, not only those who profit financially.”
Edward Freeman (1984) advised in the 1980s that the accepted wisdom of shareholder primacy would best be
replaced by a more wide-reaching executive consideration of multiple stakeholder interests. Investors increasingly agree.
In Edelman's (2020) survey of 600 global institutional investors, 97% of respondents called multi-stakeholder governanceschemes “more conducive to delivering long-term financial returns than other models.” For years, executives adhered tonormative guidelines for managing stakeholder relations relative to each one's power, legitimacy and influence (Mitchell
et al., 1997). Yet the systemic nature of intractable challenges like Covid-19 cries for deep coordination among players
whose interests are not weighted by status or strength. Rather than dispassionately managing stakeholder relations withself interest in mind, resilient executives reinforce partnerships based on shared interests and values.
Commitment Box 1
Freeman's Stakeholder Management Theory (1984) is commonly visualized as a series of concentric circles with the firmin the center, surrounded by those who have financial ties, and more distantly by those with less direct interests. One
contemporary take on the stakeholder model, developed by thinktank and consultancy Economics of Mutuality, placescompany purpose at the center of an ecosystem, surrounded by stakeholders — including the target firm — who shareinterests, demands and resources that jointly determine ecosystem health. This perspective facilitates a search for new
business opportunities by coordinating and pooling stakeholder resources to solve ecosystem pain points and growth
inhibitors (Economics of Mutuality, 2020).

Government

Media

Investors

Company
Employees

NGOs

Suppliers

Communities

Customer

Competitors

Stakeholder Perspective

Other People
and Institutions

Our Planet

PurposeOur Company

Ecosystem Perspective| Reach Out to Bolster Shared Interests
When asked how she responded as Covid-19 struck China in the early days of the pandemic, Jane Sun — CEO of
Asia's largest travel agency Trip.com — emphasized her immediate moves to protect customers, employees and partners(Aspen Institute, 2020). When the company's call center was suddenly swamped with 20 times its normal volume,
employees were overwhelmed with requests for service-provider refunds. Sun quickly approved refunds for worldwide
medical staff and Covid-victims, and then established huge relief funds for hard-hit customers and ecosystem partners
who lacked cash flow. Realizing that bottom-up solutions were not sufficient to address the challenge, she reached out to010

2021 CEIBS CSR White Paper

global partner hotels and airlines whose leaders were not yet aware of the spreading crisis, eventually securing top-down
coordinated action that reassured consumers of refunds, alleviated stress on front-line employees, and kept technicalsystems of all partner firms from crashing.
As the pandemic wears on and new more contagious variants of Covid emerge, McKinsey reminds leaders to reachout to workers across the organization, who may be suffering from unacknowledged “Covid fatigue” (DeSmet et al., 2020).
Among the suggestions:• Express bounded optimism: share meaning about current realities and views of what the new future might
eventually bring• Listen attentively and compassionately: get beyond the immediate “I'm fine” to hear signs of distress andacknowledge that such feelings are acceptable• Emphasize human connections and caring: go beyond words and briefings to actually bring people together inmeaningful ways

| Clarify Company Purpose
The wedge that channels shared values into action is an over-arching sense of shared purpose, and businessconsultants are working hard to transform this buzzword into usable frameworks and guidelines. Research gives impetus
to their efforts, with evidence that purpose-driven companies grow faster (3x) than competitors, gain more market share,
win higher workforce and employee satisfaction, and even show more innovativeness (Deloitte, 2020). Others show that
employees with a “strong connection” to the company's purpose are twice as likely (millennials are 5 times as likely) tostay with that employer (PWC, 2016). McKinsey & Co. has found that employees who feel the company's purpose isactivated and aligned with theirs, are not only more loyal and engaged but also willing to advocate on the company's
behalf (Gast et al., 2020).
Despite all the interest in purpose, operational definitions and playbooks for effective practice remain elusive. One
resource to note is the Enacting Purpose Initiative (EPI: https://enactingpurpose.org/) developed by researchers at Oxford
University and the Berkeley Law School at University of California along with a number of companies and professional
service providers (Eccles, 2020). EPI's first report offers advice for boards, senior executives and investors, including aframework aptly named SCORE which encourages purpose statements that are Simple, Connected to strategy and capital,
Owned by the board and other senior executives, Rewarded and Exemplified in both quantitative and qualitative terms. The
work reflects views and opinions of major UK and continental European businesses. A new report reflecting the views ofUnited States executives and institutions is expected in 2021. In another attempt to put purpose to practice, McKinsey
compiled a list of tough questions to ask business units, along with corresponding proof points to assess the gap between
your company's intentions and the experienced reality (Gast et al., 2020). In the wake of Covid-19, expect more insightsfrom purpose-advisories, plus more pressure from society to clarify your company's purpose and demonstrate with hard
evidence how it drives partner relationships in ways that are both meaningful for society and material for investors.

ADAPTATION AND ACTION
Resilient leaders adjust and adapt as new situations evolve. It's pointless to track the early signals of systemicchange and then cling to existing safety zones because they are profitable, efficient and well-understood. Resilience callsfor experimentation, especially as crises unfold. Rather than cutting back to conserve resources, today's resilient leaderscollaborate to test new understandings and new ways of doing. Critically, they allocate time and finances to create the slackthat incubates new ideas and brings experiments to market (Hamel & Valikangas, 2021). Public health was initially slow toreact to Covid-19 in part due to funding cuts for global public health institutes and services. Companies have also cut
back on R&D time and budgeting in recent decades to pursue profits and efficient solutions to problems. Efficiency
hinders resilience, though, since it lowers the number of options to try when new directions are needed. Post-Covid
recovery is an ideal time to test new ways of living with fairness and equity, and well within planetary boundaries.
Throughout 2020, thinktanks, research centers, and non-profits released well-researched integrated plans for the future,with the mantra that this is the “decade to act” if we are to reach the 2030 timeline for achieving UN Sustainable
Development Goals (United Nations, 2020). These groups now seek business collaborators to bring their ideas to life.
Pioneering companies are opening their purses and datasets, and joining collaborative efforts to stimulate real change.②② We acknowledge the Greenbiz 350 podcast, “Thinking long-term with three sustainability think tanks” for bringing these initiatives to our attention.

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Participants in the newly-launched Drawdown Labs (https://www.drawdown.org/sites/default/files/Drawdown-LabsOverview.pdf) are working to implement and scale the most promising methods of removing carbon from the atmosphere(Project Drawdown). Project Drawdown has ranked dozens of solutions according to rigorous assessments of scalability
and feasibility. Drawdown Labs' partners — including Allbirds, Copia, Google, Grove, Impossible Foods, Intuit, Lime, Trane,
and design group IDEO — pool ideas and resources to scale ideas that reach beyond the oft-touted target of net-zero by
2050. Realizing that science-based targets for lowering emissions are based on the overly idealistic assumption that allcompanies globally will do their fair share, lab partners aim to compensate for the non-compliance of others. As one
example, business and financial software maker Intuit declared a “50 by 30” plan to phase out all its own greenhouse gas
emissions by 2020, “and help the broader world reduce emissions by 50x this amount, within ten years”. Drawdown
researchers help partners find solutions that sequester carbon for very long periods of time, and that engage every work
unit and employee in the quest rather than delegating the task to isolated teams. At a time when carbon drawdown
procedures and technologies are garnering increased funding support from governments and investment funds, Drawdown
Labs is offering a roadmap to the most promising new ideas. Bold commitments and collaborative implementation plans holdout new hope for humanity to win the race of keeping greenhouse gases within sustainable levels.
Another group seeking coordinated systems change is B Movement Builders (BMB) (https://bcorporation.net/bmovement-builders), a coalition of large, publicly traded Multinationals (MNCs) — each with revenues topping US$1
billion — dedicated to the creation of an “Inclusive, Equitable & Regenerative Economy”. Whereas most of the 3700+
certified B Corps are small and medium-sized companies, B Movement Builders operate globally and at scale. Though
not 100% certified as B Corps — which requires a legal commitment to work in the interests of all company stakeholders —builders make a 'Declaration of Interdependence' and commit to making documented progress on three or more UN
SDGs. MNCs Natura and Danone are mentors in the initiative, having certified at least 30% of their businesses throughsubsidiaries. Marcelo Behar, vice president for sustainability and group affairs at Natura, said his company realized theneed for collaborative effort to achieve its Vision 2030: Commitment to Life — a 10-year timeline to tackle climate change
and protect the Amazon, ensure equality and inclusion, and move the company towards circularity and regeneration(Greenbiz, 350). Through BMB, Natura can stay abreast of new innovations, share data and best practices, and jointly
advocate for policy to support their ambitious goals.
A&A Box 1
The Ellen Macarthur Foundation (https://www.ellenmacarthurfoundation.org) coordinated 65 players from the fashionindustry value chain, including brand owners, in a challenge to develop and market circular jeans by May 2021. The termsof the 'jeans redesign project' were set by the foundation's circular fashion team along with 80 denim experts. The
resulting jeans are made with safe, non-toxic innovative materials and designs that facilitate maximal resale and eventual
disassembly for recycling. Not only will the jeans reduce waste and pollution, they also greatly reduce the harmful effects
of chemicals on industry workers. Jeans were selected for this focused applied project because of their complexity andintersection with every part of the value chain, yielding lessons that extend to other garments.

A&A Box 2
Climate policy NGO Carbon180 (https://carbon180.org/) — spun out of University of California Berkeley - works with
policy makers, scientists and business to “champion and enact ambitious carbon removal policy”. One of their goals is tomobilize funds for research to lower the costs of carbon removal technology to less than US$100 per ton by 2025, sincecost is a major impediment to policy implementation. Long-term the group aims to transform carbon removal into awell-funded globally scaled industry.

A&A Box 3
World Economic Forum's Uplink project (https://www.weforum.org/uplink), launched at Davos 2020 along with partners
Salesforce and Deloitte, aims to accelerate action on the UN SDGs by crowdsourcing innovative solutions and linking
entreprenuers with a network of mentors, investors and collaborators committed to getting solutions to market. In its firstyear the project has run more than 15 innovation challenges, attracting more than 900 potential solutions and building acommunity of more than ten thousand users on its digital platform.

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WORKING TOGETHER FOR A RESILIENT FUTURE
As analysts warn that Covid-19 is a test run for recurring shocks that will define coming decades, make resilience a
key element in your company's toolkit. The three skills of realistic assessment, commitment to values and purpose, andactive adaptation to new realities will prepare your teams for abrupt shocks, and will lead to more productive relationships
and partnerships for the future. CEIBS is proud to be part of your partnership network. Together we'll define the new
post-Covid norms for CSR excellence.
About the authors
Lydia J. Price is a Professor Emeritus at CEIBS, Laurie Underwood is a Senior Consultant at Sino Associates
Global and a Senior Associate Professor of Management at Xi'an Jiaotong-Liverpool University in Suzhou.
The assistance of CEIBS Research Assistant Aurora Mao is gratefully acknowledged.

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1125851045.htm· Xinhuab, “Alipay health code landed in more than 100 cities in 7 days, digital epidemic prevention ran out of "China speed” , February 19, 2020, http://www.xinhuanet.com/
enterprise/2020-02/19/c_1125596647.htm· Xinhuac, “A series of major climate policies have demonstrated China's commitment to green and low-carbon development” , December 12, 2020, http://www.xinhuanet.com/
politics/2020-12/14/c_1126860194.htm

014

CSR Practices of
CEIBS Alumni Companies

JD Logistics
Exemplifies Timely andCustomer-Centric Services
By Terence Tsai, Huang Xiayan and Liu Jie

Yu RuiCEIBS EMBA2015 Alumnus
CEO, JD Logistics“

JD Logistics is committed to its vision of becoming the most trusted
service provider of supply chain infrastructure in the world. For more thanten years, the company has demonstrated its attachment to improving thetoughest, most difficult but most valuable things in the logistics industry —infrastructure construction, optimization of the supply chain, anddevelopment of core technologies — with a view to improving the user
experience and enhancing the quality and efficiency of the industry.
JD Logistics believes in taking care of each employee to ensure thateach individual can work and live with a sense of dignity, happiness andaccomplishment. JD Logistics is dedicated to fostering win-win cooperation
with partners, boosting the real economy, and promoting harmonious
coexistence with environment. With the mission of “powered by technology
for global efficient circulation and sustainable development”, JD Logistics
has been unswerving in driving economic growth, environmental protection,and social harmony. JD Logistics proactively fulfills its social responsibility
in improving social efficiency, boosting high-quality consumption, driving
the digital transformation of the real economy, advancing supply-side
structural reform, promoting job creation, and revitalizing rural areas in aneffort to create a more efficient and sustainable future.

”

CSR Practices of CEIBS Alumni Companies

Abstract
In early 2020, caught in the sudden onslaught of Covid-19, Wuhan, a transportation hub connecting nine
Chinese provinces, was placed under lockdown. At this critical juncture, JD Logistics Group (“JD Logistics”)
gave full play to its supply chain logistics capabilities and technological strengths to marshal internal andexternal resources, and schedule urban delivery and last-mile delivery, keeping transportation routes — avital lifeline and economic backbone - running smoothly.
Hailed as heroes in harm's way, JD Logistics employees worked on the frontlines of Covid-19; JD Logistics
developed proprietary smart robots for transportation and delivery; its “smart” warehouse management
system harnessed big data analysis and predictive technology to prioritize the delivery of supplies orderedby major hospitals in Wuhan; with a daily sorting capacity of more than one million orders, the 'Asia No.1'
smart warehouse in Wuhan responded quickly: safeguarding a steady stream of medical supplies andcontinuity in production and everyday life in Wuhan …
This example serves not just to showcase JD Logistics' successful management of a major crisis, but rather
illustrates the important role the company played in maintaining a sense of calm for people, amid the chaosof the situation. JD Logistics' ability to maintain this steady keel, was not only the product of an accumulationof years of experience, but was testimony to the company's sense of mission and responsibility.

Contributing to the Fight Against Covid-19
With a Robust Logistics System
In 2007, JD Group set up its own in-house logistics system. Then, in 2017, JD Group spun this logistics arm off toform an independent subsidiary group 'JD Logistics' which was able to outside customers. In 2020, the dark backdrop of
the epidemic highlighted the value of a company like JD Logistics as a vital part of the country's social infrastructure
upholding the national economy and people's wellbeing. With the mission of “powered by technology for global efficient
circulation and sustainable development”, JD Logistics is committed to becoming the most trusted service provider ofsupply chain infrastructure in the world.

January 21

January 23

A pharmaceutical factoryin Hubei Province placedsome emergency orders,and JD Logistics
immediately arranged fortransportation.

Wuhan went into lockdown,
and more businessdepartments of JD
Logistics partnered withthe task-force.

2020
January 20

JD Logistics built atask-force foranti-epidemic supplies(“the task-force”).

January 22

January 25

Hubei launched a Level-2
public health emergency
response. JD Logistics
officially issued a notice onprioritizing the delivery oforders from medical
institutions.

JD Logistics opened specialtransportation routes to ship
rescue supplies from allover the world to Wuhan.

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2021 CEIBS CSR White Paper| Frontline employees' commitment to social responsibility
During the Spring Festival of 2020, a large number of logistics platforms and companies across China shut down,
and then postponed their opening, or sharply scaled back their delivery capacity. As a result, at the height of theepidemic, consumers were hit by order delays or cancelled deliveries. JD Logistics' promise of “uninterrupted delivery
during the Spring Festival break” for the eighth consecutive year therefore formed a pivotal component in logisticalsupport during the fight against Covid-19. JD Logistics employees, including drivers, couriers, and warehousing staff,
sacrificed their personal plans to stay at work and safeguard social stability and people's wellbeing.
At some special stations in Wuhan, delivery workers were often the only bridge connecting local residents withexternal supplies and served as a vital lifeline for ensuring supply of medical equipment to local hospitals. Many of thecompany's drivers were already accustomed to the relentless pace of Chinese Lunar New Year deliveries, and this year
was no different: in fact, in some areas the average daily parcel volume for the 2020 Spring Festival even exceeded thepeak reached on JD Group's 18 June anniversary.1
In Wuhan the company had a delivery team of 99 young couriers. During the epidemic, the team worked almost
non-stop for 90 days, delivering most of the emergency supplies shipped to Wuhan to major hospitals and thousands ofhouseholds. They delivered 6,000 tons of rice, noodles, grains, oil, vegetables and other life necessities to over 3 million
people. JD Logistics noted, “The might of our country depends on the might of our many individual households. As an
industry leader, we have the obligation to be on the frontline, and fight this crisis: it's our responsibility and our duty!”2 In
April 2020, Wuhan's delivery drivers were awarded the 24th Chinese Youth May 4th Medal (Organization), the highest honor
for outstanding young Chinese people, jointly conferred by the Central Committee of the Communist Youth League of China
and the All-China Youth Federation. The Medal represents the noble character and values embodied by Chinese youth.
Nevertheless, the resolve of each of these young employees was also a reflection of their belief in the corporate
culture, responsibility and values of the company. Keywords, such as “a great enterprise”, “dignity”, “a decent job”, and“a comfortable life for your families”, embody the values JD Logistics instills in its frontline employees. JD Logistics is oneof the few companies within the industry to make employee contributions to pension funds, medical insurance,
unemployment insurance, and maternity insurance, and insurance against on-the-job injuries and the housing provident
fund for frontline couriers; besides, the Company furnishes them with a range of industry-leading benefits, including theaccidental injury insurance, summer and winter bonuses, housing subsidies, and special subsidies for employees
working during the Chinese New Year.
Since 2014, JD has set up a fund to give employees working during the Spring Festival extra money, to allow themto have their children with them during the festive period. By 2020, the cumulative investments in this scheme exceeded¥500 million, allowing nearly 50,000 employees to spend the Spring Festival with their families.
In addition, when employees were obliged to continue making deliveries during the epidemic, JD Logistics ensured
they were looked after properly both in terms of their health and safety. The Company offered 70,000 masks to its
employees in Wuhan during the New Year's Day, and after the city was sealed off, quickly stocked up on emergency
supplies, arranged for the disinfection of all venues and equipment, regularly tracked the health of the staff on duty, andgave them guidance on anti-epidemic efforts. In the first quarter of 2020, JD Logistics purchased more than 10 million
masks and doled them out to frontline employees; during the epidemic, the Company spent more than ¥100 million on
anti-epidemic supplies for employees.

JD employees delivered anti-epidemic supplies

019

CSR Practices of CEIBS Alumni Companies| JD Logistics' supply chain capabilities: solid infrastructure and smart technology
During the epidemic, frontline employees offered timely and reliable delivery services to the public and medical staff;
even under the circumstances of city lockdown and suspension of production, JD Logistics was still in a good position todeliver high-quality logistics services, which owed a great deal to its supply chain excellence achieved over the years.
Logistics supply chain system across China
The supply chain capabilities underpin JD Logistics' strengths. With a logistics supply chain system put in placeacross China, the Company has worked out an integrated warehousing and delivery model, which enables it to directly
place the goods leaving the factory gate into the warehouse closest to a consumer in order to “shorten the delivery chain”
and reduce delivery times.
Over the years, JD Logistics has established six highly coordinated networks: a warehousing network, integrated
transportation network, distribution network, bulky item transportation network, cold-chain logistics network, and across-border transportation network, with services covering almost all people across China. While building trust between
Chinese e-commerce platforms and consumers, JD Logistics redefined the logistics service standards with time-sensitive
products and home delivery services, such as the “211 program”, which stood for 'same-day delivery for orders placed
before 11 a.m. and next-day delivery (before 3 p.m.) for orders placed before 11 p.m.'.
As of September 30, 2020, the Company was operating more than 800 warehouses across China, which, coupledwith the cloud warehouses, represented a warehouse floor space of about 20 million square meters, and was managing
28 'Asia No.1' large-scale smart warehouses. Hu Wei (EMBA2019), vice president of JD Group and president of JDIntelligent Industry Development Group, said, “We oversee our smart logistics parks from planning to operations. The
closed-loop service system makes them much more convenient and efficient than leased logistics parks. As a logistics
carrier, our logistics parks played a significant role in the fight against the epidemic.”
The daily throughput capacity of a single Asia No.1 warehouse reaches hundreds of thousands or even millions of tons.
During the epidemic, the 'Asia No.1' warehousing system enabled half-day, next-day, and immediate delivery of materials.
The Asia No.1 warehouse in Wuhan has a daily sorting capacity of more than one million orders, more than five times thatof a traditional warehouse, and has a smart operations system, a large volume of goods in storage, and a robust orderprocessing system, placing it on a strong footing for the fight against the epidemic. On the morning of January 24, 2020, JD
Group announced that it would donate 1 million medical masks and 60,000 medical supplies to Wuhan. The first batch of
400,000 medical masks were shipped from the warehouse in Wuhan to local medical institutions within seven hours.
In order to improve time efficiency, JD Logistics initiated a special service for “24-hour delivery to a thousand
counties and ten thousand townships” which would be available to consumers in counties, towns and villages. The aimof this service was to increase distribution channels for moving local agricultural and industrial products and boost
consumption and economic development in rural areas.

'Asia No.1' large-scale smart warehouse020

2021 CEIBS CSR White Paper

Capabilities for big data analysis and prediction
Transport in Wuhan, home to a crucial logistics hub in Central China, was frozen. Equipped with a range of smart
technologies, JD Logistics responded quickly to reorganize resources across its logistics network. The sudden Covid-19
outbreak put a squeeze on the supply of materials across China. With the help of its “smart system”, JD Logistics
leveraged big data to analyze the regional distribution of historical users and predict the quantity of orders in epidemic-hit
areas in an effort to prioritize the delivery of supplies to major hospitals in Wuhan.
The “smart system”, comprised a slew of big data technologies and algorithms and was capable of performing threefunctions: “smart design” for formulating emergency logistics solutions; “smart planning” for prioritizing the fulfillment oforders from key areas; “smart scheduling” enabling delivery vehicles to go straight to the frontlines of the epidemic. These
functions ensured orderly, timely and efficient transportation of supplies in Wuhan during the epidemic.
Extensive application of smart hardware
In order to lower the risk of infection among drivers working in epidemic-hit areas, JD Logistics introduced its
proprietary smart delivery vehicles to ship supplies to hospitals and key areas. On February 6, 2020, these smart delivery
vehicles brought medical supplies to Wuhan No.9 Hospital, completing the first smart delivery in Wuhan after the
Covid-19 outbreak. In some areas closed off due to the epidemic, JD Logistics used drones to restore the logistics service
that had been interrupted.
Exploiting the potential of its own supply chain technologies, JD Logistics launched the construction of a supply
chain management platform for emergency supplies on February 12, 2020, in response to the urgent needs of Hubei's
Epidemic Prevention and Control Headquarters. The platform was aimed mainly at visually tracking and efficiently
controlling the production, inventory, allocation and distribution of scarce medical PPE supplies, such as protective
gowns, masks and goggles, across Hubei.

On the evening of January 31, after receiving a call requesting thetransportation of 100 oxygen generators donated by the team led byAcademician Zhong Nanshan to Wuhan, JD Logistics conductedrail-road combined transport to ensure the fastest-possible delivery. On
the morning of February 2, this batch of materials arrived at Wuhan
Hankou Hospital. Academician Zhong Nanshan personally wrote a letterof thanks, “Thanks to JD Group for shipping urgently needed medical
supplies to Wuhan as fast as it could!”'Asia No.1' large-scale smart warehouse021

CSR Practices of CEIBS Alumni Companies

The “Symbiosis” Concept: Building a Sustainable Business
There is an ancient Chinese saying which says that “just as a single tree cannot make a forest, a flower cannot makea spring.” As such, JD Logistics advocates business “symbiosis”, which is based on the idea that upstream anddownstream partners should work together to form a sustainable global logistics ecosystem.

| The Green Stream Initiative for harmonious coexistence between mankind and environment
In 2017, JD Logistics, together with nine other major brands, launched the “Green Stream Initiative for Global
Environment-Friendly Supply Chain”. JD Logistics partnered with upstream and downstream companies for paperless
operations, recycling and reduction of packaging consumables, development and application of new energy vehicle
technologies, photovoltaic power generation, and nationwide recycling of cartons, used clothes, and other reusable items
in order to reduce waste, save resources and energy, and lower carbon emissions.
In 2018, JD Group upgraded the Green Stream Initiative (GSI) to a sustainability strategy that focused not only on
green logistics and ecosystems, but also on the “Planet”, “People” and “Profits” related to sustainable humandevelopment. Under the new GSI, JD would join hands with upstream and downstream partners in the logistics
ecosystem to create a better living space, foster an inclusive humane environment, and promote economic and scientificdevelopment in order to build a sustainable business society across the world.
In October 2019, JD Logistics announced that it had signed on to the Science Based Targets initiative (SBTi)
launched by the World Wide Fund for Nature (WWF), becoming the first logistics company in China to make good on its
commitment to setting science-based carbon targets.
On July 6, 2020, JD Logistics kicked off the first GSI Day within the logistics industry to further promote green thinking
and practices across the supply chain. As of December 2020, more than 200,000 merchants and hundreds of millions ofconsumers signed up to the GSI. In this sense, JD Logistics managed to broaden public environmental consciousness
without much fanfare.
Green packaging for waste reduction and recycling
In 2016, JD Logistics established the first “logistics packaging laboratory” within the industry, which aimed to develop
and use green logistics packaging materials. The lab compressed the size and area of packaging consumables to slash thecost of materials and save resources; it successively rolled out recyclable fresh food incubators and green stream boxes.
Energy-saving logistics park
As early as 2017, JD Logistics equipped the Asia No. 1 Smart Logistics Park in Shanghai with a rooftop distributed
photovoltaic power generation system, which supplied clean energy to automated three-dimensional warehouses, smart
robots, and automated sorting systems. The photovoltaic system could help cut carbon emissions by 40kg per minute on
average.3 The microwave induction LED lighting system, widely used in warehouses, enabled the lights to turn on when
staff sorted goods and automatically turn off when they left. This function could help save about 72% of energy, comparedwith traditional lighting equipment.
Zero-carbon-emission transportation
In 2017, JD Logistics brought in 1,000 new energy vehicles and put them to use in a dozen of large-and-mediumsized cities across China. In January 2018, JD Logistics was the first within the industry to replace its self-operated
logistics vehicles to and from Beijing with electric vehicles.
Green recycling for environmental protection
In 2016, in order to address excessive packaging used for mooncakes, JD Logistics took the lead in initiating carton
recycling in Beijing, Shanghai and Guangzhou, and then gradually extended the project nationwide. In 2019, JD Logistics
launched the “Used Clothing Recycling Scheme” in nearly 50 cities across China. As of June 2020, JD couriers recycled
3.5 million pieces of used clothes, toys and books.

• As of June 2020, JD Logistics cut down on plastic use by 50,000 tons by shortening the width of the tape
it used and reducing packaging; it saved about 1.3 million tons of paper through paperless operations inwarehouses, and carton reduction and recycling; it used recyclable packaging more than 160 million times,
reducing 67,000 tons of disposable packaging waste.
• As of June 2020, JD couriers recycled more than 10 million cartons nationwide.

022

2021 CEIBS CSR White Paper| Establishing business partnerships for social progress
Fu Bing (EMBA2018), vice president of JD Group and chief strategy officer of JD Logistics, said, “The epidemic has
made people realize that JD Logistics has participated in quite a few public wellbeing projects, including the Shopping
Basket Program and textbook delivery to children's homes.” While participating in the fight against the epidemic, JD
Logistics came to grips with the typical problems bedeviling the manufacturing industry, such as information silos, highinventory levels, and slow delivery, through a set of digital solutions to optimize supply chains, drive the industrial
economy, and upgrade social infrastructure. Fu Bing said, “Contrary to other logistics companies, JD Logistics leverages
cutting-edge technologies and supply chain management solutions from the outset to help our industrial partners shorten
the entire supply chain and make it more efficient.”
As an advocate and practitioner of “symbiosis”, JD Logistics is committed to building a logistics ecosystem that will
benefit partners, industries and society. In 2017, JD Logistics pioneered the “cloud warehouse” model, which was aimed
at sharing its management system, planning capabilities, operating standards, and industry experience with third-party
warehouses. JD Logistics conducted warehouse optimization to effectively increase the use of local idle warehouses sothat small-and-medium-sized logistics companies could avail themselves of its technological prowess, standards andbrands to improve their service capabilities. At present, more than 1,400 cloud warehouses are operating on the JD Cloud
Warehouse Platform. By working with international and local partners, as of December 31, 2020, JD Logistics establishedinternational transportation routes covering more than 220 countries and regions, and operated 32 bonded warehouses
and overseas warehouses. Besides, JD Logistics has rolled out “double 48-hour” time-sensitive service to ensure that
goods can be shipped from China to a destination country within 48 hours and then to local consumers within 48 hours.
Guided by the “symbiosis” concept, JD Logistics calls on upstream and downstream partners across the industry
chain to work together. JD Logistics provides them with access to open business scenarios, and efficient and flexible
business cooperation models in an effort to jointly develop market-oriented, smart and customized products andcomprehensive solutions. JD Logistics signed a strategic agreement or forged partnership with socialized logistics
enterprises to strengthen collaboration and integration in order to move beyond the existing industrial boundaries towards
a mutual benefit outcome.

Warehousing andlogistics estate

Warehousing andlogistics estateOpen symbiosis
platform

Industry chain

023

Trunk and terminal
delivery network

Industry chain

International transportation
networks

Internationaltransportation
networks

Trunk and terminal
delivery network

CSR Practices of CEIBS Alumni Companies

CSR: a Cornerstone for JD Logistics' Sustainable Development
In August 2020, five Covid-19-themed items from JD were permanently housed in the National Museum of China: theletter of thanks from Hubei's Epidemic Prevention and Control Headquarters; the letter of thanks from Academician Zhong
Nanshan; the first JD40006 smart delivery vehicle put to use after the lockdown of Wuhan; the letter of thanks to Jia
Shengzhi, a JD courier in Wuhan, from the medical team sent from Inner Mongolia to Hubei; a documentary about how totame the epidemic with digital technologies.4 In September 2020, JD Group CPC Committee was awarded the titles of“National Exemplary Organization in the Fight against Covid-19” and “National Exemplary Local Party Organization”.5
When the going gets tough, the tough get going. The sudden epidemic outbreak underscored the importance oflogistics infrastructure and the value of logistics.
“Customer first” informs JD's core cultural values. Sticking to the strategy of “leveraging technologies to improvecustomer experience and operating efficiency”, JD Logistics is committed to delivering “timely and more importantly,
customer-centric” services.
JD Logistics sees logistics not as a “flow of goods” but as a “network of bonds of love between people”. The
Company cares for employees to ensure each of them works with dignity and decency. In turn, they extend their love tocustomers with every smile, every greeting like “Hello, JD Logistics”, and every service.
In 2017, JD Logistics was present across all sections of society. As a result, it has a growing customer base, and isable to meet growing demand for personalized services. JD Logistics is keenly aware that it needs to shift its focus fromcreating services that can be provided through JD.com, to offering service demanded by customers. The company also
realizes it must move on from being a sales-driven company to being a product-driven one, providing a wider range of
product possibilities to different markets, by exploiting the cross-cutting potential of its underlying services, such as
supply chain, delivery service, express delivery, bulk items, cold-chain delivery, cloud warehousing, and cross-bordertransportation. In 2019, JD Logistics' external revenue made up more than 40% of its total revenue, bearing testimony to
its transformation from being an auxiliary logistics arm for a single company, to a standalone logistics giant. In the firstnine months of 2020, JD Logistics' external customers accounted for 43.4% of its total revenue.
How did JD Logistics achieve this growth? Does the company rely on its market acumen, agility, and keen foresight?
Although each of these traits are important, JD Logistics' success also has other ingredients. These can be describedas the value it places on and the responsibility it feels towards its consumers and employees, and the sense of mission
and responsibility it has towards industry and society. Having stood the test of the epidemic, JD Logistics is gaining
recognition and acclaim from all walks of life for upholding the business values of following the righteous path andassuming social responsibility.
In August 2020, JD Logistics upgraded its mission to “powered by technology for global efficient circulation andsustainable development”. JD Logistics will forge ahead to “become the most trusted service provider of supply chain
infrastructure in the world. 6
About the authors
Terence Tsai is an Associate Professor of Management at CEIBS, Huang Xiayan is a Case Researcher at CEIBS
Case Center, Liu Jie is a Research Assistant at CEIBS Dean's Office.

References
1 JD Logistics CEO Named Anti-Epidemic Heroes in His Eyes in Interview with CCTV Finance Channel, www.qq.com, https://new.qq.com/omn/20200423/20200423A0T
JB900.html?pc
2 Untold Story of JD Logistics' Anti-Epidemic Efforts Reflects Its CSR, www.chinanews.com, 2020-10-22. https://m.k.sohu.com/d/491055872
3 Cao Zhaoxia, JD Logistics Upgrades Green Stream Initiative to Monitor Packaging Recycling Process through RFID, www.xd56b.com, 2020-07-02. http://news.
rfidworld.com.cn/2020_07/ce5007d77e01eb8e.html
4 Five Covid-19-themed Items from JD Logistics Permanently Housed in National Museum of China, www.mydrivers.com, 2020-08-03.https://news.mydrivers.com/1/
704/704152.htm
5 JD Group Honored as “National Exemplary Organization in the Fight against Covid-19” and “National Exemplary Local Party Organization” , www.qudong.com,
2020-09-09. https://news.qudong.com/article/711597.shtml
6 Li Bo, JD Logistics' Transformation: Organizational Change for 200,000 Employees, www.zhihu.com, 2020-09-11. https://zhuanlan.zhihu.com/p/234318339

024

CEIBS Alumni Association
Creating Synergy ThroughA Joint Anti-Pandemic Effort
By Liu Geng

Wu Jinglian
Honorary Professor, CEIBS
Research Fellow, Development Research Center of the State Council of P.R.C.
Honorary President, International Economic Association (IEA)“

CEIBS is committed to the cultivation of businessleaders with an entrepreneurial spirit who proactively fulfill
their social responsibility.

”

CSR Practices of CEIBS Alumni Companies

Abstract“When a disaster strikes one locality, offers of help roll in from all quarters”, that's the distinctive feature of a
Chinese-style rescue. How to define roles, coordinate resources, and improve efficiency in the case of adisaster, that's a management issue. In 2020, the outbreak of the Covid-19 pandemic was a litmus test to
determine the ability of Chinese businesses to shoulder their social responsibilities. CEIBS alumni companies across a broad range of industries and a wide geographic area, by virtue of innovative ideas and strong
standing in their respective fields of expertise, emerged as a CSR force amid the national (and even global)
fight against Covid-19: the alumni companies, always around and supportive when needed and consistently
responsible, reacted to Covid-19 in an appropriately low-key, organized, and efficient manner.
The CEIBS Alumni Association (“the Association”) played a crucial role in this: as an inclusive and influential
platform, the Association has pooled successful public welfare and CSR practices developed by alumni
companies over the years, offering valuable insight about organizational forms and cooperation mechanisms
for joint CSR initiatives, and enabling alumni to move forward together based on common ground. In thisway, greater value can be created through synergy.
The Association referred to this action as a 'joint' anti-pandemic effort (in Chinese, “合”力抗疫, or, literally:“He” (join) li (force) kang (fight) yi (pandemic)). In Chinese, “合” “He” can be a noun, resonating with theschool's logo which also contains the character “合”. Meanwhile, “合” “He” can also be a verb, used forexample to describe the rallying of scattered strengths to form a single powerful force. More importantly, in
Chinese, the outcome of an action involving “合” “He”, is “全” “Quan”, which means a seamlessly connected'whole', encapsulating impartial kindness, unassailable integrity, and boundless love.

Comprehensive Process Linkage
Following the lockdown of Wuhan, the epicenter of the Covid-19 pandemic, at 10:00 am on January 23, 2020, theAssociation immediately issued a proposal to call on alumni chapters/clubs, alumni companies, and alumni to donate
medical supplies. On January 26, the Association set up an anti-pandemic task force. The next day, the task force divided
into subgroups focusing on coordination of decision making, donation, alumni emergency relief, medical supplies anddonations, donation information collection, news reporting, alumni coordination, and an online conferencing support
system, each of which corresponded to one pillar of the anti-pandemic effort. A professional, transparent and efficient
emergency relief force backed by the Association was thus formed.
The Association avoided any oversupply or misallocation of resources, such as information, medical supplies andfunds, on the strength of its information collection and screening, and supply-demand matchmaking. It also adhered tothe principle of ‘making sure help got to where it was needed, avoiding publicity, and making up for any shortages’ inoverall planning; trying to spot gaps that need to be addressed through charity work like a niche market①; and offeredadvice, such as ,‘do not scramble for domestic medical supplies in periods of scarcity, do not fight coronavirus without
tactics’, ‘focus more on other cities in Hubei and small- and medium-sized hospitals’, and ‘step up efforts to support thefront-line doctors and nurses’.
On January 30, the Fosun Public Welfare Foundation② (“Fosun Foundation”), the Beijing Chunmiao Charity Foundation③(“Chunmiao Foundation”) and the Association signed a cooperation agreement, laying a solid foundation for linking
processes. Fosun Group has abundant medical resources and an extensive global footprint, so, the selection,
procurement, import, allocation, and delivery of medical supplies were in its area of expertise. This time, Fosun Foundation
was tasked with global procurement of medical supplies, according to a framework agreement reached in less than a day
after Tian Ming (EMBA2005), President of the Association, and Guo Guangchang, honorary committee member of the
Association, raised the possibility of cooperation. Chunmiao Foundation, a 5A private philanthropic organization eligible for① 'Niche Market' can be translated as “利基市场/缝隙市场/壁龛市场/针尖市场” in Chinese. 'Niche' was borrowed from French, and can be transliterated as“利基”. Converting to Catholicism, the French often left a niche in an exterior wall for the Virgin Mary statue. Small as it was, the niche had clear borders
and marvelous details. Hence, 'niche' was later used to describe a specialized segment of the market.

② Guo Guangchang, Chairman of Fosun International Limited, enrolled in the CEIBS Global CEO programme in 2006.

③ Cui Lanxin, co-founder and incumbent secretary-general of Chunmiao Foundation, enrolled in the CEIBS EMBA programme in 2015.

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2021 CEIBS CSR White Paper

public fundraising, was responsible for building an online fundraising platform with the tagline ‘CEIBSers, let’s spread thelove in the fight against Covid-19’ to collect money from alumni.
The anti-pandemic effort led by the Association and underpinned by Fosun Foundation and Chunmiao Foundation
was in full swing: on January 31, the first day of its launch, the online fundraising platform collected over ¥12 million fromCEIBS alumni, alumni chapters/clubs, and alumni companies; on February 1, the first batch of medical supplies
purchased by Fosun — 135,200 British-made protective suits — landed in Chongqing.
On February 16, the Emergency Command Center of China Construction Third Engineering Bureau, the construction
contractor of Wuhan’s Leishenshan Hospital, turned to the CEIBS Alumni Hubei Chapter for help, claiming that thousandsof workers treading on roof tiles in a heavy rainstorm, right over the heads of coronavirus patients, were in urgent need of
N95 masks. In the circumstances, the Hubei Chapter’s President Li Jian (DIMP2003/CEO2015), Vice President Cao Chen
(EMBA2009), and Secretary-General Du Juan (EMBA2017) reached out to the Association immediately.
An hour later, the Association’s anti-pandemic task force found 3,000 foreign-made N95 masks bought by Fosun,
which were stranded at customs-clearance warehouses of Shanghai Pudong International Airport. The Association’s thenDeputy Secretary-General Qin Yi, and two alumni volunteers named Huang Jingrong (MBA2002) and He Pinjie(MBA2010) promptly headed for the airport for pickup.
Given the construction of Leishenshan Hospital was set to be completed four days later, and SF Express was notconfident of shortening the delivery time to less than two days, Wang Xiangang (EMBA2006), who would use a helicopter
to transport emergency supplies to Huanggang on the morning of February 17, asked the carrier to make room for 3,000
N95 masks.
On February 17, the helicopter took off from Shanghai at 11:00 am, and landed in Huangzhou district, Huanggang
city at 3:35 pm. However, it was more difficult to fly from Huanggang to Wuhan than from Shanghai to Huanggang, due tothe lockdowns of Huanggang and Wuhan. Successive batches of donated medical supplies were therefore delayed.
At this juncture, Zhang Feng (EMBA1999), the then Secretary-General of the Association, negotiated with the
Huanggang Covid-19 Pandemic Prevention and Control Command Center. Considering the Association donated 6,600
high-quality protective suits and 6,000 N95 masks to Huanggang on February 6, the city’s worst day, the person in chargeof the Command Center unhesitatingly sent ambulances. Finally, the Association’s latest batch of medical supplies arrived
in Wuhan at 7:00 pm.
This was just one of the emergency relief efforts initiated by CEIBS alumni. But it amply demonstrates the alumni’sstrong ability to mobilize people and resources, as well as organizational and managerial capabilities, as part of theirsocial responsibility. What’s more, a comprehensive process linkage manifested itself: demand response — global
procurement — customs clearance — supplies allocation — logistics — targeted delivery — audit — news reporting
throughout the process. This would not have been possible without the presence of CEIBS alumni in such a vast range ofindustries: the alumni from all walks of life had established 65 trade associations and clubs, which allowed theircompanies to link together, and share business practices or resources so as to find solutions to common challenges.

CEIBS Alumni Association donated anti-epidemic supplies

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CSR Practices of CEIBS Alumni Companies

Blurring of Spatial Boundaries
Geographically, CEIBS alumni's anti-pandemic effort constituted two concentric circles: on the one hand, medical
supplies poured into Hubei from all corners of the world; on the other hand, recipients of help were from Hubei at theoutset, and from around the world, at a later time.
The first circle indicated that CEIBS alumni procured medical supplies from around the globe to support pandemic-stricken Hubei. Fosun leveraged its presence in over 20 countries to purchase the scarcest protective clothing and N95
masks globally. Moreover, ¥15,355,400.07 from Chunmiao's fundraising platform flowed to Fosun for its global procurement, which benefited 138 hospitals in Hubei, medical teams dispatched to Hubei, and Hubei's pandemic prevention andcontrol authorities.
Some alumni even utilized their personal networks. For example, Li Jian, President of CEIBS Alumni Hubei Chapter,whose company had branch offices in Turkey, Thailand and Russia, urged the overseas offices to buy face masks andprotective clothing in bulk from local suppliers. More than that, he got 80,000 face masks and 5,000 protective suits sent
to Jingshan by courtesy of Zall Group, which he had a close personal relationship with.
Another case in point: Hani, a Turkish alumnus of CEIBS, drove more than 100 kilometers to purchase protective clothingfrom a local manufacturer. Cao Chen, Vice President of CEIBS Alumni Hubei Chapter, commented, “In mainland China,
medical supplies may trigger a scramble among our alumni chapters or alumni companies. Any hesitation, nothing left.”
The second circle was formed as the Association offered help to alumni and their children, and people in coronavirus-affected areas worldwide, without bias. The main beneficiaries included:
Hubei-based hospitals: hospitals in Wuhan and its adjacent cities or prefectures. Medical supplies procured by
Fosun Foundation alone were sent to 58 hospitals (excluding military hospitals, provincial hospitals, and hospitals affiliated with universities) scattered in 13 prefecture-level administrative regions of Hubei.
Medical teams dispatched to Hubei: amid a surge in Covid-19 cases in the hardest-hit Hubei province, China mobilized its medical resources nationwide to aid. As medical teams from other provinces or municipalities were dispatched
to designated Covid-19 hospitals in Wuhan, the Association promptly switched its donation focus to the needs of front-line
medical workers from outside Hubei. In response to this strategic adjustment, the school's alumni chapters donated medical supplies to medical teams dispatched by 102 hospitals across China, in an efficient and targeted manner, in thesubsequent two weeks.
Hubei's prefectures, cities and counties with finite medical resources. Some small and medium-sized hospitals, aswell as designated hospitals for treating Covid-19 patients, in other prefectures or cities of Hubei were struggling withpoor, inadequate medical infrastructure. In light of this, the Association's anti-pandemic task force earmarked funds
raised to buy a collection of negative pressure ambulances and donate them to eight hospitals in need.
Other organizations fighting Covid-19 at the forefront: the Association also lent a helping hand to 37 other organizations fighting Covid-19 on the front line (e.g. People's Daily and Blue Sky Rescue Team), which were dispatched from
Chongqing, Shanxi, Sichuan, Hebei and Beijing, etc.
EU countries: while China had the pandemic under control in March, the coronavirus swept across the world, and inparticular, swept across Europe. On March 25, the Association launched an initiative to support EU countries' combat
against the pandemic. Notwithstanding the differences in EU countries' customs clearance requirements, the uncertainty
of chartered planes' flight hours, and the inability to communicate effectively with Chinese embassies and consulates in
EU member states, the Association managed to donate a total of 223 ventilators to Spain, Greece, Czech, Malta, Hungary,Montenegro, and Ireland.
The Association, profiting from the largest and most influential alumni network among Chinese business schools, wasable to allocate resources and implement socially responsible practices anywhere in the world.

“

Remain true to original aspiration, make concerted efforts, emphasize practical results, and know
where to go and stop.
— Tian Ming (EMBA2005)
The Third President of CEIBS Alumni Association”

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2021 CEIBS CSR White Paper

Organization-wide Coherence
CEIBS alumni were a composite entity responsible for anti-pandemic actions: it gathered together alumni
companies that covered a variety of industries, creating school-company connections. Furthermore, it demonstrated
stronger coordination and resource scheduling capabilities than regular community organizations, owing to thecohesion among and dedication of CEIBS alumni.
The resulting organization structure was built on three essential elements, mirroring the Chinese character “合”“He” introduced above: the Fosun and Chunmiao foundations formed the top element of the character “人” , while
CEIBS was the supporting middle bedrock “一” , and all the other alumni, staff, and volunteers who took part in theeffort formed the body “口” , transforming the ideas into action.
In addition to the Association, Fosun Foundation and Chunmiao Foundation, whose contributions were enumerated
in the text above, the following 'entities' also shouldered considerable social responsibility:
Hubei alumni: CEIBS Alumni Hubei Chapter was in the vanguard of the anti-Covid-19 battle. The Hubei alumni not
only helped each other in the case of any shortage of face masks, but also reported back to the Association about thecity's demand for medical supplies, and facilitated the delivery of medical supplies from Changsha, Beijing, andShanghai, etc., to Wuhan, which could literally mean the difference between life and death.
Wang Danli (EMBA2012), Vice President of CEIBS Alumni Hubei Chapter, was among the first to donate facemasks to Wuhan's hospitals, e.g. Tongji Hospital, Union Hospital, and Jinyintan Hospital; the Hubei alumni contacted
food enterprises in no time and talked them into sending dumplings, mixed congee and other food to hospitals where
the quarantined doctors might otherwise eat nothing but instant noodles and pickles on New Year's Eve. 'Water afar
quenches not fire', only the alumni in Hubei can offer such instant help.
Besides, CEIBS Hubei Emergency Relief Team, on behalf of CEIBS Alumni Logistics and Supply Chain Association
and CEIBS Alumni Hubei Chapter, suggested the Sub-Committee for Freight Industry of China Federation of Logistics &Purchasing (CFLP) introduce measures to resume traffic and production. On January 30, the Ministry of Transport saidin an urgent notice that 'road should not be closed to traffic' during the pandemic prevention and control. This was an
example of how the alumni looked at the big picture when fulfilling social responsibility.

CEIBS Alumni Association donated anti-epidemic supplies

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CSR Practices of CEIBS Alumni Companies

Alumni chapters: in the space of just two weeks, 26 alumni chapters (in Shanghai, Beijing, Suzhou, Nanjing,
Zhejiang, Jinan, Qingdao, Shaanxi, Anhui, Guangzhou, Shenzhen, Dalian, Ningbo, Shanxi, Chongqing, Jilin, Hunan,
Yunnan, Guangxi, Henan, Sichuan, Fujian, Wuxi and Hebei, etc.) joined hands with the Association to donate supplies
to 102 medical teams dispatched from across China to Hubei.
The alumni chapters cumulatively donated 29,662 protective suits (including 10,050 pieces suitable for wearing toquarantine areas), N95 masks, protective eyewear designed for use in quarantine areas, goggles, and other scarce
medical supplies. Particularly noteworthy was the Nanjiang chapter: it made generous donations to the medical teamdispatched to Hubei from Nanjing, including ¥4.885 million in cash, and over ¥2 million in the form of articles of dailyuse, such as sterilizers, thermal underwear, adult diapers, sanitary pads, laundry detergents, disposable
underpants/panties, energy bars, skin repair cream, and facial masks.
Alumni volunteers: a team of volunteers was set up for the emergency with support from the CEIBS Alumni
Shanghai Chapter and CEIBS Alumni Gobi Association. The volunteers, together with their families, hurried to Shanghai
Pudong International Airport amid gusts of frigid wind to inspect, sort and dispatch medical supplies stored in transit
warehouses batch by batch. But for their help, the imported supplies would not have arrived in Hubei in time.
In the two weeks after the outbreak of the Covid-19 pandemic, Cao Chen, Du Kunwu (EMBA2019), Zhou Qinnian(EMBA2011), Zhang Xi (CMO2017), and other alumni volunteers, went to the Association's transit warehouses in Wuhan
every day or every other day: they dispatched the desperately needed medical supplies such as protective clothing
and masks to designated Covid-19 hospitals in Wuhan and its surrounding cities, thereby lending huge support to the
Association in its initial phase of donations.
Jiao Sheng (EMBA2008), Director of the Association's Social Responsibility Committee, Lv Zongsu, and Cao Shuli
worked together to build a reporting team, in a bid to update more alumni on the headway being made in the
Association's anti-pandemic effort, and encourage participation.
The Association's anti-pandemic task force stationed in Hubei: the Association created a coordination mechanism
at the outbreak of the Covid-19 pandemic. The anti-pandemic task force led by Zhang Feng and comprised Qin Yi, Shi
Li (MBA2006, Secretary-General of Love Alliance), and Cui Lanxin (Secretary-General of Chunmiao Foundation) worked
round the clock from the end of January to mid-March. Calm and unflappable, the task force devised donation strategy
based on a fresh assessment of the situation, executed on donation plans pragmatically, and organized assistanceactivities efficiently, exhibiting cohesion, combat effectiveness and conscientiousness, which were vital for success inthe fight against Covid-19.
All CEIBSers: CEIBS alumni, alumni companies, faculty, and staff, as well as alumni chapters/clubs andMBA/EMBA classes, contributed actively to the anti-pandemic effort through donations. Combined, CEIBSers donated¥26,843,690 in one month.
Alumni associations sometimes only maintain loose ties with their members, but the CEIBS Alumni Association
demonstrated remarkable cohesiveness. This can be attributed to the alumni's sense of social responsibility andidentity, and the Association's adherence to both traditional culture and modern management guidelines. In traditional
Chinese culture, classmates are important to anyone's social network. Compared to relatives and neighbors,classmates can provide greater support if one were to do or accomplish big things. Established as a modern
organization, the Association adopted modern management approaches to create a close bond and shared values
among alumni, thereby generating synergy. Meanwhile, the achievement of shared goals could give the alumni a senseof belonging and identity.

“

The alumni's willingness to take on social responsibility and the alumni associations' cohesive
collaboration have demonstrated CEIBSers' strong sense of responsibility, and helped us win respect!
— Zhao Lijun (EMBA2001)
The Fourth President of CEIBS Alumni Association”

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2021 CEIBS CSR White Paper

The Unity of Knowledge and Action
The alumni delivered a stellar performance in this joint effort to combat Covid-19, and are dedicated advocates ofsocially responsible deeds. For example, Tian Ming is the President of Landsea Group — a green pioneer that has
disclosed sustainability reports for consecutive years; Shi Li is a co-founder of Cedar Highrise. The kind of great students
are from a great school. The students and the school learn and benefit from each other in theoretical and practicalinteractions, fostering the unity of knowledge and action.
The school evaluates business success not only by the wealth accumulated, but also by the social value created. It
has been unwavering in its mission to cultivate responsible leaders, and disseminating CSR values in daily operations, or,through teaching, research, forums and other operating activities:
CEIBS is the first Chinese business school to make Business Ethics a compulsory course. The school treats CSR asa strategic priority critical to its development, encourages the faculty to undertake CSR-related research projects, andprovide firm support for teaching, research, case development, curriculum design, and alumni practices, with a view tobuilding CEIBS into an iconic business school that is leading in CSR research and practices in China and even Asia; theschool devotes itself to nurturing responsible business leaders, who are active in participating in public welfare programs
and launching socially responsible products and services.
The school has introduced CSR-related MBA-level courses on business, sociology, and environment since 2009.
MBA students has hosted CSR forums every year since 2006;
The CEIBS EMBA Programme made CSR the focus of the first course students take when entering the Programme.
The ‘CEIBS EMBA Award for Social Responsibility’ was established by the school in 2008 to encourage EMBA students
to take due social responsibility;
The school has launched the Women Entrepreneurship and Leadership for Africa (WELA) training programme for
African female entrepreneurs, and offered free courses to selected African entrepreneurs, in order to fulfill its social
responsibility in Africa and help advance local economic development through management education;
In November 2017, the school launched a CSR initiative, contributing to the development of China’s CSR theoreticalframework and evaluation criteria;
In 2019, the Association set up a public welfare alliance to expand the influence of alumni’s public welfare and CSR
efforts.
……
The Association, which serves to maintain ties between the school and its alumni, is the organizer of CSR activities.
In 2017, the third council of the Association was formed for the purposes of ‘service to alumni, contribution to CEIBS,
dedication to society’. It set five priorities — service to alumni, brand building, organizational development, platform
operations and social responsibility, and launched the CEIBS alumni enterprise CSR initiative, embarking on the next
exciting chapter for CEIBS’ public welfare and social responsibility efforts. Tian Ming said, “Entrepreneurship and social
responsibility will always be prioritized in the Association’s activities throughout the year.”Since its establishment, the third Association council, supported by the school, has initiated and organized a varietyof high-profile CSR campaigns, such as public welfare and social responsibility forums, CEIBE alumni public welfare
achievement exhibitions, and annual CSR report release conferences. The alumni companies delivered exceptional
performance in doing charity work, observing laws and regulations, launching innovative products or services, creating
job opportunities, protecting the rights and interests of employees, and offering promotion and growth opportunities for
employees, elevating CEIBS’ image as a responsible business school brand.
The alumni’s responses to Covid-19 offered a glimpse of their socially responsible practices in business operations.
They fought the war against coronavirus with an entrepreneurial spirit, used business management methods to enhance
efficiency, and applied business logic to institutional problems besetting domestic charity events. Their cohesion,competence and sense of responsibility were critical success factors in the fight against Covid-19.
According to Wu Jinglian, CEIBS Baosteel Chair Professor of Economics and spokesperson for CEIBS alumni CSR
campaigns, the governments, both Chinese and foreign, did not solve social problems to the public’s satisfaction, in spiteof the higher costs incurred. NGOs sprung up to address certain public problems, yet they only had a limited effect due

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CSR Practices of CEIBS Alumni Companies

to a lack of power and resources. Against this backdrop, for-profit enterprises that engage in CSR programs became
mainstream by the late 20th century. Hence, it was of great significance to highlight CSR in the school’s positioning.
Capability brings with it responsibility. Pursuant to the school’s CSR development plan, CEIBS will strive to build amodern international CSR platform with avant-garde ideas, noble values, and multiple functions such as informationexchange, academic research, education and training, integration of resources, recognition of the advanced units,
promotion of innovation, experience sharing, and formation of alliance. At the same time, the school will use its distinctive
case-teaching method to disseminate CSR values. In this process, the Association will pass on CSR values, disrupt
traditional models, and incubate CSR initiatives.

C E IBS' CSR pr acticeA j oi nt anti- pandem ic effor t
Comprehensive
process linkage

Blurring of
spatial boundaries

Organization-wide
coherence

Demand response—
global procurement—
customs clearance—
supplies allocation—
logistics—
targeted delivery—
compliance audit—
news reporting…

Wuhan, Hebei,
medical teams
dispatched to Hubei
from other provincesor municipalities,
organizations fighting
Covid-19 on the frontline, EU countries,
alumni dispersed
around the world…

CEIBS Alumni
Association,
Fosun Foundation,
Chunmiao Foundation,
CEIBSers,
alumni chapters…

T he u n i ty of knowledge and action
CSR education from the school, CSR practices by students; the students and theschool learn and benefit from each other, fostering the unity of knowledge and action
Representation of CEIBS Alumni Association's
anti-pandemic effort (CSR practice): “合”
About the author
Liu Geng is a Case Researcher at CEIBS Case Center.

032

Fosun International
Shaping an ESG Strategy
through Corporate Values
By Zhang Xiaoping

Guo Guangchang
CEIBS Global CEO2006 Alumnus
Chairman, Fosun International Limited“

Since its incorporation, Fosun has upheld core culturalvalues of “self-improvement, teamwork, performance, andcontributing to society”. A global company rooted in China,
Fosun actively pursues the creation of business value, whileattaching importance to corporate social responsibility, which
it incorporates into its sustainable development strategies.

”

CSR Practices of CEIBS Alumni Companies

Abstract
Fosun International Limited(“Fosun”, “the Group”) is an innovation-driven consumer group that was listed on
the Hong Kong Stock Exchange (00656.HK) in 2007. Fosun's corporate values are “self-improvement,
teamwork, performance, and contribution to society”. Informed by these values, the company has formulated
corporate and ESG strategies to underpin its three main businesses and embedded its culture of“contributing to society” into all aspects of its operations and management, and the hearts and minds ofevery employee. In 2020, the Covid-19 epidemic presented a true test of Fosun's commitment to contributeto society, but the company managed to live up to its professed values, first by offering aid to the stricken
Chinese city of Wuhan, before later going on to deploy resources globally in the fight against the virus.
Fosun's ability to deliver on its mission stands testament to its strong corporate culture and businessprowess, clear corporate and ESG strategy, and effective organizational structures and processes.

Contributing to the Global Relief Effort
During the Chinese New Year holiday of 2020, the Covid-19 epidemic broke out in Wuhan and rapidly spread to other
cities across China. Strict epidemic control measures were implemented nationwide, including city and village lockdowns
and road closures. In the space of just a few days, Chinese households were self-isolating at home, medical supplies
were rapidly depleted, hospitals were short-staffed, businesses were shut down, and transportation ground to a halt.

| Fighting on the front lines
In the early days of the outbreak, Fosun identified Wuhan and several other hard-hit areas as the “front line” of the fightagainst the epidemic. The company rapidly mobilized its global resources including medical supplies and professionals,
transportation systems, and personnel; it also established a pandemic war-time command center to safeguard deliveriesof supplies and protect frontline workers, including medical staff, community workers, and the police.
On January 24, 2020, Fosun scrambled to form a task force to procure and deploy medical supplies globally. The
force, which was led by Chairman Guo Guangchang and Co-Chairman Wang Qunbin, created a procurement networkthat eventually spanned 23 countries, including Japan, the UK, Germany, Russia, France, and the US. This global supply
chain made it possible to source supplies quickly and efficiently. Indeed, Fosun's first batch of 50,000 protective suits
arrived in Shanghai just four days after it had placed an order in Germany.
Shortly after the outbreak, Fosun set about developing a vaccine for Covid-19. On March 15, Fosun Pharma
announced that its majority-owned subsidiary Shanghai Fosun Pharmaceutical Industry Development Co., Ltd. had beenauthorized by Germany's BioNTech SE to exclusively develop and commercialize its proprietary mRNA vaccine inmainland China, Hong Kong, Macau, and Taiwan. On March 26, the Covid-19 nucleic acid test kit developed by Shanghai
Fosun Long March Medical Science Co., Ltd., a wholly-owned subsidiary of Fosun Pharma, obtained emergency use
authorization from China's National Medical Products Administration (NMPA).

| Practicing corporate citizenshipAs the global number of Covid-19 cases soared, Fosun sought available flights around the world and created global
logistics solutions by both using charter flights and converting passenger aircraft to carry cargo through a strategic
partnership with China Eastern Airlines. On March 1, under its guiding principle that “all mankind is a community ofshared destiny”, Fosun moved from phase one of combating Covid-19 to phase two, under which it extended its domestic
efforts to the rest of the world and offered global humanitarian assistance.
During phase two, Fosun urgently deployed resources to assist in the global fight against the pandemic. As of April
7, 2020, Fosun had supplied 3.927 million items of PPE (such as face masks, protective suits, and test kits) to stem thepandemic in countries badly affected, including Italy, the US, France, Germany, the UK, Japan, and India.
To combat the pandemic, Fosun Foundation also joined forces with 107 charitable companies, organizations, andindividuals across the country to assemble a humanitarian response. These efforts were applauded by global leaders anddignitaries. In a letter of appreciation to Fosun, Germany's ambassador to China Clemens von Goetze wrote: “Fosun was
the first Chinese enterprise to contact the German Embassy and offer a helping hand.”034

2021 CEIBS CSR White Paper

From Roots, to Shoots, to Trees
There is an old Chinese saying that goes, “For a tree to grow tall and luxuriant, its roots must run deep and strong.”
Fosun's rapid response to the pandemic was the fruit of its deep-rooted ESG strategy, which it has cultivated rigorously
for over a decade. The strategy comprises six branches: quality management, EHS management①, responsible
investment, responsible procurement, responsible employer, and responsible CSR activities.

| Safeguarding development through quality control
Fosun views quality as the lifeblood of its success. It has instilled a culture of quality among its employees, with anemphasis on products and services and putting the customer first. The EHSQ② & Operational Excellence Department,
which is responsible for quality management, has published various normative documents, including guidelines for Fosun
member companies to establish product recall mechanisms. It has also established an oversight system to monitor the
product quality of member companies and supervise their compliance with local laws and regulations.
Fosun Pharma is an example of this focus on quality. It has implemented a product lifecycle management system thatboasts quality system audits and certification, quality risk management, product recalls, quality culture development, andquality training throughout the drug lifecycle, from development to technology transfer, commercial production, and endof life. In 2019, Fosun Pharma conducted a total of 17 quality audits, including six unannounced inspections, andcompleted the quality assessment of 8 medical device member companies.

| Integrating management through the EHS system
Fosun has implemented a comprehensive EHS system that covers employee health, environmental safety,
occupational health, fire safety, energy conservation, environmental protection, and other employee and workplacematters. The Group has issued various normative documents, such as the Fosun Group Environment, Health, Safety &Quality Policy, Fosun Group EHS Management System Manual, Policy on the Handling of Major Safety, Quality,
Environmental, and Operational Incidents and the Accountability of Unit Leaders, which form the foundation of its EHS
system. It has also set out key objectives of having “zero occupational illnesses” and “zero workplace fatalities”. By theend of 2019, 18 of Fosun's member companies had obtained Occupational Health and Safety Management Systems
certification (OHSAS18001/ISO450001).
In addition to arranging annual health check-ups and routine occupational illness tests for employees, Fosun is also
dedicated to managing workplace safety, reducing water consumption from its operations, conserving resources,
minimizing waste by targeting root causes, treating waste water, gases, and solids before disposal and ensuring wastecompliance, reducing pollution, and protecting the environment.

| Creating mutual benefit partnerships through responsible procurement
Fosun values harmonious, mutual benefit partnerships. To this end, it has set itself the goal of building a world-classsourcing and procurement risk management system by 2028. It has established a Cost and Procurement Management
Department to oversee the Group's supply chain, and based on the Fosun Group Procurement White Paper, hasformulated a comprehensive, regulated procurement system by publishing normative documents such as the Basic
Guidelines for Procurement Management, Basic Guidelines for Supplier Management, and Management Measures for
Strategic Procurement.
Fosun has also established an end-to-end supplier management mechanism. It published a Procurement
Management Assessment (also known as the Traffic Light Assessment), which it uses to assess regular suppliers at least
once a year, and high-risk suppliers on a quarterly, monthly, or otherwise agreed basis. In 2017, Fosun launched
Onelinkplus, a shared digital service center that offers support services covering the entire supply chain, including
budget management, tendering and sourcing, supplier lifecycle management, contract signing, and contract fulfillment
tracking. By the end of 2019, Onelinkplus was home to over 300 buyers and over 10,000 qualified suppliers, and had
facilitated over 4,000 online tenders.

① EHS is a corporate management concept borrowed from Western countries that stands for Environment, Health, and Safety② EHSQ is Fosun's twist on the EHS concept and adds an additional requirement, “Quality” .

035

CSR Practices of CEIBS Alumni Companies| Incorporating ESG metrics into investments
Fosun has also introduced the use of environmental, social, and governance indicators in investment decisions andenshrined this approach in the Fosun Investment Manual and Responsible Investment Policy. Now, when making
investment decisions, investment analysts must factor in ESG metrics such as corporate governance, shareholder rights,
changes to rules and regulations, supply chain management, and the workplace environment.
Fosun has made investment in environmentally-friendly industries and clean technologies a major focus. To this end,
it has established the Energy Industrial and Utility Investment Department, formulated clean technology investment
strategies, and forged a comprehensive ecological platform. Over the next decade, Fosun aspires to progress from being
an environmentally-friendly group (curbing pollution) to an environmental group (curbing pollution + using resources
efficiently) and finally an ecological group (curbing pollution + using resources efficiently + energy).

| A responsible employer that attracts global talent
Fosun views its employees as its most valuable asset. In 2019, the Group was ranked China's fourth most-admired
employer by LinkedIn, a top-100 employer by Liepin.com, and employer of the year by zhaopin.com. By the end of 2019,
Fosun had some 71,000 employees.
To make life easier for employees and improve their wellbeing, Fosun has also created a big data platform thatmakes available the Group's products and services to employees and their families at favorable prices. Fosun has also
implemented management mechanisms that cover key issues such as labor rights protection, prejudice and harassment
prevention, child labor and forced labor prevention, and employee training and development. In 2019, 72.8% of
employees at the Group and its six subsidiaries received training, clocking up 1.31 million training hours between them,or 22.6 hours per employee.

| Practicing CSR
While pursuing business success, Fosun also strives to be a good corporate citizen and is committed to improving
China's business ecosystem and natural environment. In November 2012, Fosun Foundation was established, with Fosunand member companies as the main donors. The Foundation's mission is to support worthy causes around the world infields such as health, poverty alleviation, culture, education, art, and youth entrepreneurship.
Fosun Foundation has four strategic priorities: disease relief, sustainable income, universal education, and quality oflife. More specifically, it has a special focus on health, youth entrepreneurship, education, culture and art, and poverty
alleviation. The Foundation organizes charitable activities in all the above key areas. At the end of 2019, the Foundation's
cumulative donations had exceeded ¥400 million, delivering benefits to over 22 million people.
Fosun has leveraged its strengths in the health sector to improve medical services in rural areas. It has launched adecade-long Rural Doctors Program with an initial goal of providing aid to 1.5 million rural doctors. By the end of 2019,
the program had reached 60 national-level poverty-stricken counties in China, successively deployed 87 Fosun members
to provide on-site support in target areas, visited 1,289 town health centers and 6,769 village clinics, and recruited 10,925
rural doctors for the program.
Fosun Pharma is also committed to raising awareness about malaria prevention in Africa and lowering malaria
incidence. By the end of 2019, Fosun Pharma had shipped overseas over 120 million doses of Artesun®, its innovative,
proprietary drug, and enabled the recovery of more than 24 million patients with severe malaria, most of whom were
African children under the age of five.

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2021 CEIBS CSR White Paper

Building a Strong Business to Benefit Society
It is often said that great things start from small beginnings. Fosun makes conscious and targeted efforts tocommunicate and cultivate its culture of “self-improvement, teamwork, performance and contribution to society” at every
level, to every employee, through big and small actions, and with great reach and breadth. Its humanistic approach isvisible in every little detail.

| Building a “happiness ecosystem” through three pillar businesses
A global company rooted in China, Fosun has adopted a global strategy of “combining China's growth momentum with
global resources”. Based on its three pillars for a happy family — health, happiness, and wealth — Fosun has fostered andintegrated high-quality business resources across the globe to create one-stop, lifecycle happiness solutions for families.
Fosun's health business is centered on innovation-driven pharmaceutical manufacturing and health services, which
includes pharmaceutical manufacturing and R&D, medical services, medical devices and diagnosis, pharmaceutical
distribution, and retail, health insurance, and health management services. Fosun has built an integrated R&D system thatconnects China, the US, India, and Israel, and has created an international R&D platform for biopharmaceutical drugs,
novel small molecule drugs, cell-mediated immunity, and high-value generic drugs. The Group is also exploring the useof the Internet and digital technologies to create new innovative and smart business models.
Fosun's happiness business targets mid- to high-income families and aims to capitalize on China's consumption
upgrading through an expanding leisure and travel, culture, fashion, entertainment, and content offering. The happinessbusiness focuses on five key areas: online platforms, offline experiences, high-quality products, premium content, andreplicable models. By being present across almost all business lines, Fosun can take advantage of synergies across industries.
Fosun's wealth business spans insurance, financial services, and investment, with insurance at the core. By creatingsynergies between insurance and other Fosun-owned industries and assets, Fosun is able to offer three types of signature
wealth services: insurance + industry, insurance + finance + assets, and finance + technology. Fosun offers a global
portfolio of insurance products that meet the diverse needs of families, including life insurance and property insurance,
as well as wealth management and consumer credit insurance.

| A deep-rooted ESG culture
Since its inception, Fosun has set itself the core values of “self-improvement, teamwork, performance, andcontribution to society”. These values are both a standard that Fosun employees strive to live up to every day, and also
represent Fosun's commitment to sustainable development as a responsible, global corporate citizen. In August 2014,
Fosun became a member of the UNGC③, further highlighting its global commitment to sustainable development. In 2019,
three more member companies also followed suit.
For Fosun, “self-improvement” means the unity of knowledge and action. Fosun urges the organization and its
employees to review their strengths and weaknesses and objectively evaluate themselves to achieve improvement
through continuous introspection.
“Teamwork” means making concerted efforts and cooperating to achieve mutual benefit outcomes. The Fosun teamis expected to think and act like an entrepreneur starting a new business and strike complementary, harmonious, andwin-win partnerships.
“Performance” means the pursuit of perfection and outstanding quality. Fosun needs to innovate and expand
services in its health, happiness, and wealth businesses to bring happiness to every family.
“Contribution to Society” means business for good and value sharing. The objectives that Fosun has set itself in thisarea include creating a greener planet through energy conservation and environmental protection, generating wealth forthe benefit of society, nurturing brands to serve society, and benefiting society through giving-back activities.
The above values run deep both in Fosun's corporate structures and the hearts and minds of its employees. By embedding
these values in its organization, Fosun has ensured that ESG concerns are always front and center across its operations.

③ UNGC is short for United Nations Global Compact, the world's largest voluntary corporate sustainability initiative.

037

CSR Practices of CEIBS Alumni Companies

Building Strong Institutional Safeguards
There is an old Chinese saying that goes, “A thousand-foot high tower starts from the ground level”. To strengthen
ESG governance, Fosun has put in place a standardized ESG governance structure and management system. By
instituting a comprehensive risk management system, optimizing its governance structure, and strengthening governancecapabilities, Fosun is blazing a new trail for private companies that want to help the world through doing business.

| ESG governance structure
Fosun has established an ESG Committee under the direct leadership of the Board of Directors, which is its highest
ESG governance body. Beneath the EST Committee is the ESG working group, whose diverse membership represents
most of Fosun's functional departments, including EHSQ & Operational Excellence, Risk Management, Cost &Procurement Management, Capital Markets and Investor Relations, Fosun Foundation, and Anti-Corruption andSupervision. Below is an organizational chart of the ESG working group:

The Board of Directors

and Investo
ESG Committee

ESG
WorkingGroup

Cost &
Procurement
Management
Department
Customer
Service and Quality
Supervision andManagement
Department

Anti-Corruption
andSupervision
Department

User Operation
Department

EHSQ &
Operational
Excellence
Department

Office of
Board
Secretary

Human
Resource
Management
CentreTech+Platform
Business
Group

Legal
Department

Audit
Department

Intellectual
Praperty
Management
Department

Risk
Management
Department

Marketing
Department

Capital Markets
and Investor
RelationsPublic Affairs
and Corporate
Communications
CentreInvestment
Management
Department

Fosun
Foundation

Cyber Security
and User Privacy
Supervision andManagement
Department

Labor Union

Created in March 2019, the ESG Committee is comprised of five Board members, with one independent
non-executive director serving as the chairman. The Committee's job is to help the Board to direct and monitor theGroup's ESG efforts. Its main duties include supervising the development and implementation of the Group's ESG vision,
strategies, and policies, and monitoring the budget and expenditures, as well as external communications policies.
The ESG working group reports to the ESG Committee. Its main responsibilities include participating in the draftingof Fosun's ESG strategic vision, objectives, and strategies; offering recommendations to the ESG Committee on ESG
initiatives; periodically reviewing emergent ESG trends and topics and making recommendations to the ESG Committee;
periodically reviewing Fosun's ESG policies and practices to ensure they are relevant and compliant; monitoring
applicable laws, rules, regulations, and international standards to ensure Fosun's policies are up-to-date and compliant;reviewing ESG documents submitted by subsidiaries, affiliates, and portfolio companies; and assisting in setting goals
and evaluating performance for ESG initiatives.

| Capacity building for operational excellence
Fosun closely follows the latest developments in ESG both in China and internationally. By organizing ESG training
for relevant team members, actively participating in seminars, and keeping abreast of the latest trends and innovations in
the market, Fosun is constantly improving its ESG capabilities.
In order to create a top-down, lasting mechanism for ESG improvement, Fosun now includes the Group's ESG
performance in the Board's performance review, creating a strong incentive for senior executives to improve their ESG
management. In addition, by actively communicating with stakeholders, Fosun has ensured that their expectations and038

2021 CEIBS CSR White Paper

requirements are weighed and reflected when formulating ESG strategies. In 2019, following extensive and in-depth
discussions through multiple channels, Fosun identified a total of 24 ESG initiatives; stakeholders were also closely
engaged in Fosun's ESG operations.
Fosun views trade associations as important external partners for improving ESG governance. Over the years, it has
successively joined the UNGC, China Enterprise Anti-fraud Alliance, China Institute of Internal Audit, China
Pharmaceutical Industry Association, China Medical Pharmaceutical Enterprises Association, China Medical
Pharmaceutical Material Association, and China Society for Drug Regulation.

| A four-tiered risk management system
Fosun's comprehensive risk management approach serves as an important firewall that safeguards its ESG
governance. Over the years, the Group has overhauled its risk management systems and frameworks, focusing onorganizational structure, management systems, and workflow.
Under the leadership of the Board of Directors, Fosun has linked up several departments to collectively delivercomprehensive risk management. This includes Legal, EHSQ & Operational Excellence, Anti-Corruption and Supervision,
Risk Management, and Audit.
The risk management system at Fosun features four lines of defense: business units, functional departments such as
Finance and Legal, Internal Audit, and Anti-Corruption and Supervision. For the first line of defense, Fosun issued the Fosun
Group Risk Reporting Policy to strengthen risk control at key subsidiary enterprises and promote early warning, reporting,and response mechanisms. The second line of defense involves combining ex-ante assessments, in-process
management, and ex-post alignment to empower the Finance and Legal teams. This then helps Finance and Legal to betterinterface with Internal Audit, forming a third line of defense, as well as Anti-Corruption and Supervision, which is the fourth.

| Upholding professional ethics and integrity
The Board is Fosun's top governance body for business ethics. The Anti-Corruption and Supervision Department,
headed by the Chairman, is charged with investigating and handling instances of malpractice, such as corruption, abusesof power, or misconduct.
Fosun has formulated a series of anti-corruption mechanisms and policies, including Incorruptible Working
Regulations for Employees, Policies for Cash and Gifts Received during Business Activities, Policies Regarding theAnti-corruption and Supervision Function, Anti-corruption Assessment and the Traffic Light Measures, and the Global
Whistleblowing Policy. These are designed to govern employee behavior by preventing corruption and fraud, protecting
commercial secrets, requiring disclosure of conflicts of interest, and preventing shady transactions. In addition, employees'
performance evaluations are linked to their personal ethics, and all employees are required to sign an Integrity Agreement
and accept disciplinary action for violations.
Fosun has also issued the Fosun Group Guidance on Anti-money Laundering (Pilot) and carried out compliancetraining with a focus on anti-monopoly and anti-unfair competition practices. The Group sees business ethics andintegrity as inviolable and works to ensure that these principles are upheld by every employee of the Group and its
member companies.

039

CSR Practices of CEIBS Alumni Companies

Conclusion: Contribution to Society
From 2019 to 2020, by collaborating with partners along the value chain, Fosun has taken on a leading role inintegrating ESG factors into its business. Throughout its operations, the Group attaches great importance toenvironmental protection and efficient resource usage. Fosun has also leveraged its strengths in various sectors to giveback to society through health promotion and poverty alleviation initiatives, educational and cultural activities, andbusiness incubation.
Going forward, Fosun remains committed to sustaining robust, efficient growth, staying true to its core values,
exercising corporate social responsibility, and upholding its aspiration of becoming an admirable global corporate citizen
with a strong sense of social responsibility.

EHS System
Management

Comprehensive
Quality
Management

ESG Strategy

Responsible
Procurement

Businesses
StrategyCore values

Responsible
Investment

Responsible
public welfare

Responsible
Employer

Shaping an ESG Strategy through Corporate Values
About the author
Zhang Xiaoping is a Case Researcher at the CEIBS Case Center.

040

CSR at Sanquan
An Invisible Backbone
By Wang Qi and Zhu Qiong

Chen Nan
CEIBS EMBA2005 Alumnus
Chairman of Sanquan Food Co., Ltd.,“At Sanquan, corporate social responsibility started
out as something we did unconsciously, then consciously,
and finally systematically. For us, corporate social
responsibility and company growth are two sides of thesame coin: they form the seamless foundation of along-lasting business.

”

CSR Practices of CEIBS Alumni Companies

Abstract
At Sanquan Food Co., Ltd. ('Sanquan'), practically no one used the word 'CSR', in fact most had probably
no real idea what it stood for. Yet, on closer inspection, CSR permeated the company's operations.
Sanquan had over 10,000 staff originally from rural areas, who accounted for 87.5% of all employees.
Along the industry value-chain, Sanquan's business propelled the emergence and growth of over 5,800
small and medium-sized enterprises, through whom the benefits trickled down to over 400,000 farmers.
Moreover, Sanquan, which had developed a set of quality systems and standards over the years, sharedthat knowledge generously with partners in this trade, hence raising the bar on quality for the entire
industry. After the outbreak of the Covid-19 pandemic in Wuhan in early 2020, Sanquan was the firstcompany in Henan Province to donate food to the city.
“In our opinion, this is how a company achieves sustainable development by seeking shared benefits withstakeholders. Initially, we didn't realize it was actually corporate social responsibility,” said Chen Nan,
Chairman of Sanquan. It was not until November 4, 2020, when Premier Li Keqiang visited Sanquan, that
Chen Nan realized what it was actually doing, when the Premier commented on the significant value
Sanquan was creating for society: “When I visited Sanquan 17 years ago, what I saw was a sea of people
in the workshop busy hand making dumplings and glutinous rice balls. That was how Sanquan createdjobs for the surplus labor in rural China. And 17 years later, Sanquan has mechanized production in place
and therefore fewer people in the workshop. However, it boosted the development of many small andmedium-sized enterprises. This is just phenomenal.” In 2020, due to the Covid-19 pandemic and an
unfavorable international backdrop, the survival of small and medium-sized enterprises was under
unprecedented pressure. Premier Li hoped that enterprises large and small could find ways to coexist andprosper through cooperation.

Market Leader in Frozen Food
Founded in 1992, Sanquan specialized in the production of processed food from agricultural products, fromresearch and development, manufacturing and selling of quick-frozen rice, noodles, shabushabu and barbeque food, all
the way to refrigerated prepared meals, etc. Sanquan was committed to being a leader among food suppliers, delivering
quality meals to the dinner tables of Chinese consumers. Sanquan owned two well-known brands, “Sanquan” and “LongFeng”. Headquartered in Zhengzhou, Henan province, Sanquan had been listed on the A-share market since 2008
(002216) and had maintained a no.1 market share for more than 10 consecutive years.
By the end of 2020, Sanquan had set up factories in Zhengzhou, Guangzhou, Chengdu, Tianjin, Suzhou, Foshan,
Wuhan, etc., and 42 subsidiary distribution companies across the country, with 4,000 plus distributors and over 200,000
partnering retail and F&B outlets. It had also expanded its distribution network by going online, tapping into e-commerce,
community e-commerce, and social network e-commerce. Numbers from June 2020 showed that Sanquan's revenue inthe first half of the year was ¥3.7 billion, a year-on-year increase of 22%; the total half-year profit was ¥560 million, a
year-on-year increase of 475%. The net profit attributable to shareholders of the listed company, non-recurring gains andlosses deducted, was ¥3 billion, a 322% year-on-year increase.
“Be kind and do good” was the core value that the founding team of Sanquan had been upholding since the outset.
After years of living up to this motto, Chen Nan saw how being kind and doing good was essential for creating synergy
inside the company and for fulfilling its mission of social responsibility in society: this basic approach underpinned
Sanquan's successful growth. Sanquan's achievements could be attributed to the positive long-term relationships it had
gradually built up with stakeholders. Sanquan's fundamental strategy was to do good without jeopardizing the safety or
growth of the company. Nevertheless, when the crises struck in the past (earthquakes, epidemics, etc.), Sanquan always
put its financial considerations aside and prioritized bringing assistance to society and those in need.

0422021 CEIBS CSR White Paper

The Business of Doing Good| Buying directly
Almost all materials used by Sanquan were agricultural produce — flour, glutinous rice
flour, meat, poultry, eggs, sesame seeds, peanuts, beans, vegetables, among hundreds moreproducts. Annually, Sanquan consumed around 300,000 tons of agricultural produce, among
which meat, sugar, oil, flour were usually purchased from mega-sized suppliers like China Oil
and Food Import and Export Corporation (COFCO). These categories made up about 70% of
the materials procured, while the remaining 30% were sourced from over 1,500 small andmedium-sized suppliers, among which over 300 had established direct supply partnershipwith Sanquan.
“Always try to source from where the goods are originally grown or produced, andprioritize suppliers from poor areas” was a key message reiterated by Sanquan executives
during regular meetings on sourcing and procurement. Starting from 2014, Sanquan sent out
a field research team every year to rural areas with the goal to find farmers and farming
cooperatives who could sell their products to Sanquan directly. The field team communicatedtheir needs and specifications to the farmers, and if the latter met these requirements,
Sanquan would partner with them. When harvest season came, Sanquan would notify thefarmers of the planned time for pick-up one week in advance.
For crops that required much expertise in growing, Sanquan would integrate resources
locally at the origin of the food and establish plantations. By 2020, Sanquan had built more than
10 plantations which respectively grew high-quality wheat, shiitake mushrooms, peanuts, reedleaves, glutinous rice, etc. These plantations were mostly located within Henan, not far from the
manufacturing plant at Sanquan headquarters. During the Covid-19 pandemic, Sanquan's
rapid recovery of production was partly supported by this robust network of resources.
Buying directly from where the food was harvested brought down costs and ensured
quality. Meanwhile, the sizable and stable orders from Sanquan translated into reliable andcontinuous income for farmers. Sanquan even helped farmers to improve their skills in farming.

| Empower partners small and medium-sized
As a processed food manufacturer, Sanquan was in a value chain that involved more than
20 upstream and downstream industries, covering a total of 5,800 SME partners. “It's a much
more demanding job cultivating an SME partner from square one than empowering an existing
partner,” said Yao Zhaoxu, the procurement director of Sanquan. Therefore, as long as the
supplier made a proactive effort to meet the quality standards of Sanquan, then regardless of
how small that supplier was, Sanquan will try to empowered it to make sure that it did not fallshort of requirements.
Suppliers
To empower small and medium-sized suppliers, Sanquan's efforts were three-fold:supportive procurement, tailored coaching and financial aid.
Supportive procurement
For small and medium-sized suppliers, Sanquan usually placed orders that size covered
the whole year's need. Yet when it came to paying, instead of letting the suppliers wait a fullyear, Sanquan paid them monthly. “A single, combined order reassures the suppliers that they
can count on a stable, sizable demand from us, and the monthly payments provide them with
continuous and healthy cash flow,” said Yao Zhaoxu, “Of course, this arrangement also leads
to stability in our supply, which benefits us too.”
Sanquan did not stop at placing orders and waiting for the harvest: it also did everything
it could to help suppliers to reduce their costs. The biggest expenditure in agricultural
production lay in raw materials, which fluctuated sharply in price depending on the season

043

CSR Practices of CEIBS Alumni Companies

and shifted in supply and demand: reliable price forecasts were therefore very valuable forcontrolling cost. For example, as prices fell inventories needed to be kept to a minimum, while
stocks needed to be kept full when they went up. As such, Sanquan had a model that
forecasted prices trends and the company shared its data with its suppliers for free.
Tailored coaching
To empower suppliers, Sanquan went to great lengths to offer tailored coaching. For
example, when Sanquan noticed that its supplies of shepherd's purse were contaminated bypests and other pollutants, it trained the farmers so that they could keep the crops free fromcontamination during the growing process, and it trained them how to bundle and pack the
harvested crops correctly to meet Sanquan's quality standards, and how to sort the crop fromunwanted chaff using special screening equipment. Sanquan also advised growers to build'leafy vegetable washers' fitted with a running water supply, whilst guaranteeing that theywould cover the cost of the investment.
Many suppliers started out as humble mom-and-pop small holdings, but with coachingand support from Sanquan, had grown into medium-sized enterprises that generate their own
positive aura in their neighborhoods. One example of successful growth was a sesame
supplier that had worked with Sanquan now for thirty years. During the three decades of theirpartnership, the small holding supplied Sanquan with hand-ground sesame seeds. Sanquantaught it how to optimize its craft, offered advice and support in the design and constructionof a new workshop, refrigerated storage and laboratory, and assembled and trained a team ofskilled staff. Up till 2020, this sesame seed supplier was one of the largest roasted sesame
suppliers in China. Sanquan's black sesame-paste filled glutinous rice balls were a hit withcustomers because of the unparalleled high-quality raw materials used to make them,
supplied by producers trained by Sanquan.
Financial support
Suppliers were often daunted by the immense difficulty and high cost of obtaining financethemselves. Consequently, Sanquan used its own funds to provide two types of financial
services. The first was a system that allowed advanced payments: when a supplier urgently
needed money to buy raw materials and was entitled to a payment from Sanquan due on a futuredate, it could apply for an advanced payment. The second service was aimed at SME suppliers
whose assets did not qualify as collateral for a bank loan. These SMEs could apply for a loan
from Sanquan with interest rates equivalent to those in the market. For example, one of
Sanquan's beef and mutton suppliers needed to stock up on supplies before the winter but
lacked sufficient liquidity. Sanquan granted it a six- million loan knowing not all its inventory would
be supplied to Sanquan. The goods bought with the loan could be stored at designatedrefrigerated storage under Sanquan's storage alliance. This model lowered the financing andpurchasing costs for the supplier, created revenue for the refrigerated storage alliance, andguaranteed Sanquan a stable, reliable supply of meats.
To ensure its financing services were compliant and subject to appropriate scrutiny,
Sanquan established a loan review committee, which then introduced a risk assessment system
to screen applicant's product quality, legal track record, the value of assets owned, among otherrelevant factors. Under this system, suppliers received an A, B, C or D rating. D ratings were noteligible for loans. Others could be granted loans whose amounts reflect their ratings, whichmeant the same amount of collateral could result in loans of different sizes as their ratings vary.
Distributors
Sanquan had over 4,000 distributors, among whom 400 were qualified for bank loans. Sanquan
did not finance them directly, but rather provided support during their bank loan applications.
Sanquan normally introduced the distributors to respective banks, provided needed businessand transactional information based on which bank loans were available.

044

2021 CEIBS CSR White Paper| Promote the formulation of industry and national standards
As early as 2008, Sanquan started to champion the idea of setting industry standards. In July of the same year, theFrozen Rice and Noodles Sub-Committee under the National Technical Committee for Standards of Rice and Noodles wasestablished with its secretariat set at Sanquan. Chen Zemin, a founding committee member and then chairman of Sanquan,
was appointed secretary-general. By December 2020, Sanquan had led, participated or promoted the formulation of 23
national, industry or trade association standards. In addition, Sanquan was actively involved in the introduction of four more
sets of standards, one national and three international.
According to Chen Nan, Sanquan's efforts to establish these standards stemed from its position as a market leader.
Given its status in the industry, it believed it had the ability, responsibility and obligation to upgrade its sector throughstandard-setting. For example, the SB/T 10412-2007 Standards for Frozen Rice and Noodles, in which Sanquan played an
active role, stipulated that unpackaged frozen food had to be prepackaged before being sold, which greatly improved foodsafety. The GB/T 25007-2010 HACCP Application Guidelines for the Production of Frozen Food and GB/T 23786-2009
National Standards of Frozen Dumplings standardized the production management of frozen food, thus also guaranteeing
food safety.
Sanquan also worked jointly with various stakeholders — enterprises, trade and government agencies and launchedinternational standards such as Standards for Frozen Dumplings and Standards for Glutinous Rice Dumplings, paving theroad for China's frozen food to go global.

| Cultivate a culture of trust“Be kind and do good” was evident in the way how Sanquan was managed internally. The culture of trust, pioneered by
the founder Chen Zemin, ran in the company from the top to the bottom. After Chen's retirement, his sons Chen Nan andChen Xi took up the baton. The Chen family had one thing in common: they were very good at hiring top professionals fromthe outside to operate and manage their company. They fully empowered the managers they hired.
Taking the management of sourcing and procurement as an example. After hiring an external expert to head thisfunction, the Chen brothers delegated the management of this billion yuan business entirely to this person. No matter how big
a contract was, this person was in charge of its review and approval. The Chen Brothersnever interfered.
Many business heads at Sanquan said that this high level of trust and autonomy from the top was the best incentive todo the best job they could.
Su Ling, the no-nonsense, outspoken vice president of Sanquan, had been immersed in this culture for over a decade.
She was a food safety and quality management specialist who worked at Swire, Coca-Cola and DuPont prior to joining
Sanquan. She held key positions in quality, procurement, and R&D at Sanquan, and was currently in charge of quality and
R&D. According to Su Ling, her first three years at Sanquan were dedicated to quality management, which at that timeneeded much improvement. Without the trust and support from the top management, her aggressive style of getting things
done would probably had been greeted with resistance. The trust placed in her by the top management spurred her on in
her new environment, and allowed her to develop cross-cutting abilities. Essentially, the huge trust she received was acatalyst to shift her mindset from simple “employee” to responsible “owner”.
Chen Nan had always been committed to creating career opportunities for employees. However, he also admitted that
not all professional talent fitted this 'Sanquan environment'. When people decided to leave, Chen Nan was understanding
and even offered further guidance to help them move on. As this case was being written, one of Sanquan's Human Resource
managers tended his resignation, yet he was still invited by Sanquan to be interviewed by the researchers, and he continued
to attend relevant business meetings. Moreover, when Chen Nan learned that he was going to duplicate the “Sanquanmodel” at another company, Chen specifically talked him over how the model was designed, what were the details to be
especially aware of, and reiterated that if the model was destined to be applied in a different company at a different phase ofdevelopment in a different industry, it would be necessary to remain flexible and be ready to adapt.
The culture of trust started from the top, but now it ran both top-down and bottom-up: employees worked harder andrequired less supervision, and in times of crisis, employees were quick to respond. According to Liu Zhenzhen, manager ofCorporate Management, the reason why Sanquan was able to quickly resume production during Covid was because of thissolid culture of trust.

045

CSR Practices of CEIBS Alumni Companies

Development Through Opening Up
In response to growing demand from consumers for product diversity and personalization, in early 2019, Sanquan madethe transition from an in-house product R&D model to a “platform model”, integrating resources from various external
channels to support product innovation. Through this platform, various industries, sectors and parties could find ways tointegrate their resources, generated business and created value.
To accommodate this transformation, Sanquan re-organized its businesses based on product categories andtransformed each category into a profit center. Other supporting lines of business, for example, manufacturing, procurement,
logistics, distribution, etc., were transformed into service centers. Following the reorganization, when a product team decided
to develop a new product, they could either source the services they needed internally or externally.
The next question was how to efficiently and strategically utilize external resources? The answer for Sanquan lay in a
culture that highlighted product quality. Sanquan reached out to companies who shared its enthusiasm for quality,
empowered them with Sanquan's knowledge and expertise in quality management and helped them grow.

| The excellent quality alliance
On August 28, 2020, the Excellent Quality Alliance, initiated by Sanquan, was unveiled in Zhengzhou. Nearly 200
companies joined the Alliance, among them many were material suppliers and contractors of Sanquan or third-party
enterprises who did business with Sanquan. At the kick-off meeting, Sanquan promised to make public the quality systemand standards it developed over the past 30 years, and provided services including supply chain financing, third-party
technical support, joint procurement of raw materials, etc. to alliance members.
Chen Nan said: “With the further division and specialization of labor, a large company that does everything is not good
economics. A supply chain where each specialized business does what it knows best, complementing the other businesses,
reduces costs for everyone.” He emphasized that: “The foundation of cooperation is maximum efficiency, and the premise of
maximum efficiency is consistency in quality.”
As the kick-off meeting wrapped up, Su Ling, the secretary-general of the Alliance, wasted no time visiting other member
companies. “I want to understand the real needs, pain points as well as advantages of each member, see that they
understand quality, and are ready to explore ways to synergize their strengths with Sanquan's advantages to create win-win
conditions.” After two months of site visits, Su Ling was confident that she had identified the chances for cooperation andinnovation between Sanquan and its alliance members.
Companies other than Sanquan's affiliates or business partners were also welcome to come on board. The applicant
only had to be recommended by two Alliance members, then even if they were a competitor, they were qualified to join. Su
Ling explained that such openness resulted from Sanquan's sincere commitment to raising the bar on quality for the entire
industry and cultivating a healthy competitive environment.
In the spirit of creating a common benefit for all, Sanquan also vouched for a fairly appointed board to manage theAlliance. The chairman of the first board was Chen Nan. After a two-year term, the next chairman would be elected by the
Alliance members. As of December 2020, the number of member companies had increased to 300.
Overcome poverty
Farmers
Stable labor

Small andmedium-sized
suppliersEnterprises
in otherindustries

Regional foodsuppliers

Place sizable order directly,
empowerment
Supply high-quality
materials
Financing support

Supply high-quality products
Sanquan
The Excellent
Quality
Alliance

Empowerment

Improved retail
performances

Small andmedium-sized
distributors

Set standard

Raise the bar on quality for the entire industry, cultivate an eco-system046

2021 CEIBS CSR White Paper

Fighting Covid-19
Sanquan always stressed the business logic behind CSR. Yet in the event of a social or environmental emergency,
Sanquan put profitability aside and unconditionally commits to disaster relief. According to Chen Nan, Sanquan's
unhesitant commitment to the society amid a crisis was backed by its rich resources and broad capabilities, yet thoseresources were the result of Sanquan's unrelenting pursuit of its motto to be kind, do good, and choose the right strategy.
On January 24, 2020, the Eve of the Chinese New Year, Sanquan received a notice from the Ministry of Commerce
and the Department of Commerce of Henan Province, saying that Wuhan, which was under a lockdown to contain the
spread of the coronavirus, lacked food and supplies, and even the medical staff working around the clock were deprivedof hot meals. Sanquan's help was greatly needed. When this message arrived, Sanquan was already in holiday mode.
Chen Nan, who was the person on duty in the office that day, immediately summoned its business managers andemployees who were still in Zhengzhou. They returned to the company, re-opened the gate of the warehouse, prepared2,600 boxes of ready-to-heat rice and frozen food worth over ¥400,000, and transported them to the railway station
overnight. Meantime, Chen contacted their partner in the railway transportation business and asked for a favor: adding
two containers to the express train to Wuhan. Just like that, Sanquan's first batch of food donations departed at 4 pm on
January 25th and arrived in Wuhan the next afternoon, being the earliest supplies from Henan to reach Wuhan.
Food was in short supply, yet Sanquan itself only had limited inventory. Resuming production immediately was the
only option. How to man the stations and where to acquire sufficient raw materials were the two critical challenges.
Most of Sanquan's frontline workers used to be local farmers from Henan. As the villages were locked down as apreventive measure against Covid, workers were unable to leave their home villages and return to the factory. Moreover,more and more places were cutting off transportation. Sanquan's workers, though received the notice to return to theirposts, had no means to get there. To overcome this blockage and ensure the safety of its employees, Sanquan proposedto the government an “end-to-end” plan to pick up its employees and get them back to work. With the help from provincial

Sanquan workers loaded anti-epidemic supplies

047

CSR Practices of CEIBS Alumni Companies

and local governments, workers were first transferred from their homes to a designated gathering point located at eachcounty, where Sanquan's shuttle buses would pick them up.
As of early March, Sanquan had deployed over 200 shuttles which traveled a total distance of over 60,000 kilometersand helped its employees to safely get back to work. Sanquan also purchased PPEs at a high cost to ensure that people
can work safely during the time of the pandemic.
To tackle the challenge in the supply of raw materials, Sanquan submitted a list of its suppliers to the government.
Local government coordinated with their counterparts in areas where their suppliers were based to facilitate theresumption of raw materials production. Thanks to the long-established close partnership between Sanquan and its
suppliers and the help from the government, the supply chain soon resumed operation.
During the pandemic, a special government-issued travel permit was needed for the transportation of goods. As amajor enterprise assuming big responsibility in the fight against the disease, Sanquan applied for and acquired 90
permits, which enabled its suppliers to deliver goods to Sanquan on time. With raw materials in place, Sanquan gradually
resumed production.
With production capacity restored, Sanquan played an important role in countering the virus in Wuhan and China atlarge. As of April 8, 2020, i.e., the date the month's-lockdown in Wuhan was lifted, Sanquan had sent a total of 592,600
frozen food items (weighted 5,475 tons) to Hubei, of which 294,900 (2,701 tons) to Wuhan. The Ministry of Commerce sent
a letter of thanks to Sanquan in recognition of its great contribution, and the National Development and Reform Commission
granted Sanquan the status of Key Enterprise for Pandemic Prevention. Though Sanquan wasn't thinking about financial
returns when it hastened to join the fight against Covid, it was nonetheless rewarded with huge profits. In the first half of2020, its net profit achieved a 300% plus year-on-year growth, a dramatic increase, rarely seen in past years.
All being said, Chen Nan, who had a front-row seat to everything the company had been through, still believed CSR
was not a standalone thing, but rather an invisible backbone that held the company upright, and guaranteed the longevityof its business.

Sanquan workers supported Wuhan in fighting against Covid-19

About the authors
Wang Qi is a Professor of Marketing at CEIBS, Zhu Qiong is a Case Researcher at CEIBS Case Center.

048

We-Serve-Hospital
Supporting Doctors and Nurses
in Their Fight Agajiinst Covid-19
By Wang Taiyuan and Chen Bingliang

Zhu Chuntang
CEIBS EMBA2012 Alumnus
Founder and President of We-Serve-Hospital“

The social value of professionalism is
especially apparent when confronted withsomething like an epidemic.

”CSR Practices of CEIBS Alumni Companies

Abstract
We-Serve-Hospital is a service brand owned by Shanghai ServeChina Logistics Group Co. Ltd., offering
hospital logistics services. Since being established in 2002, We-Serve-Hospital has diversified its offering
beyond just cleaning services to include environmental management, central transport, engineering
management, catering services, order maintenance, lift service, gardening and grounds management,
medical consultation, and parking management. The company employs over 30,000 staff, serves millions ofpatients and medical workers from 180 hospitals in 80 cities, and manages 27 million square meters of floor
space, each and every day. We-Serve-Hospital is one of the top players in hospital non-clinical service
industry in China.
The novel coronavirus broke out at the end of 2019, and spread like wildfire. At this critical juncture, hospitals
became the central battlefield of the war on Covid-19, where medical workers abandoned their personalsafety to form a powerful anti-pandemic force. We-Serve-Hospital, as a top non-clinical service provider,joined forces with doctors and nurses in the field to fight the coronavirus epidemic with professionalism.

Logistical Know-How Supporting Relief Effort| Support for Huoshenshan and Leishenshan hospitals
On the late afternoon of January 24, 2020, the Wuhan Association of Real Property Management (WARPM), an
affiliate of Wuhan Housing Security and Management Bureau, approached We-Serve-Hospital about the possibility ofassistance to Huoshenshan and Leishenshan hospitals: as construction of the two hospitals, which were designated forthe treatment of Covid-19, moved into high gear, plenty of property management personnel would be needed shortly
thereafter. We-Serve-Hospital felt duty-bound to assist in Wuhan's fight against the pandemic. Zhu Chuntang vividly
recalled his troubled state of mind ten months after the crisis began: “Upon receiving the request, I had mixed feelings.
On the one hand, I was excited. We-Serve-Hospital was a select one in this pandemic war-time setting. It indicated that
we were widely acknowledged as a top-notch private company specializing in hospital logistics services. On the other
hand, I was worried. At that time, people were panicked and rumors were flying, but I had to decide who should be sent
to Wuhan. What if my decision met with opposition from their families?”
Arrival of 12 We-Serve-Hospital volunteers in Wuhan
The anti-pandemic task force led by Zhu Chuntang drafted a volunteer recruitment proposal at short notice, and sent
it to a working group comprising leading lights in We-Serve-Hospital. Astonishingly, 146 staff volunteered to head for
Wuhan in just an hour. In the end, We-Serve-Hospital chose 12 key members with stellar performance and extensive
managerial experience. On the first day of the new lunar year, the chosen We-Serve-Hospital staff from across china
waved goodbye to their families and boarded trains heading toward Wuhan.
Provision of full logistical support to Huoshenshan and Leishenshan hospitals
The 12 logistics experts from We-Serve-Hospital were among the first to be stationed in the Huoshenshan Hospital.1
Since February 3, they had used their expertise to quickly customize a logistics support system for the hospital, andorganized training sessions to upskill locally recruited volunteers, most of whom were inexperienced and had little
knowledge of hospital-acquired infections, quarantine, and individual protective measures. After the Huoshenshan
Hospital was taken over by the armed forces, the We-Serve-Hospital team entered the Leishenshan Hospital to continue
to help Wuhan combat Covid-19.
As Wang Xinghuan, President of the Leishenshan Hospital, said in an interview, “Every cleaner or maintenance worker
is a soldier, a hero.”2 During their 71-day stay in Wuhan, the We-Serve-Hospital staff trained over 200 property personnel,
completing the task of supporting Huoshenshan and Leishenshan hospitals without reporting any coronavirus infections.

050

2021 CEIBS CSR White Paper| Continued provision of hospital logistics services
We-Serve-Hospital's efforts extended beyond the Huoshenshan and Leishenshan hospitals. In fact,
We-Serve-Hospital offered a helping hand to all its clients, mostly large medical institutions — among its 180 clients, 32
of which were designated for treating Covid-19 patients.
As an expert in hospital logistics, We-Serve-Hospital took anti-pandemic measures from the onset of the coronavirus
outbreak. First and foremost, it took into account the transmission characteristics of the Covid-19 virus when developing
methods for self-protection, identified noteworthy issues concerning protective equipment usage, cleaning, elevator
operation, medical waste disposal and transport of patients, and leveraged its online university to inform over 20,000
employees how to prevent being infected.
Besides providing physical protection, We-Serve-Hospital also understood the value of psychological counseling. At
that time, it was reported that some medical workers had suddenly walked away from their posts without giving advanced
warning, while some logistics personnel resigned3. Nevertheless, in the first half of 2020, We-Serve-Hospital recorded
substantially lower staff turnover. In particular, there was no personnel change in its management team. Even when thenumber of Covid-19 cases surged to new highs, the We-Serve-Hospital staff stuck with their jobs: they walked into
Covid-19 isolation wards and coronavirus-affected areas to provide doctors and nurses with maximum possible support.
Enforcement of high standards to stamp out the 'hidden' enemy
Since Covid-19 transmission within hospitals was not uncommon, We-Serve-Hospital worked closely with medical
professionals to identify ways to improve services. Consequently, We-Serve-Hospital cleaned and disinfected the floor andwalls more frequently, and changed its disinfectant formula to guarantee disinfection of high-risk spots, such as corners,
slits, doorknobs, switches, and other hard surfaces. We-Serve-Hospital also adjusted its business flow as needed.
In addition, the company reduced the disposal time for medical waste: We-Serve-Hospital deployed its proprietary“We-Serve-Hospital 4.0” system, which uses IoT technology to track the movement of medical waste step by step (via anelectronic code) throughout the process of collection, transport, inbound and outbound warehousing operations.
Real-time monitoring of waste meant that key personnel would immediately be alerted of congestion or delays in thedisposal of medical waste. Efficient disposal of medical waste ensured that the risks of infection from the waste producedin large quantities by fever clinics every day during the pandemic was kept to a minimum.
The company also stepped up safeguard measures in areas that were in direct contact with suspected or confirmed
Covid-19 cases. For example, round-the-clock cleaning shifts were organized for fever clinics, cleaners were kept on callto be there to clean CT scanners immediately after they were used by a suspected Covid-19 patient, and similarly,
machine rooms underwent full disinfection after use, to rule out as far as possible the risk of hospital transmission.
Managerial staff acting as on-the-scene commanders
As the escalation of Covid-19 presented a series of challenges for hospital logistics services, We-Serve-Hospital sent
its managerial staff to the front lines of the fight against the epidemic to communicate between the hospitals and
We-Serve-Hospital employees. For instance, a We-Serve-Hospital project manager would seek assistance from thehospital in the case of a lack of medical supplies to ensure that frontline We-Serve-Hospital staff could be protected in thesame manner as doctors and nurses; senior staff in the head office oversaw the purchase of medical supplies in bulk fromsuppliers, whilst calling on socially responsible enterprises and individuals at home and abroad to donate protective
equipment. Moreover, some staff in management positions worked alongside junior staff who were more likely to be
exposed to sources of infection, and in this process, figured out how to maximize on-the-go productivity.

Logistics staff of We-Serve-Hospital

051

CSR Practices of CEIBS Alumni Companies| Wider anti-pandemic support by sharing logistical experienceAs a leading player in the hospital logistics services arena, We-Serve-Hospital shared its valuable experience withother service providers by passing on property management and logistics best practice which could help break the chainof virus transmission.
Participating in compiling practice guidelines on property management during the pandemic prevention and control period
On January 28, 2020, We-Serve-Hospital took part in compiling the Trial Practice Guidelines on Property
Management During the Covid-19 Pandemic Prevention and Control Period (word count: more than 600,000 words) on
the invitation of the China Property Management Institute (CPMI) under the Ministry of Housing and Urban-Rural
Development of the PRC (MOHURD). The guidelines introduced industry-leading enterprises' practices that wereeffective and applicable to residences, office buildings, industrial parks, colleges and universities, and hospitals. One
month after the release of the guidelines starting from February 1, around 600,000 downloads, as well as visits from 100
regional trade associations and 2,000 corporate members of property management associations, were recorded.4
Among all hospital logistics services, transport carried the highest risk of virus transmission. We-Serve-Hospital, on
the invitation of the Chinese Hospital Association (CHA) Logistics Specialized Committee, led the compiling of the Advice
on Transport Management for Hospitals in the Midst of the Covid-19 Pandemic, which was published on the CHA's
website on February 22, 20205 and well-received by industry insiders. The advice touched upon issues such as thetransport of patients, specimens, medicines, household waste, and medical waste, as well as food delivery during the
pandemic. Furthermore, We-Serve-Hospital developed the Practice Guide on Logistics Services for Hospitals Fighting
Covid-19 on the Front Lines based on its own experience, and distributed the guide to service providers both in the same
industry and in the upstream or downstream sectors, for free.
Passing on experience to foreign counterparts
We-Serve-Hospital also made its anti-pandemic experience available to foreign counterparts. In May 2020, when
Covid-19 cases skyrocketed in Brazil, the Cleaning Association of Brazil found We-Serve-Hospital by courtesy of acleaning service supplier, and consulted We-Serve-Hospital about property management issues or more specifically,cleaning and disinfection. Upon receipt of the request, We-Serve-Hospital prepared answers to the questions raised by
the Brazilian side, together with helpful guidelines on cleaning and disinfection practices, then got them translated andproofread, and finally presented a video demonstration to avoid any confusion.
More than 20,000 We-Serve-Hospital staff devoted themselves to the 2020 Covid-19 relief efforts by supporting 32
hospitals designated for the treatment of Covid-19. Notwithstanding some suspected cases in Wuhan, We-Serve-Hospital
had zero employee confirmed to have Covid-19. Additionally, We-Serve-Hospital recorded zero customer complaints andno managerial staff absence during the epidemic, and was bestowed the title of “Outstanding Private Enterprise in theCovid-19 Response” by the All-China Federation of Industry and Commerce. As of December 2020, We-Serve-Hospitalreceived a considerable number of letters of appreciation, including three from government bodies, two from
Hubei-based hospitals, and over 50 from hospitals in other parts of China. This would not have been possible without
We-Serve-Hospital's commitment to delivering excellent services and continuously improving service quality.

We-Serve-Hospital's logistics service team052

2021 CEIBS CSR White Paper

Focusing on Delivering Superlative Hospital Logistics Services
19 years of service experience in the hospital logistics sector ensured excellent performance of We-Serve-Hospitalin the war on coronavirus, where We-Serve-Hospital staff and medical workers were staunch allies.

| Constantly looking for a more efficient service model
Since its inception, We-Serve-Hospital had constantly strived to provide doctors, nurses, and patients with evenmore efficient logistics services. As of 2020, it completed three rounds of service model iteration: in its start-up phase,
We-Serve-Hospital spent six years studying, borrowing from and adapting advanced service models of domestic
commercial property management businesses and foreign counterparts. The scope of its services encompassed
environmental management, central transport, engineering management, and order maintenance.
Between 2008 and 2013, We-Serve-Hospital created a standardized hospital logistics services system, and became
the first in the industry to compile a practice guide. Then, other hospitals began to benchmark their logistics services
suppliers' performance against the over 2,000 standards listed in the guide.
Since 2013, We-Serve-Hospital, entering the phase of integration with the Internet, or, in the information era,launched the intelligent logistics management systems 3.0 and 4.0 to optimize its service processes, introduced order
scramble and order dispatch models (analogical to Uber approach), and leveraged 3D modeling to locate individual
employees for the optimal allocation of resources.

| Upscaling service experience through innovation
Since 2015, We-Serve-Hospital has established an R&D center, and kicked off its fourth round of service model
iterations. The company plans to embark on a new journey into intelligent logistics by upscaling service experience throughinnovation, process reengineering, man-machine coordination, and big data analysis. In addition to service model
innovation, We-Serve-Hospital has invested in scenario-specific product innovation, and developed Nano-antibacterial
towels and floor wax.

| Creating job opportunities for the “4050”①population
Typically, logistics personnel are not highly skilled. They are paid low wages, and change jobs frequently.
We-Serve-Hospital has become an employer brand attractive to the “4050” population on the strength of its
professionalism and quality: in a bid to upskill the logistics staff, We-Serve-Hospital gave them systematic training. It alsooffered more attractive pay packages which exceeded the industry average. Employees with We-Serve-Hospital work
experience also found that they were subsequently more competitive on the labor market. Furthermore,
We-Serve-Hospital's highly professional and efficient training system has led it to become a major employer of
ex-servicemen from Hongkou District, Shanghai.

① The “4050” population refers to women in their forties and men in their fifties, who are not competitive in the labor market due to inadequate
qualifications or skills in spite of a strong desire to work.

053

CSR Practices of CEIBS Alumni Companies

Being More Dedicated to Resources Integration Post-Pandemic
During the epidemic, “How can people in your profession help combat Covid-19” became a trending topic on Weibo,
with 150 million views. The meme struck a chord with viewers: in the face of a national war on Covid-19, people from any
walk of life can be a force to be reckoned with. Corporate social responsibility is always fulfilled by enterprises that are
public-spirited and excellent in their respective fields of expertise, as exemplified by We-Serve-Hospital.
As widespread problems in the industry have manifested themselves during the epidemic, We-Serve-Hospital haverealized that its logistics services still have much room for improvement. To build up professional competence, and better
serve patients, doctors, and nurses, We-Serve-Hospital is planning to list on ChiNext, and channel more resources into
technological innovation and application. Meanwhile, it is scheduled to build 12 exemplary intelligent hospitals, andcreate an information-driven service model featuring the deployment and utilization of intelligent robots in the subsequent
two years, aimed at curbing hospital-acquired infections and upgrading service quality. Also, We-Serve-Hospital will
move both upstream and downstream, or, stretch across more links in the value chain, and integrate resources to cut
costs, thereby bringing better services to hospitals.

Professionalism• Creation of the logistics services system• Standarization of the operations process• Continuous improvement of service quality

Contributing to the
Covid-19 response by• Supporting Huoshenshan
and Leishenshan ho spitals• Maintaining hospital logistics
services in place• Contributing to the overall
anti-pandemic effort throughexperience-sharing

Talent• A culture that empowers employees to achieve their ambitions• Provision of staff training opportunities• Low rates of staff turnover

Management• Development of the intelligent logistics system• Multi-tiered quality control• Cross-regional operations experience

About the authors
Wang Taiyuan is an Associate Professor of Entrepreneurship at CEIBS, Chen Bingliang is a researcher at the
CEIBS Case Center.
References
1 Sun Yan, “12 'We-Serve-Hospital' Staff from Fengxian District of Shanghai Arrives at Huhan's Huoshenshan Hospital to Provide Professional Logistics Services,
Assisting in Fighting Covid-19 on the Front Lines” , ThePaper, accessed on February 5, https://www.thepaper.cn/newsDetail_forward_5801153
2 Li Ruyi, Huang Zhiyang, “President of the Leishenshan Hospital: Logistical Support Regarding Food, Housing and Transportation is Our Biggest Headache for theTime Being” , Beijing Daily APP, accessed on February 5, https://xw.qq.com/cmsid/20200216A09TU300
3 Liu Jia, “Some Healthcare Professionals Sneak Away in the Fight Against Covid-19 102 Deserters Held Accountable by Healthcare Authorities” , Southern Weekly,
accessed on February 28, 2020, http://www.infzm.com/content/178016
4 Yang Meng, Xie Luoqun, “Using Professional Knowledge to Create Value—Practice Guidelines Issued by the China Property Management Institute Receives a
Positive Response” , Property Management, accessed February 1, 2020, http://www.ecpmi.org.cn/NewsInfo.aspx?NewsID=9809
5 The Chinese Hospital Association (CHA) Logistics Specialized Committee, “Advice on Transport Management for Hospitals in the Midst of the Covid-19 Pandemic” ,accessed on February 22, 2020, http://www.cha.org.cn/plus/view.php?aid=15969#

054

CEIBS CSR ResearchEmployee Wellbeing Attribution and
Job Change Intentions
By Byron Y. Lee, Tae-Yeol Kim, Gong Yaping, Zheng Xiaoming and Liu Xin

Byron Y. Lee

Tae-Yeol Kim

Associate Professor of Management, CEIBS

Professor of Management,
Philips Chair in Management,
Department Chair in Organisational Behavior andHuman Resource Management Department, CEIBS“

To be responsible, companies not only need to design appropriate HR practices but also take actions toshow that such practices are intended to raise the well-being of employees. This can create a virtuous cycle
where employee's respond with performance that helps the company achieve its goals.

”

CEIBS CSR Research

Jobs are at the heart of employment relationships and are considered the building blocks of careers. External jobchanges (i.e., changes in jobs across organisational boundaries) and internal job changes (i.e., changes in jobs within
an organisation) may have different implications for both organisations and employees.

| Well-being HR attribution and task I-deals
Employees sometimes make casual inferences about why certain HR practices exist, which in turn affect theirattitudes toward their organisations and jobs. For example, employees may perceive that HR practices are in place due
to an underlying employee-oriented management philosophy and that their firm's HR practices intend to bring about
well-being for employees. Moreover, employees with high well-being HR attribution are motivated to advance their career
through seeking out interesting jobs within their firm.
While HR practices are general to an employee group, an establishment, or even a whole organisation, actual job
content may vary from one individual to another depending on an agreement with their supervisor. Among the supervisory
practices that can affect employees' job experiences, these idiosyncratic deals regarding tasks and work responsibility(i.e., task I-deals) are essential in managing job change in organisations.
From a social exchange perspective, task I-deals can enhance an employee's feelings of obligation of reciprocity,
affective commitment, and commitment to their supervisor. Employees with high task I-deals are more likely satisfied with
their supervisor and subsequently commit to the organisation because their supervisor allowed them to change their job
contents according to their demands. Thus, with high task I-deals, employees may be less likely to leave theirorganisation. However, when task I-deals are low the well-being HR attribution stemming from the generic organisational
HR practices may become more important in affecting external job change intention.
One reason that employees seek task I-deals is to increase their personal development by developing new skills. Ashigh task I-deals occur due to support from their supervisor, employees may perceive high task I-deals as encouraging
their future development and well-being, further enhancing their desire to find a new job within the organisation which ismore aligned with their newly developed skills. By contrast, when task I-deals are low, supervisors do not agree toidiosyncratic changes to the tasks in the jobs and discourage employees from seeking new tasks and responsibilities.

| Job change intentions in automobile sales and service shop employees
In order to learn more about the effects of well-being HR attribution and task I-deals on job change intentions, wecollected data from employees working for an automobile sales and service shop company located in Northern China. A
total of 944 employees responded to our survey.
In response to our survey, we found that employee well-being HR attribution is negatively and significantly correlatedwith external job change intention and is positively and significantly correlated with internal job change intention. At the sametime, we discovered that HR employee well-being attribution is significantly and negatively related to external job change
intention when task I-deals are high. However, the negative relationship becomes even stronger when task I-deals are low.
We also found that employee well-being HR attribution is significantly and positively related to internal job change
intention in employees with relatively high task I-deals. However, for employees with low task I-deals, it is not significant.

| Conclusions
Organisations should understand that employee attribution of HR practices can significantly influence employee
mind-sets toward internal and external job changes. Furthermore, organisations should not only consider the content of
HR practices but also be cognisant of how HR practices are communicated to employees.
In addition, supervisors can play an important role in enhancing or mitigating the relationship between employee
well-being attribution of HR practices and internal or external job change intention. Supervisors who extend task I-deals
employees can decrease the importance of employee attribution of organisational HR practices in reducing external jobchange intention. Moreover, allowing these negotiated deals on job tasks can strengthen the relationship between
employee well-being HR attribution and employee intention to find another job within the same organisation. As such,managers need to understand the specific needs of each employee and utilise their authority to adjust the nature of their
job to motivate them.
About the paper
This study originally published in the Human Resource Management, please Visit https://www.researchgate.net/
publication/336114899_Employee_well-being_attribution_and_job_change_intentions_The_moderating_effect_of_
task_idiosyncratic_deals

058

Willingness to Pay for
Clean Air: Evidence fromAir Purifier Markets in China
By Koichiro Ito and Zhang Shuang

Zhang Shuang
Professor of Economics, CEIBSCore Faculty of CEIBS Healthcare Sector Research Centre“

Pollution is no doubt a major problem. But how much are people
willing to pay to get rid of it? Evidence-based research shows: A lot,which highlights the importance of striking the right balance between
economic growth and clean air.

”

CEIBS CSR Research

In a recent study conducted in China, we found that, over the last decade, awareness of environmental issues andrising disposable incomes means that consumers are now willing to pay for clean air.
Our research looked at air filter sales, pollution data and other related variables to illustrate how much consumers inparticular regions of China are willing to pay for clean air and on what basis.
A detailed analysis of all available data revealed that, on average, people were willing to pay around ¥36 to remove
one microgram per cubic metre of pollution from the air, over five years. However, the exact amount from person to person
varied considerably depending on several factors, particularly household income.
One of the key features of our study was its ability to capitalise on a side effect of a long-standing policy in China
applied to households north of the Huai River (which runs from east to west, passing through densely-populated Anhui
and Jiangsu provinces and which forms a geographic line which is customarily used to define “Northern” and “Southern”
China). The government gives free heating generated from coal to locations north of this river. This keeps homes in thenorth warm, but creates around 30% more air pollution, compared with areas south of the line.
At the same time, other policies discourage mobility in this region, meaning people in this area have been constantly
exposed to pollution for decades. Conversely, the fact such policy does not exist south of the river, makes the populationin the south a good comparison group for the purposes of our research into the issue. The significance of this is that, inall ways we believe were relevant to the study, both groups, north and south, were the same except one was living in anarea with a policy contributing to pollution.
As part of our study, we looked at sales data from the Chinese air purifier market from 2006 to 2014, covering some 690
types of products, over some 81 cities in north and south China, and compared this with pollution and demographic data
for these areas. The results showed a strong correlation between air filter sales and level of pollution (see graph below).

ug/m 3

140
120
100
80

-10˚ -8˚ -6˚ -4˚ -2˚ 0˚ 2˚ 4˚ 6˚ 8˚ 10˚South of the river
North of the riverMarket Share of HEPA Air Purifiers
90%
80%
70%

Huai River

160

Huai River

Level of Air Pollution (PM10)

60%
50%
40%
30%
-10˚ -8˚ -6˚ -4˚ -2˚ 0˚South of the river2˚ 4˚ 6˚ 8˚ 10˚North of the river

Our findings are significant for policy makers in helping them determine which policies have the most relevant
impact. Official data shows that annual average exposure to fine particulate matter in China is five times higher than in the
United States, and policy makers and economists consider air pollution to be one of the first-order obstacles to economic
development. Against this backdrop, the Chinese government and the World Bank worked together in 2005 to overhaul
the Huai River policy which was widely considered to have become outdated.
As China's economy developed, so did consumers' relationship with the state and what they looked for it to provide.
Those living north of the Huai River have gradually taken more responsibility for heating their homes. Previously, residents
would simply be provided with heat from a central source and had limited control over how much of this resource theyused regardless of how much they needed or what temperature they regarded as comfortable. The World Bank andChinese government came up with a metering system to give consumers the ability to control how much heat they used
and, in turn, an incentive to use less. From studying data related to policy change, we found that the willingness to pay
for these reforms is around ¥12 million per city per year — a figure which covers all known benefits of the reforms for all
households. With the calculated cost of the reforms standing at around ¥86,000 per city per year, the cost benefit analysis
is clear, and suggests our study may be a useful indicator for governments when deciding where to draw the line between
economic growth and environmental protection.

About the paper
This study originally appeared in the Journal of Political Economy, please Visit https://www.journals.uchicago.edu/
doi/full/10.1086/705554

060

Does Doing Good
Lead to Doing Betterin Emerging Markets?
By Zou Peng, Wang Qi, Xie Jinhong and Zhou Chenxi

Wang Qi
Professor of Marketing, CEIBS“Top CSR performers in emerging markets (i.e., companies listed on thesocially responsible investment index) are indeed rewarded by financial
market investors. However, such rewards are not equal for all companies —higher for companies that devote a large investment to R&D and/or expand
to other developing countries, but lower for those that allocate excessive
spending on advertising and/or expand to developed countries.

”

CEIBS CSR Research

A recent study has revealed encouraging evidence that top CSR performers in emerging markets (i.e., being listed
on socially responsible investment (SRI) indices) can indeed result in financial rewards for companies.
The findings were part of a paper, co-authored with colleagues from Harbin Institute of Technology, the University of
Florida and Xiamen University, which investigated how emerging markets reward companies' CSR activities.
Our research differs from similar studies in that we focused on data taken from SRI indices, rather than data from CSR
activities (SRI indices list top CSR performers and serve as a tool to help investors make investment decisions based on
financial and social criteria).
Although socially responsible investment has become a widely accepted investment approach in the developed
world, SRI practices are relatively new to emerging countries. While new SRI indices launched in emerging markets are
specifically designed to guide investors in making social investments, it was previously unclear if and how such indicesaffected investors' investment decisions.
Our research suggests that although emerging markets are in the early stages of developing CSR, investors areaware of SRI indices, and that being listed on an SRI index can indeed create financial benefits for companies.
However, we also found that inclusion on an SRI index does not benefit all firms equally. Specifically, we learned thatthe benefit of inclusion on an SRI index is higher for firms that have expanded into developing markets than for those thathave expanded to developed markets. At the same time, we discovered that positive financial responses arestrengthened by R&D expenditures, but weakened by advertising expenditures.
This latter point is particularly striking as past research based on data of CSR activities (instead of SRI indices) indeveloped countries has suggested that advertising strengthens the impact of CSR, while our research, based on datafrom SRI indices in emerging markets, shows the opposite.
One reason for the weakening effect of advertising expenditures may be that, while advertising can increase
consumer awareness, it can also create consumer scepticism of a firm's CSR motivation, since advertising is deemed tobe driven by a self-interested desire to increase profits, whereas CSR activities are supposed to be driven by social
concerns. As investors in emerging countries are characterized by low levels of trust towards corporations' self-published
CSR reports, this finding sends a warning to CSR companies when they allocate excessive expenditures on advertising.
Our findings also provide several managerial implications for firms and governments in emerging markets:
First, although CSR is a relatively new concept that is challenging to carry out, it can also build a positive brandimage to attract investors in emerging markets and is, thus, a valuable endeavour.
Second, for multinational companies operating in emerging markets, our research also suggests that carrying out
CSR can be an effective alternative for creating awareness and building a reputation amongst otherwise difficult to reachand fragmented audience.
By partnering with NGOs, for example, MNCs can gain a better understanding of the underlying needs of emerging
markets, strengthen relationships with local partners through social contracts (especially where there is a lack of formal
regulation), build relations with local consumers and enhance their legitimacy.
At the same time, our findings provide guidance for firms to conduct CSR effectively. Specifically, given the effects
of expanding into new markets, R&D and advertising, it is important for firms to consider CSR and other strategic
investments simultaneously, rather than independently, when allocating resources.
Ultimately, although financial markets in emerging markets are still in their early stages, our findings illustrate thenotion that launching an SRI index can serve as an effective instrument for encouraging firms to contribute to society andpursue sustainable development.

About the paper
This article refers to a paper entitled, “Does doing good lead to doing better in emerging markets? Stock market
responses to the SRI index announcements in Brazil, China, and South Africa”, originally appeared in the Journal of
the Academy of Marketing Science, please visit https://link.springer.com/article/10.1007/s11747-019-00651-z

062

Research on CSR Reportsof A-share Listed Companies

Research on CSR Reportsof A-share Listed Companies
By Center for Wealth Management of CEIBS

Rui Meng
Professor of Finance and Accounting, Parkland Chair in Finance,
Director of Ph.D. Programme,
Director of CEIBS Centre for Wealth Management,
Co-Director of CEIBS Centre for Family Heritage,
Programme Director of Family Office Diploma Programme, CEIBS“In the post-pandemic era, people has raised
higher expectation on the s ustainable development.
Corporations should actively take more corporatesocial responsibilities and create both business value
and social value through solving social problems.

”Research on CSR Repotrs of A-share Listed Companies

Introduction| Subjects
2019 Annual CSR Reports published by A-share listed companies between January and June, 2020.

| Methods
The “2020 Research on CSR Reports of A-share Listed Companies” was compiled with reference to CSR indicator
design methods from China and the rest of the world, CSR report guidelines from relevant authoritative organizations,through a prism of current Chinese social concerns, using big data, and is aimed at establishing a distinctive CSR
indicator system.

| Data Sources
Most data in the research were derived from digital CSR reports and annual reports of listed companies publishedon http://www.cninfo.com.cn. Other sources include the “CSR Database”, “Violation and Punishment Database”, and“Litigation and Arbitration Database” on the Chinese Research Data Services Platform, the “Company Violation” and“Company Litigation” sections in the WIND database, and relevant news in Baidu and the Genius Financial Database.

| Data Processing
A large number of big data research methods and technologies were applied, such as data collection, data cleaning,data mining and data cross comparison, to derive the various indicators in this report, combining big data technology withmanual correction:
1) Data mining: Distributed crawling was adopted to collect large amounts of raw data from the websites ofcompanies and regulatory authorities, and mainstream search engines.
2) Data cleaning: data were cleansed to correct error values, and eliminate duplicates and outliers to ensure
consistency according to predefined rules.
3) Data matching: The required information was precisely identified from a large number of social responsibility
reports, news reports and announcements.
4) Data mining and visualization: Manual processing and machine learning were combined to extract and minerequired data from mass data (e.g., text information), and visualize relevant findings.

About the Authors| Center for Wealth Management, CEIBSThe Center for Wealth Management of CEIBS (“The Center”) was established following
ratification and approval of CEIBS related plans. Based on strict academic and pedagogicaldiscipline, it is committed to the creation and sharing of modern financial knowledge in order topromote exploration and innovation research in the area of finance and wealth management,
boost the standardization and professionalization of relevant industries, and sustainably
contribute value to the world of finance. Meanwhile, the Center also cultivates high net worth
individuals, families, professional financial consultants and wealth management professionals
with benevolence and sense of responsibility, and empowers people, capital and society witha dynamism for good.

| We thank the following authors for their contributions to this report:
Rui Meng, Professor of Finance and Accounting; Parkland Chair in Finance; Director of CEIBS Centre for WealthManagement; Co-Director of CEIBS Centre for Family Heritage
Yin Wenqiang, Research Fellow at Center for Wealth Management, CEIBS
066

2021 CEIBS CSR White Paper

Abstract
Following the promulgation by the China Securities Regulatory Commission (CSRC) of the revised Code of Corporate
Governance for Listed Companies in China in September 2018, which stresses that listed companies should take into
account environmental protection and social responsibility, and establishes the basic framework for ESG information
disclosure, in November 2019 CSRC printed and issued an Action Plan for Enhancing the Quality of Listed Companies
with a view to promoting the healthy and sustainable development of the Chinese capital market and Chinese listedcompanies. The Action Plan sets out 46 practical requirements and missions concerning the governance and regulationof listed companies, and requires disclosure of relevant information according to simplified rules, by different industries
and with differentiated indicators while ensuring information authenticity, in order to ensure timely supervision of thecapital market and risk control of listed companies.
The concept of corporate social responsibility emerged in the West in the 1920s, and has evolved since then into
what it is today in 2020. As economic globalization progresses, the concept of corporate social responsibility is becoming
growing in importance among developing countries and the international standard for social responsibilities SA8000(Social Accountability 8000) has become a benchmark for global companies. As the second largest economy next only
to the United States, China’s economic achievements have drawn attention from around the world, and Chinesecompanies have also made significant progress both in terms of the quality and level of global social responsibility
performance, which is reflected in their CSR reports. The higher the degree of disclosure, the easier it is for the world tounderstand China businesses, and the greater the positive effect on the global image of Chinese companies.
This paper examined trends in CSR reporting from 7 different perspectives, namely:
1) Social responsibility management: in the year of writing this paper, a total of 992 companies published CSR reports.
While there has been a steady rise in the number of published CSR reports over the past 15 years, only a few companies haveengaged an independent third-party to validate their CSR report due to the lack of mandatory regulatory requirements;
2) Company operations and management: in the light of the BRI and growing globalization, a growing number ofcompanies are engaging in strategic exchange and cooperation at provincial and city levels;
3) Product quality and innovation: both the number of patents being filed and R&D spending have gone up, with the
manufacturing industry seeing the highest concentration of both;
4) Responsibility for employees: in general, A-share listed companies attach more importance to cultivating
employee skills and pay more attention to staff working conditions and welfare;5) Diversity and equal opportunity: the share of director, supervisor or executive positions held by women, has risen
but there is still room for improvement. Furthermore, there are significant disparities in this share industry to industry;6) Performance of environmental obligations: judging from the data of the past five years, in general A-share listedcompanies appear to attach more importance to sustainable development and have invested more resources in energy
conservation and waste discharge and emission reduction;7) Social contributions and charity: all companies have registered a rise in their support to education, participationin charity, volunteering, international aid, job creation and promotion of economic growth. Based on the type ofcompanies, joint ventures tend to invest more in education, while private companies are more inclined to invest in charity
and SOEs prefer volunteering activities.
To examine the economic value of CSR reports, the researchers built an investment portfolio based on report
information and analyzed its profitability. The research found that after buying the companies with the highest CSR scoresand selling those with the lowest scores according to their 2019 CSR reports, the portfolio would generate a future
annualized accumulative excess return of 17.66%. Moreover, among the components of social responsibility, it was foundthat social responsibility management, company operations and management, product quality and innovation, andresponsibility for employees played an instrumental role in boosting the profitability of investment strategies.
In addition, this research includes, for the first time, statistics about the performance and disclosure of social
responsibility by CEIBS alumni companies among all A-share listed companies, which showed that CEIBS alumni
companies scored slightly higher than the average of A-share listed companies on all 7 indicators.
This research has probed into CSR reports at length to help regulatory authorities better understand CSR disclosure incapital markets, and enable investors, intermediaries and securities analysts to improve their investment decisions. This
research aims to boost the efficiency of the economy by optimizing resources allocation in the capital market, andfacilitate decisions on pollution control and economic transformation.
067

Research on CSR Repotrs of A-share Listed Companies

Overview of CSR Report Disclosure of A-share Listed Companies
I. Number of Disclosed Reports: steady growth in numbers, but disclosure rate still low: theaverage disclosure rate for the last five years was 25.87%.
CSR disclosure has significant strategic importance for companies. Against the current global background of
multifarious complexities, it is of critical importance for a business to keep its competitive advantage, and theperspectives for sustainable development have become a major concern both for managers and for investors. There
have been empirical studies in academia which indicate that CSR performance, which is a non-financial criterion for
external investors to evaluate companies, is an important way for companies to realize sustainable development andlower the difficulties that they may face in securing capital from the public.1
In light of this, the business management is attaching increasing significance to the disclosure of their CSRs. Since
the consecutive rolling out of CSR related guidelines by authorities such as CSRC, Shanghai Stock Exchange andShenzhen Stock Exchange, the number of companies making CSR disclosures has been increasing year on year. The
growth is particularly significant from 2008 to 2009, when Shanghai Stock Exchange has stipulated mandatory disclosure
policy for three types of companies.2 The number of companies publishing CSR reports continued to grow from2009-2019, with a total of 992 A-share listed companies disclosing their CSR report in 2019, 50 or 5.3% more than theprevious year.
Number of A-share Listed Companies Making CSR Disclosures in 2006-2019
1000
900
800
700
600
500
400
300
200
100
0

942

459

530

582

743

792

992

856

642

671

704

33

39

49

64

86

2014

2015

2016

2017

2018

369
327
19

42
23

2006

2007

2008

90

71

52

60

29

2009

2010

2011

2012

2013

Number of CSR Reports

50
2019

Number of New Reports

II. Number of Disclosures: in 2019 nearly half the companies surveyed had published close
to 11 CSR reports, while only a minority had done so only once. The general distribution
curve is U-shaped.
In the accounting years between 2006 and 2019, a total of 1598 A-share listed companies had published CSR
reports. 797 of these companies, or 49.8%, had published no less than 11 reports, while 801 businesses had issued 10
reports in this period. The data therefore show that generally, the number of companies published CSR reports is growing,
indicating that A-share listed companies are attaching increasing importance to CSR and are making disclosures moreproactively. Nevertheless, during the same period 27.1% of companies had published less than 4 CSR reports.

Number of Companies

Distribution by Times of CSR Disclosure by A-share Listed Companies from 2006-2019
659

700
500
300

143

118

100
0

1

2

99

3

73

60

60

52

67

54

75

4

5

6

7

8

9

10

110

11

12

23

5

13

14

068

2021 CEIBS CSR White Paper

III. Length of CSR Reports: among all surveyed CSR reports from A-share companies,
around 70% were less than 40 pages, which is significantly higher than in previous years.
Meanwhile, the length varied significantly between the longest and the shortest reports.
Among the CSR reports disclosed by 992
A-share listed companies in 2019, the shortest
had three pages while the longest had183 pages,
with a difference of 180 pages in between. The
average length was 35 pages and the medianwas 25. 41.63% were between 0-20 pages while
25.3% ranged between 21-40 pages, together
accounting for 66.93%, or around 70%. Based on
intensive reading of the CSR reports, we
discovered that those with less than 20 pages
were mostly expressed straightforwardly in words
and were limited in terms of the items covered.
On the other hand, those ranging between
21-100 pages had more visuals, and were moredetailed, better designed and formatted, more
attractive
andexplained
corresponding
implementation measures, which all reflected theimportance that these companies attached tosocial responsibility.

Distribution of CSR Reports by A-share Listed Companies
in 2019 by Numbers of Pages
5.54%

2.82%

10.58%

41.63%
14.11%

25.30%
0-20Pages

21-40Pages

81-100Pages

101Pages and above

41-60Pages

61-80Pages

Based on statistical data from the past 5 years, save for the number of reports ranging between 0-20 pages, which
are on the decline, the number of reports between 21-40, between 41-60, between 61-80, between 81-100 and above 101
pages are all on the rise. Though the maximum length is falling, from the 202 pages in 2015 to 183 pages in 2019, theaverage and median numbers of pages are both on the rise. These all reflect the rising importance that A-share listedcompanies attach to CSR reports.
Distribution of CSR Reports by A-share Listed Companies in 2015-2019 by Numbers of Pages
500
450
400
350
300
250
200
150
100
50
0
0-20Pages 21-40Pages 41-60Pages 61-80Pages 81-100Pages

069

101 Pages
and above

Maximum

Minimum

Average

Median

2015

435

164

73

42

24

7

202

3

25.9

17

2016

428

184

89

53

27

12

188

3

28

18

2017

446

203

100

57

36

15

194

3

29.2

19

2018

430

243

109

97

39

22

170

3

32.4

23

2019

413

251

140

105

55

28

183

3

35.3

25

Research on CSR Repotrs of A-share Listed Companies

Analysis of Companies Disclosing 2019 CSR Reports
I. Distribution of Reporting Companies by Industry: in general the manufacturing industry
has seen the largest number of disclosures while the financial industry has seen the highest
proportion of disclosure. 53.8% of industries have registered a net increase in the number of
CSR reports disclosed.
In 2019, the manufacturing industry registered the largest number of CSR disclosures by A-share listed companies,
totaling 515, 422 more than the financial industry that was second in terms of number of reports. Other industries
recorded an average of 34 reports. Though highest in number, the overall rate of disclosure in the manufacturing industry
was low, with a mere 25%. The financial industry, which only has 93 reports, boasts a top disclosure rate of 78%, largely
due to mandatory disclosure requirements by regulatory agencies.
Number and Rate of CSR Disclosure by A-share Listed Companies in 2018 and 2019 (by Industry)
21%
20%

30
31

OthersWater Conservancy, Environment
and Public Utilities Management

11
11

Agriculture, Forestry,
Animal Husbandry and Fishery11
8

Culture, Sports and Entertainment

23
25

Construction

27
26

Mining

33
28

44%
25%

Production and Supply ofElectricity, Heating, Gas and Water

48
46

44%
40%

Transportation,
Warehousing and Post

49
48

Wholesale and Retail44
46

Information Technology

50
58

Real Estate

52
51

22%
11%
28%
11%
40%
17%
28%
33%

48%
39%
27%
27%
19%
23%
41%
42%
85%
78%

80
93

Finance

22%
25%

484
515

Manufacturing
0

100

200

300

400
2018

500

600

0%

20%

40%

60%

80%

100%

2019

II. Distribution of Companies by Region: there are slight regional differences in terms of rateof disclosure among all A-share listed companies, with Central China taking the lead and thenorth east rising significantly but still lagging behind.
Eastern China recorded the largest number of CSR
reports by A-share listed companies in 2019, 69.25% of all
CSR reports that year and far above the numbers registeredin Central, West and Northeast China. All regions saw
different rates of growth compared with the numbers ofreports in the previous year (662 in east China, 36 in
north-east China, 127 in central China, and 117 in west
China). The rate of disclosure varied between regions, withthe highest rate of 25.46% in central China and a slightly
lower 23.37% in north-east China.

Disclosure of CSR Reports by A-share Listed Companies by Region
800

687

27%
25.46%

600
400

23.45%

200
0

43
East

24.80%

23.37%

Northeast

26%
24%

137

123

Central

West

23%
21%

070

2021 CEIBS CSR White Paper

III. Distribution of Companies by Province: Beijing, Guangdong and Shanghai recorded thehighest concentration of disclosing companies while others as a whole saw a slight increase.
By province, the number of reports rose in around 80.95% of provinces in 2019. Beijing, Guangdong and Shanghai
topped the list, with 130 reports recorded in Beijing and Guangdong and 107 in Shanghai.
Among all A-share listed companies, Fujian and Yunnan Provinces saw the highest disclosure rate of around 50%,
whilst Jiangsu and Hunan Provinces (19.01% and 17.14% respectively) showed the lowest proportions.

Number and Rate of Disclosure of CSR Reports by A-share Listed Companies in 2019 (by Province)

Beijing

130

Guangdong

130

Shanghai

107

Zhejiang

99

Jiangsu

66

Fujian66

Shandong

45

Henan

36

Anhui

32

Hubei

26

Sichuan26

Tianjin21

Liaoning

21

Hunan

17

Yunnan17

Jiangxi

16

Xinjiang

16

Shaanxi

15

Hebei

14

Chongqing

14

Jilin

10

Shanxi10

Hainan9

Guizhou

9

Guangxi

8

Heilongjiang

6

Inner Mongolia

6

Gansu

6

Qinghai5

Ningxia

5

Tibet

2
0

20

40

Fujian50.00%

Yunnan50.00%

Henan

45.00%

Beijing

43.19%

Shanghai

41.58%

Tianjin

38.89%Hainan38.71%

Jiangxi

60

80

100

120

140

32.56%

Shaanxi

30.19%

Liaoning

30.14%

Hebei

29.82%

Anhui

27.62%

Xinjiang

27.27%

Chongqing

26.92%

Shandong

24.40%

Hubei

23.08%

Guangdong

22.39%

Zhejiang

21.49%

Sichuan

20.16%

Jiangsu

19.01%

Hunan

17.14%
0%

10%

20%

30%

40%

50%

60%

IV. Distribution of Companies by Type of Business: SOEs accounted for the majority ofreporting companies, while the share of private and joint ventures making reports rose slightly.
Of all 992 CSR reports published in 2019, 531 or 53.52% were from SOEs, while 396 reports, or 39.91%, were fromprivate businesses. 61 reports, or 6.14%, were filed by joint ventures. Statistics from 2015-2019, showed that the share of
SOE reports continued to decline while that of private companies and joint ventures has increased dramatically, with
SOEs still being the majority among all reporting companies.

071

Research on CSR Repotrs of A-share Listed Companies

Distribution of CSR Report Disclosures by A-share Listed Companies in 2015-2019 (by Type of Business)
70%
60%

61.24% 60.10%

57.71%

55.20%

53.52%

50%
40%

34.19% 34.72%

37.38% 38.64%

39.91%

30%
20%
10%

5.73% 6.14%
4.04% 4.29% 4.44%

0%
2015

2016

2017

2018

2019

2015

2016

SOEs

2017

2018

2019

2015

2016

Private Companies

2017

2018

2019

Joint Ventures

V. Distribution of Companies by Board: SSE listed companies accounted for nearly 60% ofsurveyed companies, and the disclosure rate on ChiNext is still far below its potential.
Among the 992 CSR reports released by A-share listed companies in 2019, 736 were from Main Board listedcompanies. Statistics from the past five years showed that the share of reports by Main Board A-share listed companies
has been increasing year on year. In 2019, a total of 172 CSR reports were disclosed by SME Board listed companies, 11
more than the previous year, and continuing the annual increase seen between 2015-2019. A total of 76 CSR reports werereleased on ChiNext in 2019, 11 more than the previous year, yet both the total number and rise in number were slightly
lower than seen on the SME and Main Board over the past 5 years. The composition of the A-share stock market in 2020changed after the inclusion of the STAR board (opened formally on July 22nd, 2019) which contributed a total of 8 CSR
reports, and has significant potential to add to the number of CSR reports in the future.
Based on observations and analyses of the distribution of reporting companies by board throughout 2015-2019, we
found that in general the share of reports by Main Board A-share listed companies decreased slightly year on year. Given
the increase in the number of disclosures, it can be determined that the rise in the total number of reports across allboards was an important dilution factor, explaining this decrease. In the period 2015-2019, the rate of disclosure by SME
Board companies fluctuated around 17% while those by ChiNext companies increased dramatically from 5.87% in 2015
to 7.66 in 2019. Given that the STAR board was only launched in 2019, it is unsurprising that it only contributed a total of
8 or 0.81% of CSR reports, however, it has significant potential to add to the number of CSR reports in the future.
Distribution of CSR Reports by A-share Listed Companies in 2015-2019 (by Board)
800
709
700
600

736

651
567

600

500
400
300
200

122

137

140

161

172

100

43

44

55

65

76
0

0

0

0

0

8

2015 2016 2017 2018 20192015 2016 2017 2018 20192015 2016 2017 2018 20192015 2016 2017 2018 2019

Main Board

SME Board

ChiNext

STAR Board

072

2021 CEIBS CSR White Paper

Analysis of Indicators in 2019 CSR Reports
This paper examined CSR Reports by A-share Listed Companies in 2020. The analysis focused on indicators in 7
categories, namely (1) social responsibility management, (2) company operations and management, (3) product quality
and innovation, (4) responsibility for employees, (5) diversity and equal opportunities, (6) environmental responsibility,and (7) social contribution and charity, with each category comprising 5-9 sub-indicators. To derive these indicators, we
processed relevant data and information by means of big data crawling, cleaning, mining and in-depth cross comparison,and the indicator matrix of the seven categories is illustrated in the table below.

CSR Indicator System
A. Social Responsibility
Management
B. Company Operations
and Management

C. Product Quality andInnovation

D. Responsibility for
Employees

E. Diversity and Equal
Opportunities

F. Environmental
Responsibility

G. Social Contribution
and Charity(1) report assurance(2) reference to global benchmarks(3) report inclusiveness(4) website column(5) education and training(6) leading team(1) strategic cooperation and sharing(2) anti-bribery and anti-corruption(3) business integrity(4) accounting irregularities(5) financing disputes(1) quality management(2) quality reputation(3) after-sale services(4) customer satisfaction(5) patents(6) R&D expenditure(7) share of R&D personnel(8) share of technical personnel(1) remuneration incentives(2) supplementary benefits(3) on-the-job training(4) communication with employees(5) staff care(6) safety management system(7) training on production safety(8) occupational health and safety certification(9) disputes over staff health and safety(4) vulnerable groups(1) female executives(5) equal opportunities(2) female directors(3) all-male directors, supervisors and executives(1) environmental benefit(2) energy conservation(3) reduction in three types of waste(4) circular economy(5) green office(6) environmental protection and public welfare(7) environmental certification(8) environmental commendation(9) environmental penalty(1) donations(2) social contribution value per share(3) contribution to education(4) charitable activities(5) volunteering(6) international aid(7) job creation(8) contribution to economic growth(9) layoff

H. Disclosure of CSR Reports by CEIBS Alumni Companies

073

Research on CSR Repotrs of A-share Listed Companies

I. Social Responsibility Management
This part includes (1) report assurance, (2) reference to global benchmarks, (3) report inclusiveness; (4) website
column; (5) education and training, (6) leading team. These six indicators are used to evaluate the companies’ CSR
management in terms of awareness and performance.
Report Assurance and Global Standards(1) Report assurance: among the 992 CSR reports
disclosed in 2019, only 14 were assured by third-party
agencies, accounting for 1.41%, or 2.84% lower than theprevious year. The absence of mandatory requirements for
CSR disclosure on the part of regulatory agencies may animportant reason behind the decline.

CSR Report Assurances by A-share listed companies from 2016-2019
50
40
40
31
29
30
20

14

10

In terms of distribution by industry, with monetary0financial services, insurance and capital market services all
2016
2017
2018
2019
included in the financial industry, the rate of disclosure inthis industry stood at 85.71%, 40 percentage points higher than the 45% share over the previous year, while the rate ofdisclosure in retail, and the mining and washing of coal was 7.14%.
In terms of regional distribution, companies that used third-party assurance were mostly concentrated in eastern
provinces, with Beijing accounting for the largest share of 35.71%, and Shanghai and Guangdong ranking parallel, eachwith a share of 21.43%.
Distribution of CSR Report Assurance among A-sharelisted companies in 2019 (by Industry)

Distribution of CSR Report Assurance among A-share
Listed Companies in 2019 (by Region)

7.14%
7.14%

21.43%

Monetary Financial Services
Retail7.14%

GuangdongHenan

35.71%

Coal Mining and Washing
7.14%

7.14%

Insurance

ShangdongShanghaiCapital Market Services

7.14%

71.43%

7.14%

FujianBeijing

21.43%In terms of type of business, the majority of companies that choose third-party assurance were SOEs, totaling 9,
accounting for of 64.28% of the total; the rest 5 were private companies representing a share of 35.71%.

By CSR report assurancecompanies

By type oforganization

In terms of service provider for third-party assurance, most A-share listed companies engaged one of the “Big Four”
accounting firms as independent report assurance companies.
CSR Report Assurance among A-share Listed Companies in 2019
9

SOEs
5

Private Companies
2

PwC Zhong Tian
Deloitte Touche Tohmatsu CPA Ltd

1

SCPA

1

Ernst & Young Hua Ming

5

KPMG Huazhen LLP

3

CECEPEC

1
1

TUV Nord China
0

2

4

6

8

10

074

2021 CEIBS CSR White Paper(2) Reference to global standards: in May 2013, the Global Reporting Initiative, or GRI, held a sustainable
development conference and presented a new version of the Guide to Sustainable Reporting G4, which included new
specific requirements apart from the existing core standards including stakeholders, integrity, substantiality, sustainable
development background, balance, accuracy, timeliness, clarity and reliability. Acceptance of the Guide is voluntary andhas been endorsed by UNDP and ACCA, and has now become a global reference for CSR disclosures.
Among the 992 reporting A-share listed companies in
2019, 278 or 28.02%, drafted their disclosure according to
the Guidance. In terms of the number of CSR reports
released by A-share listed companies in compliance with
GRI over the past 5 years, the number of GRI-observing
companies increased by an average annual 15.04%, withthe largest single increase of 4.88% between 2018 and2019, which saw 60 companies joining GRI ranks.

Number of Enterprises Making Disclosures According to
GRI Standards from 2015-2019
278

300
194

179

160

200

218

100

In terms of compliance with GRI standards in major
0
provinces/municipal cities (not including Xinjiang, Tibet,
2015
2016
2017
2018
2019
Guangxi Autonomous Region), Beijing, Guangdong andShanghai were the provinces with the largest number of
GRI-standard compliant companies, while overall the total number of compliant companies fell. Other provinces andmunicipal cities, namely Zhejiang, Yunnan, Jiangsu, Shandong, Hebei, Liaoning, Fujian, Henan, Anhui, Hubei, Hainan,
Chonqging and Jiangxi saw a rise in compliance.
Distribution of Companies Making Disclosures According to GRI Standards in Major Provinces/Municipalities
40
30
20
10

i
gx

nx

i
an
Ji

an

aa
Sh

ng

un
H

qi

jin

ng

C

ho

n
na

an
Ti

ai

ei

H

i

ub
H

hu
An

en

an

n
H

Fu

jia

ng
ni

Li

ao

eb

ei

n
H

ua
ch

ng

2015

Si

u

do

gs

an

an

an
Ji

nn

ia

ng

Yu

ai
gh

ej
Zh

an

do

Sh

Sh

G

ua

ng

Be

ijin

g

ng

0

2016

2017

2018

2019

By industry, manufacturing had the largest number of companies publishing GRI compliant CSR disclosures, at 95
or 34.17% of the total: 35, or 12.59%, in the mining industry, 33 or 11.87% in the financial industry, while other sectors
each accounted for an average of 4.14%.
Distribution of Enterprises Disclosing CSR According to GRI Standards (by Industry)
Manufacturing

95
33

Finance
Real Estate

15
10

IT Technology

14

Wholesale and RetailTransportation, Warehousing and Post

17

Production and Supply of Electricity, Heating, Gas and Water

19
35

MiningConstruction

10

Culture, Sports and Entertainment

3

Agriculture, Forestry Animal Husbandry and Fishery

3
10

Water Conservancy, Environment and Public Utilities Management
Others

14
0

075

20

40

60

80

100

Research on CSR Repotrs of A-share Listed Companies(3) Report inclusiveness: the inclusiveness of CSR reports is measured by how many of the 10 sub-dimensions it
includes, namely shareholder rights protection, creditor rights protection, employee rights protection, supplier rights
protection, clients and consumer rights protection, environment and sustainable development, public relations and social
utilities, measures for building and improving the corporate CSR system, measures for production safety, andinsufficiencies of the company. Each item included adds one point, with a maximum of 10 points.
The distribution of scores on inclusiveness according to the survey was as follows: only 2.16% or 6 reports covered
all ten sub-dimensions; the number and percentage of companies scoring 7, 8 and 9 were 53 (19.06%), 133 (47.84%)
and 72 (25.9%), respectively. 14 (5.04%) companies scored 6 or less.
(4) Website column: in 2019 of all the A-share listed companies that published a CSR report, 413 (41.63%) set up asocial responsibility column on their websites for visitors to view the business’s social responsibility performance, 55 lessthan the previous year, or a decline of 8.05% from previous year’s 49.68%.
Distribution of Scores on the Inclusiveness of 2019 CSR Reports
133

140

Number and Percentage of Companies with CSR
Website Column from 2016-2019
468

500

120

400

100
80

300

72

45.79%

50%
49.68%

41.47%

40%
41.63%
30%

53

60

330

60%
413

392

200

20%

40
100

20
0

0

0

0

2

3

1

2

3

4

5

9

10%

6
0

6

7

8

9

10

0%
2016

2017

2018

2019

(5) Education and training: in 2019 a total of 711 companies carried out in-house education and training on CSR. Data
for 2016 to 2019 in the figures, show that the quantity and the share of such companies have both increased from 2016
to 2019. It is worth noting that the number of companies carrying out such training increased most significantly between
2018 and 2019, from 273 to 711 (60.43%) far above the average annual growth rate in the previous three years between
2016-2018. This increase indicates that A-share listed companies attached more emphasis to CSR education.
(6) Leading teams: in 2019 a total of 292 companies established dedicated departments or units in charge of CSR
management, accounting for 29.44% of all companies making CSR disclosures that year, and 6% up from the previous
year. Data for the years 2016-2019 showed that the number of companies with dedicated in-house CSR departments
rose, offering further evidence of the growing importance of CSR among A-share listed companies.

Number and Percentage of Companies with CSR
Leading Teams from 2016-2019

Number and Percentage of Companies That Have Carried out
Education and Training on CSR from 2016-2019
711

800

100%

80%

600

292

300
250

223
30%

200
77.72%
400
241

40%

183
200
23.11%
02016

28.15%

28.98%

2017

2018

60%
150

273

20%

2019

0%

40%

100

29.44%
139
17.55%

152
23.67%

20%

17.76%
10%

50
0

2016

2017

2018

2019

0%

076

2021 CEIBS CSR White Paper

Summary and Analysis of Social Responsibility Management
Academically, it is regarded that CSR can be defined both in a broader and a narrower sense. In the broader sense,
an business includes all its stakeholders, and it needs to be accountable not only to its shareholders but also to the social
environment in which it exists, such as by complying with relevant laws and regulations, adhering to fundamental
business ethics, protecting the ecological environment, and participating in philanthropical and social welfare activities.
In general, the broader sense of CSR emphasizes that companies need to pay attention to social welfare instead of
pursuing solely economic interests. According to Freeman, the standard-bearer of this viewpoint, apart from pursuingeconomic profits, corporates should be responsible for all stakeholders. He has also applied the theory of stakeholders
to CSR research to promote the harmonious development of society.3
In the narrower sense, a company is essentially a profit-making social organization and its fundamental purpose is
to maximize its shareholder profits. Friedman, the founder of this theory, believes that there is only one type of company,
for whom the only social responsibility is to comply with professional rules and using its resources to carry out activities
intended to increase profit.4
These two seemingly contradictory views of CSR have both mentioned the utilization of resources, including social
and natural resources. Yet neither the unilateral taking of resources by the companies from the society, nor the constantdevotion of all the gains from the former to the latter, can be the optimal solution between business and society in the longrun. Therefore, the view of sustainable development has been proposed as a win-win solution between these two
extremities. Professor Linnannen thinks that companies can contribute to their sustainable development by paying more
attention to the economy, society and the environment, and his view has gradually become mainstream in the field ofsocial business development.5 From the bulk of strategic cooperation in western developed countries, we can see that
CSR is becoming an important criterion for selecting partners in international cooperation and the disclosure of CSR has
been increasingly included as an appendix clause in cooperation agreements.
All the above 6 indices demonstrate that the current momentum among A-share listed companies in terms of thequantity, quality and manner of CSR disclosure and the degree of internationalization in their disclosure standards, ispositive. Although in 2019 only one quarter (¼) of all A-share listed companies produced CSR reports, we believe thatwith the expansion and deepening of economic and trade globalization, more in-depth strategic cooperation withcompanies in developed countries, and more generalized CSR practices will gradually lead to an increase in thispercentage in China.

077

Research on CSR Repotrs of A-share Listed Companies

II. Company Operations and Management
This part includes five indicators that reveal company positive performance and negative attention received in termsof company operations and management: (1) strategic cooperation and sharing, (2) anti-bribery and anti-corruption, (3)business integrity, (4) commendation for sound governance, (5) accounting irregularities, and (6) financing disputes.
(1) Strategic cooperation and sharing: thanks to the deepening of the B&R Initiative and policy support for relatedindustries, 77.32%, or a total of 767 companies disclosed their strategic cooperation and sharing in their CSR reports.
This marks a significant increase of 39.32% over the previous year. By industry, the highest disclosure rate, 76.92% wasamong manufacturing companies, compared to 40.73% in water conservancy, environment and public utilities
management.
(2) Anti-bribery and anti-corruption: among all reporting companies in 2019, 51.56% of companies disclosed
measures taken against commercial bribery and corruption. Judging by trends found in previous years, A-share listedcompanies attached more importance to anti-bribery and anti-corruption than their peers. By industry, 53.33% of financial
companies have made disclosure on this front, as against a lower rate of 30.24% in agriculture, forestry, animal husbandry
and fisheries.
(3) Business integrity: 70.46% of companies made disclosures on business integrity in 2019, a decrease comparedwith the previous four years and 10% less than the previous year. By industry, companies in manufacturing, construction
and wholesale and retail attach more importance to the promotion and advancement of business integrity.
Percentage of Disclosure among A-share Listed Companies about Strategic Cooperation and Sharing,anti-Bribery and anti-Corruption, and Business Integrity from 2016-2019
84.85%

77.32%

80%

40%

48.71%
29.67%

34.46%

81.21%
70.46%

60%
38.00%

83.41%

53.50%

51.61%

30.81%

20%
0%

2016
2017
2018
2019
Strategic cooperation and sharing

2016
2017
2018
2019
Anti-bribery and anti-corruption

2016

2017
2018
Business integrity

2019

Percentage of Disclosure among A-share Listed Companies about Strategic Cooperation andSharing, anti-Bribery and anti-Corruption, and Business Integrity in 2019 (by Industry)

Manufacturing

76.92%

49.70%

95.77%

Finance73.29%

53.33%

72.68%

Real Estate

66.73%

44.86%

80.65%IT Technology

71.27%

49.80%

83.06%

Wholesale and Retail75.20%

51.01%

87.20%

Transportation, Warehousing and Post

74.29%

49.09%

79.23%

Production and Supply of Lectricity,
Heating, Gas and Water

66.43%

34.27%

85.28%

Mining56.85%

48.08%

79.54%

Construction

66.73%

51.61%

97.48%

Culture, Sports and Entertainment

75.60%

49.40%

85.18%

Agriculture, Forestry,
Animal Husbandry and Fishery54.13%

30.24%

71.57%

Water Conservancy, Environment andPublic Utilities Management

40.73%

50.81%

75.40%

Others20.16%

26.21%

23.99%

0% 20% 40% 60% 80%
0%
20%
40%
60% 0% 20% 40% 60% 80% 100%
Strategic cooperation and sharing Anti-bribery and anti-corruption
Business integrity078

2021 CEIBS CSR White Paper(4) Accounting irregularities: we compiled statistic data on accounting irregularities by reporting companies throughaccessing the violation and punishment records in open databases. From 2015 to 2019, we discovered that the numberof accounting irregularities in general increased slowly. In total, 90 companies infringed accounting rules in 2019, which
was on par with the previous year.
Number and Percentage of Companies with Accounting Irregularities among A-share Listed Companies from 2015-2019
100

90

82
80

11%

90

78

71

10%

10.35%

60
9.56%

40

9.55%

20

9%

9.11%

9.07%

0

8%
2015

2016

2017

2018

2019

(5) Financing disputes: by accessing open databases, announcements by listed companies and industry news, we
discovered that a total of 96 listed companies were involved in financing disputes in 2019. Of these 60 occurred with
SOEs, accounting for 62.5%; 35 in private companies, accounting for 36.49%. According to currently available data, there
was only 1 financing dispute in relation to joint ventures. By industry, in 2019 the financial industry recorded its highest
number of financing disputes, a total of 42; the next were manufacturing and retail, with 14 and 13 cases respectively. By
region, the number of financing disputes in east China, west China, central China and north-east China reached 72, 12,
8 and 4 respectively.

By type of business

Number of Financing Disputes among A-share Listed Companies in 2019

1(1.04%)

Joint Ventures

35(36.46%)

Private Companies

60(62.50%)

SOEs
4

By region

Northeast

8

Central

12

West

72

East
42

Finance
Manufacturing

14

Wholesale and Retail13
6

By industry

Pharmaceuticals
3

Information Transmission, Software and IT Services

6

Culture, Sports and Entertainment
2

Environmental Protectiion and Public Utilities

7

Real Estate
3

Transportation, Warehousing and Post
0

079

10

20

30

40

50

60

70

80

Research on CSR Repotrs of A-share Listed Companies

Conclusion and Analysis on Corporate Operations and Management
Maximizing shareholder profits used to be the central philosophy for companies. Yet as the social environment ofcompanies changed, this traditional view has become increasingly challenged by the relations between business and its
multiple end stakeholders. Nowadays, the notion that “companies should reasonably perform their social responsibilities
while seeking to maximize their economic benefits”, by means such as adhering to business integrity or performing
anti-corruption and anti-bribery, has gained increasing popularity and has largely shaped the new generation of businessvalues.
Academically, from a cost-efficiency perspective, there are close ties between the social responsibilities a business isable to perform and the economic value it generates. In the startup and primary phases of companies, due to themismatch between their financial resources and the cost of performing CSR, they cannot perform CSR in the fullest sense
and the range of their CSR only covers a limited number of parties such as their employees, shareholders and other direct
stakeholders. This is in line with the natural order of things. After an initial accumulation of capital, companies enter a phaseof development and growth and begin to own certain production materials, at which stage they need to focus on theirlong-term sustainable development, taking into account both the sustainability of economic profits and that of society.
Future development strategies of companies must be in line with the social environment in order to ensure the potential andcompetitiveness that they need for long-term growth. “In the short run, a business’s social responsibilities and economic
benefits may be at variance or even in conflict with each other, but in the long run they must be in the same direction andmutually reinforcing. When a business’s economic profits are at odds with its social responsibilities, it must strike a balance
to ensure its future production activities will yield better economic profits in a sustainable social context.”6
In addition, anti-bribery and anti-corruption are also tightly connected with the future performance of companies.
Some researchers have conducted big-data research on A-share listed companies on the Shanghai and Shenzhen Stock
Exchanges and discovered positive correlations between anti-corruption and social responsibility, with a coefficient of
0.0832, meaning that the former can indeed promote the delivery of the latter. Meanwhile, it also indicates that in an
anticorruption macro-environment, companies are more willing to improve their social image by engaging in more socially
responsible behavior. Research has also demonstrated that anti-corruption measures are negatively correlated with fringe
benefits, with a coefficient of -0.1122. “When companies curb on-job consumption activities, they can release moreresources, and the promotion of CSR to business performance may be greater, namely the resource release effect.”7
In conclusion, the operations and management of companies have a significant influence not only on thedevelopment of companies themselves, but also on the greater social environment in which they exist. Companies must
optimize the synergy between their economic profits and social wellbeing to create win-win conditions.

080

2021 CEIBS CSR White Paper

III. Product Quality and Innovation
This part consists of 8 indicators, namely (1) quality management, (2) quality accreditation, (3) after-sale services,(4) customer satisfaction, (5) patents, (6) R&D expenditure, (7) proportion of R&D personnel, and (8) proportion oftechnical personnel.
Product and Service Quality(1) Quality management: in 2019, a total of 461 (46.47%) companies published the measures they were implementing
to improve product and service quality in their CSR report, which was 11.17 percentage points lower than the previous
year. The rate of disclosure for this indicator was highest in the medical and pharmaceutical industries, which bothshowed disclosure rates of 75.64%. Manufacturing came in second with a disclosure rate of 60.65%.
(2) Quality and reputation: among the 2019 CSR reports, 368 (37.1%) companies disclosed their reputations or
certifications for the quality of their products and services, which was lower than the previous year’s rate of 64.44%.
Wholesale and retail ranked the highest with a rate of 49.32%, and the next was manufacturing, with a slightly lower rateof 47.85%.
Disclosure of Quality Management System and Quality Reputation among A-share Listed Companies from 2015-2019
80%
60%

54.64%

53.03%

54.67%

62.75%

57.64%
46.47%

66.36%

64.44%

40.51%

37.10%

40%
20%
0%

2015

2016

2017

2018

2019

2015

2016

Quality management system

2017

2018

2019

Quality reputation

Disclosure of Quality Management and Quality Reputation Among 2019 CSR Reporting Companies (by Industry)

Finance

5.32%

7.45%

Manufacturing60.05%

47.85%

Wholesale and Retail58.90%

49.32%

Pharmaceutical

75.64%

Information Transmission, Software and IT Services

37.25%

Culture, Sports and Entertainment

27.45%

32.10%

Environment and Public Utilities

34.57%

16.00%

14.00%

Real Estate26.53%

24.49%

Transportation, Warehousing and Post

27.45%

25.49%

Power, Heat, Gas and Water Production

48.15%

Others50.00%
0%

20%

40%

60%

Quality management system081

44.87%

37.04%
30.00%
80%

0%

10%

20%

30%

Quality reputation

40%

50%

Research on CSR Repotrs of A-share Listed Companies

After-sale Services and Customer Satisfaction(3) After-sale services: among all reporting companies in 2019, 227 (22.88%) companies disclosed their measures
for improving after-sale services, with a slight reduction by 172 companies compared with the previous year. By industry,
production and supply of electricity, heat, gas and water is the single industry with the highest rate of disclosure, at
18.52%.
(4) Customer satisfaction: among all reporting companies in 2019, 360 (36.29%) companies conducted customer
satisfaction surveys, a slight increase of 0.3% over the previous year. By industry, the proportion of customer satisfaction
surveys was highest in the medical and pharmaceutical industry, at 51.28%. The financial industry came in second, witha proportion of 50%.
Proportion of Disclosure on After-sale Services and Customer Satisfaction Surveys among A-share Listed Companies from 2015-201945%

41.59%

40%

38.89%

41.71%

41.93%
35.26%

35%

35.99%

36.29%

20182019

33.08%

30%

26.52%
22.88%

25%
20%
15%
10%
5%
0%

2015

2016

2017

2019

2018

2015

After-sale services

2016

2017

Customer satisfaction

Disclosure of After-sale Services and Customer Satisfaction among A-share Listed Companies (by Industry)

Finance
Manufacturing50.00%

5.32%
37.08%

1.20%

Wholesale and Retail

6.85%

Pharmaceutical

6.41%

23.29%
51.28%
41.18%

9.80%

Information Transmission, Software and IT Services

18.52%

6.17%

Culture, Sports and Entertainment
Environment and Public Utilities

10.00%

Real Estate

10.20%

Transportation, Warehousing and Post

9.80%

24.00%
40.82%
49.02%
22.22%

18.52%

Power, Heat, Gas and Water Production

10.00%

25.00%

Others
0%

10%

20%

30%

After-sale services

0%

10%

20%

30%

40%

50%

60%

Customer satisfaction

082

2021 CEIBS CSR White Paper

Product R&D and Innovation(5) Patents: a total of 124505 patents have been disclosed in the CSR report of 2019, 3396 higher than the previous
year. In the last five years, the number of patents disclosed by A-share listed companies has been increasing, with thegrowth rate being the highest in 2017-2018, standing at 23.53%. The average annual growth is 12.47%.
Number of Patents Disclosed by A-share Listed Companies
from 2015-2019
15000010000012110978792

124505

6000

4962

5000

98042

82543

R&D Expenditure Disclosed by A-share Listed Companies
from 2015-2019 (unit: ¥100 million)

4000
3000

50000

2335

2817

3360

3291

2017

2018

2000
1000

0

2015

2016

2017

2018

2019

0

2015

2016

2019

(6) R&D expenditure: based on available data, a total of ¥496.2 billion R&D expenditure has been disclosed by
A-share listed companies in 2019. Data in the past five years show that overall R&D expenditure has been on the rise, withgrowth being highest between 2018 and 2019, at 50.78%. Average annual growth rate is 22.16%.
Proportion of R&D personnel: in 2019, based on available data, the average proportion of R&D personnel is 14.9%,
lower than 2018 but higher than the years between 2015-2017.
Proportion of technical personnel: in 2019 the average proportion of technical personnel is 18.54, 1.42 less than theprevious year. On average, the average proportion in the past 5 years is 19.32%.
Average Proportion of R&D Personnel from 2015-2019
20%
15%

20%

18.02%
13.75%

12.24%

14.21%

Average Proportion of Technical Personnel from 2015-2019

14.90%

10%

5%

5%

2015

2016

2017

2018

2019

19.27%

19.67%

19.96%

2015

2016

2017

2018

18.54%

15%

10%

0%

19.17%

0%2019

In terms of the above four indicators, manufacturing ranks above all other industries in the number of patents andR&D expenditure, with an average share of 73.64% and an average proportion of 72.2% respectively. Informationtransmission, software and IT services has the highest average proportion of R&D personnel of 44.38%. These threeindustries also have the highest average proportion of technical personnel, which is 47.61%.
Share of patents

Proportion of
R&D expenditure

Average proportion of
R&D personnel

Average proportion oftechnical personnel

Finance

1.52%

0.51%

8.62%

5.62%

Manufacturing

73.64%

72.20%

16.67%

21.06%

Wholesale and Retail

1.95%

2.31%

5.51%

9.16%

Pharmaceuticals

1.97%

5.03%

12.70%

19.15%

Information Transmission, Software and IT Services

5.03%

9.19%

44.38%

47.61%

Culture, Sports and Entertainment

9.58%

5.61%

8.76%

14.25%

Environmental Protection and Public Utilities

2.31%

0.91%

6.27%

19.63%

Real Estate

0.34%

0.15%

3.98%

21.57%

Transportation, Warehousing and Post

1.73%

1.34%

3.79%

11.19%

Production and Supply of Power,
Heat, Gas and Water

1.93%

2.07%

7.61%

11.80%

Industry083

Research on CSR Repotrs of A-share Listed Companies

Conclusion and Analysis of “Product Quality and Innovation”
The type of economy of an business is precisely reflected in its products, whose design, production, pricing,packaging, circulation, recalling and after-sale services all bear out the business’s social values from different
perspectives. An business’s product quality is inseparable from its social responsibilities, with the former being theembodiment of the latter and the latter being the core rationale of the former. But both a significant defect in productquality and the absence in the performance of social responsibilities are severely detrimental to the image of thatbusiness among consumers.
A sound and sustainable mechanism in the interaction between product quality and social responsibilities includes
three phases. During the phase of production material input, an business should take into comprehensive consideration
its own organizational environment and the general social environment, identify the target beneficiaries of its products andtake into account the expectations of relevant parties. During the phase of production activities, companies shouldincorporate the factors of management quality, core areas and basic practices of social responsibilities, and quality of
products, engineering and service into its production system to avoid isolation among multiple dimensions in theoperating system. During the output phase of products, improvement of customer satisfaction and provision of seamlessafter-sale services can effectively contribute to the sustainable development of companies. Researches on the large
sample of A-share listed companies have led to the conclusion that in the major social background of anti-corruption, carefor consumers and clients and protection of consumer rights are important measures to improve the companies’
performance of social responsibilities.
Xi Jinping, General Secretary of Central Committee of the Communist Party of China, has stressed at the Fifth Plenary
Session of the 18th National People’s Congress that “innovation is the primary driving force behind development, and is
the most critical factor in shaping a country’s comprehensive strength and core competitiveness. Significant
technological achievements are major pillars and trump cards of a major power and China must have the capacity todevelop them by itself. It must rely on its own innovative strength to establish itself on the global stage.” For companies,
innovation is not just a fountain of everlasting vivacity but also bears a synergetic relation to CSR. Rachel et al. havepointed out in their empirical studies the relations between an business’s performance of its social responsibilities andtheir abilities of technical innovation, concluding that both in terms of final products and their production processes, theperformance of social responsibilities for the sake of economic benefits can boost the power of innovation.8 In addition,some scholars have also studied the data of listed companies in China and concluded that the interactive synergy
between CSRs and technical innovation can affect the business’s capital structure, and investors are more likely to invest
in companies with stronger innovative capacities and more willingness to bear social responsibilities, which have more
soft power for sustainable development in the future.9084

2021 CEIBS CSR White Paper

IV. Responsibility for Employees
This part consists of 9 sub-indicators, including: (1) remuneration incentives, (2) supplementary benefits; (3)on-the-job training; (4) communication with employees; (5) staff care; (6) safety management system; (7) production
safety; (8) occupational health and safety certification; and (9) disputes over staff health and safety.
Remuneration and Bonus for Employees(1) Remuneration incentives: among all listed CSR reporting companies in 2019, 54.33% or 539 companies
disclosed their remuneration incentives, such as equity participation or options to encourage staff participation in daily
management. Both the number and the percentage have declined compared with the previous year. According to thestatistics, in the last five years the quantity of companies disclosing remuneration incentives has been rising in general,with the most significant increase between 2015 and 2016. By type of business, 55.01% of SOEs have internal
remuneration incentive measures while the figure is 41.17% for private companies and 3.82% for joint ventures.
Disclosure of Remuneration Incentives by A-share
Listed Companies in 2019 (by Type of Business)

Disclosure of Remuneration Incentives among A-share
Listed Companies from 2015-2019
1000

3.82%

818

800

686
539

600

41.17%

417

400
55.01%
200

83

0
2015

2016

2017

2018

Private Companies

2019

SOEs

Joint Ventures(2) Supplementary benefits: based on available data of all CSR reporting companies in 2019, a total of 893
companies disclosed their supplementary bonuses for employees such as pensions, medical insurance, and birthday
bonuses. In the last five years, the importance that companies attach to employee benefits has been rising, with the mostsignificant rise of 40.98% between 2018-2019. Based on type of business, SOEs and private companies account for the
majority among companies providing additional bonuses to employees, accounting for 54.56% and 42.07% respectively.
Disclosure of Staff Benefits by A-share
Listed Companies from 2015-2019

Disclosure of Staff Benefits by A-share Listed Companies
in 2019 (by Type of Business)

90.02%

1000

90%

800

80%

700
600

54.24%

49.04%

42.07%

60%
50%

36.21%

400

40%

300

30%

200

20%

100

3.37%

70%
50.88%

500

403

310

400

462

893

2015

2016

2017

2018

2019

0

085

100%

900

54.56%

10%0%Private Companies

SOEs

Joint Ventures

Research on CSR Repotrs of A-share Listed Companies

Staff Promotion and Care
(3) Vocational training: among all reporting companies in 2019, 94.25% or a total of 935 companies disclosed
vocational trainings for employees, 16 more than the previous year. Data in the last five years shows that the number ofcompanies providing vocational training for employees has been increasing, indicating that companies attach much
importance to the cultivation of their staff’s capacities.
(4) Communication with employees: among all CSR reporting companies in 2019, 455 disclosed communication
channels between staffs and top executives, such as letters to general managers, heart-to-heart talks with employees,with a slight fall of 8.18% compared with the previous year. By the type of companies, we can discover that SOEs accountfor the majority in companies disclosing staff communication channels, with a share of 55.14%; private companies comein second with a share of 41.73%; and joint ventures account for 3.13%.
Disclosure of Communication Channels by A-share
Listed Companies from 2015-2019
600
500

47.51%

45.71%

50.00%

Disclosure of Communication Channels by A-share
Listed Companies in 2019 (by Type of Business)
60%

54.03%
45.87%

50%

400

40%

300

30%

200

20%

100
0

353

362

428

509

455

2015

2016

2017

2018

2019

3.13%

41.73%
55.14%

10%
0%

SOEs

Private Companies

Joint Ventures(5) Staff care: among all reporting companies in 2019, a total of 837 companies disclosed about their care for
employees, such as annual health inspections, child stewardship, and psychological health guarantees, accounting for84.38% with a slight fall compared with the previous year.
Disclosure of Staff Care by A-share
Listed Companies from 2015-2019

Disclosure of Vocational Training by A-share
Listed Companies from 2015-2019
97.56%
1000

89.77%
84.22%

94.25%

100%

86.92%

900

90%

700

600

80%

500

400

70%

800

200

0

667

2015

744

2016

819

2017

919

2018

935

2019

84.66%

89.14%

92.76%

92.36%

84.38%

80%

60%

40%
300
20%

60%
100
50%

100%

629

706

794

870

837

2015

2016

2017

2018

2019

0

0%

Staff Safety and Vocational Health(6) Safety management system: among all reporting companies in 2019, 61.39% or 609 disclosed their safety
management systems, less than 665 in the previous year. In general, the number has been increasing over the last five
years. By industry, the disclosure rate is highest in the production and supply of electricity, heat, gas and water, which is
85.19%; the next are pharmaceuticals and transportation, warehousing and post, accounting for 76.92% and 76.74
respectively.
(7) Training on production safety: among all CSR reports in 2019, 62.8% or a total of 263 companies disclosed about
their in-house production safety trainings. By industry, the disclosure rate is highest in the production and supply ofelectricity, heat, gas and water, which is 62.8%. The next are manufacturing, wholesale and retail, accounting for 73.44%
and 71.23% respectively.
(8) Occupational health and safety certification: among all CSR reports in 2019, 20.87% or a total of 207 companies
disclosed their vocational health certifications, with the highest rate of 30.38% in the manufacturing industry.
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2021 CEIBS CSR White Paper

Disclosure of Safety Management System, Training on Production Safety and Occupational Healthand Safety by A-share Listed Companies from 2015-2019
800

66.36%

700

61.39%

57.58%

600

71.97%

70.59%
57.83%

70%
60%

49.93% 46.84%

48.05%

500

80%
62.80%

50%
40%

400
300

16.82% 15.78% 15.30%

200
100

357

456

568

665

609

371

495

588

678

623

125

2015

2016

2017

2018

2019

2015

2016

2017

2018

2019

2015

131

23.67% 20.87%

30%
20%

189

223

10%

207

0%

0
Safety management system

Training on production safety

2016
2017
2018
Occupational health andsafety certification

2019

Disclosure of Safety Management System, Training on Production Safety and Occupational Health and
Safety by A-share Listed Companies in 2019 (by Industry)
Finance10.64%

1.06%

15.96%
72.97%

Manufacturing

67.12%

Wholesale and Retailing

Information Transmission, Software and IT Services

41.18%

Culture, Sports and Entertainment

39.51%

45.10%

0%

50%

4.00%

51.06%

81.48%

100% 0%

Safety management system

8.51%

70.59%

85.19%

Power, Heat, Gas and Water Production and Supply

18.52%

68.00%

76.47%

Transportation, Warehousing and Post

21.57%

54.32%

40.43%

Real Estate25.64%

69.23%

74.00%

Environmental Protection and Public Utilities

13.70%

71.23%

76.92%

Pharmaceuticals

30.38%

73.44%

50%

13.73%
7.41%

100% 0%20%
40%
Occupational health andsafety certification

Training on production safety(9) Disputes over staff health and safety: in the 2019 CSR report, totally 5 companies have been involved in relevant
disputes, 3 over the previous year. By industry, 2 happened in manufacturing, 1 in wholesale and retail, 1 in thepharmaceutical industry, and 1 in the production and supply of electricity, heat, gas and water.
Disclosure of Disputes over Safety Issues by A-share
Listed Companies from 2015-2019
6Disclosure of Disputes over Safety Issues by A-share
Listed Companies in 2019 (by Industry)
1

5

5
4

2
3

3

3

3

2

1

2
1
1
0

Production and Supply of Electricity, Heat, Gas, and Water
2015

087

2016

2017

2018

2019

Pharmaceuticals

Wholesale and Retail

ManufacturingResearch on CSR Repotrs of A-share Listed Companies

Summary and Analysis of Responsibility for Employees
Human resources are important assets of business operation and are the foundation of business organizational
structures. Employees are simultaneously the producers, sellers, operators and service providers of an business, andattention to staff treatment, working environment improvement and staff capacity enhancement are all constituent
elements of responsibility for employees. In the context of constantly rising labor cost nowadays, some companies havebeen using cheap tricks in order to reduce their operating cost, such as by pressing down on the wage standards andignoring staff treatment, which indeed lead to cost reduction and cost-efficiency improvement in the short run, but in thelong term they will harm staff proactiveness, loyalty, talent retention and productivity and will pose hazards for businesssustainability. Nicolas and Theodore have tested large amounts of data in their empirical studies and have discoveredthat corporate social responsibility of companies have significant positive correlation with staff loyalty, and significantly
affect business profits10
Especially, it is of particular importance for the manufacturing industry to improve their level and quality in their CSR
performance. Based on analysis and testing on various sorts of data, we have discovered that on academic grounds: 1)
the delivery of responsibility for employees in the manufacturing industry would positively affect staff loyalty and businessperformance; 2) the delivery of responsibility in meeting the physiological needs of staffs in the manufacturing industry
would positively affect staff loyalty and business performance; 3) the delivery of responsibility in meeting the needs ofstaffs in the manufacturing industry would positively affect staff loyalty and business performance; 4) the delivery of
responsibility in meeting the self-actualization needs of staffs in the manufacturing industry would positively affect staff
loyalty and business performance; 5) staff loyalty has a significant positive influence on the business’s performance in the
manufacturing industry; 6) there is significant neglect of responsibilities in meeting the safety needs of staffs, which has
posed negative influence on the companies’ performance11
In general, by paying attention to the employees’ personal interests, proactively performing responsibility for
employees, caring about their personal capacities and loyalty and improving their feeling of happiness, companies canshape a better corporate culture inside and establish a good corporate image outside, promote strategic cooperation andimprove the sustainability of business operation. This represent huge intangible wealth for companies. For countries, theproactive delivery of responsibility for employees by companies can reduce social conflicts and improve the life satisfactionof residents in the country and the region. This has tremendous social significance for social harmony and stability.

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V. Diversification and Social Equality
This part consists of 5 indicators: (1) female executives; (2) female board directors, (3) all-male directors, supervisorsand executives; (4) vulnerable groups and (5) equal opportunities.
The Status of Females in the Corporate Governance Layer Has Been Improved, With Significant Difference Among Industries(1) Female executives: among all reporting companies in 2019, 64.01% or 635 companies disclosed the percentage
of female executives, 1.27% higher than the previous year. For the last five years, the proportion of female executives has
been rising. By industry, the share of female executives in the pharmaceutical industry is 76.92%, which is the highest.
The next are wholesale and retailing, culture, sports and entertainment, with females representing 75.34% and 75.31%
among executives.
(2) Female directors: among all reporting companies in 2019, 7.16%, or a total of 71 companies disclosed thepercentage of female directors, 0.68% or 10 more than the previous year. By industry, the finance industry has the highest
percentage of female directors, namely 13.83%; the next is culture, sports and entertainment, with a share of 12.35%.
Disclosure of Female Executives by A-share
Listed Companies from 2015-2019
700

62.85%

63.76%

600

59.58%

62.74%

64.01%

Disclosure of Female Directors by A-share
Listed Companies from 2015-2019

60

50%

400

40%

300

30%

200

20%

0

7.16%

467

505

510

591

635

2015

2016

2017

2018

2019

8%

6.48%

60%

500

100

80

70%

6%
4.29%

40

3.39%

3.10%

4%

20

2%

10%
0

0%

23

34

29

61

71

2015

2016

2017

2018

2019

0%

Disclosure of Female Executives and Female Directors by A-share Listed Companies in 2019 (by Industry)
62.75%

Transportation, Warehousing and Post

5.88%
73.47%

Real Estate
48.00%

Environmental Protection and Public Utilities

2.04%
2.00%

75.31%

Culture, Sports and Entertainment

72.55%

Information Transmission, Software and IT Services

12.35%
5.88%

76.92%

Pharmaceuticals

8.97%

75.34%

Wholesale and Retail59.81%

Manufacturing

8.22%
5.74%

57.45%

Finance
40%

50%

60%

13.83%
70%

Female executives

80%

0% 2% 4% 6% 8% 10% 12% 14%
Female directors(3) All-male directors, supervisors and executives: in 2019, a total of 26 companies reported that they have no female
directors, supervisors and executives, less than the 61 companies previous year, and account for 2.62% of all reporting
companies. By industry, only the pharmaceutical and the real-estate industries have seen female directors, supervisorsand executives in all companies, and in all other industries there are companies with all-male directors, supervisors andexecutives, with 13 such companies in the manufacturing industry, the highest of all.
(4) Vulnerable groups: among all reporting companies in 2019, a total of 59 companies disclosed inclusive policies
for vulnerable groups (i.e. the physically challenged or the rehabilitated), accounting for 5.96% with a year-on-year fall of
3.92%. By industry, the wholesale and retailing industry is the most inclusive for the vulnerable groups, with 10.96% ofcompanies disclosing inclusive policies, and the financial industry came in second, with a proportion of 9.57%.

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Research on CSR Repotrs of A-share Listed Companies

Disclosure of Employment of Vulnerable Groups
by A-share Listed Companies from 2015-2019

Disclosure of All-male Directors, Supervisors and Executives
by A-share Listed Companies from 2015-2019
50

46

43
5.79%

40

110

6%

41
5.18%

90

35

5.37%

4%

26

30

2.62%

2%

10

12%

9.87%

10%

8.33%

8%

5.95%

50

6%

30

4%

10
0

10.40%

70

3.72%

20

11.04%

82

66

89

93

59

2015

2016

2017

2018

2019

2%

0%
2015

2016

2017

2018

2019

Disclosure of All-male Directors, Supervisors, Executives and Employment of Vulnerable Groups by A-share Listed Companies in 2019 (by Industry)

Finance2

9.57%

Manufacturing

13

Wholesale and Retailing
Pharmaceuticals

2

10.96%

0

8.97%

Information Transmission,
Software and IT Services

1

Culture, Sports and Entertainment

1

Environmental Protection
and Public Utilities
Real Estate

4.78%

7.84%
3.70%
2

4.00%

0

2.04%

Transportation, Warehousing and Post

1

Production and Supply of Electricity,
Heat, Gas and Water

1.96%
3

0

3

7.41%
6

9

12

15

0%

2%

All-male directors, supervisors and executives

4%

6%

8%

10%

Vulnerable groups(5) Equal opportunities: among all reporting companies in 2019, 184 emphasized employing staffs of different
ethnicity, religious belief and nationality, accounting for 18.55%, lower than the previous year.
Disclosure of Equal Opportunities by A-share Listed Companies from 2015-2019
250

24.31%
21.40%

200

19.57%

20.79%

27%
18.55%

22%
17%

150

12%
100

7%

50
159

155

178

229

184

2015

2016

2017

2018

2019

2%
-3%

0

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2021 CEIBS CSR White Paper

Conclusion and Analysis of Diversity and Equal Opportunities
After China’s reform and opening up in 1978, social advocacy of gender equality has facilitated the rise in the
demand for women in the workforce. With the deepening of China’s market economy, Chinese women have been
breaking through glass ceilings that used to be the corollary of traditional gender role models, and have come to assume
significant positions. Compared to male managers, women tend to show more social care in the daily operation andgovernance of companies. Terjesen et al. discovered in their research on female executives that female managers tended
to identify the context of their companies according to a framework of moral and ethical standards and made morally
informed decisions12 such as investor protection, care for the underprivileged and care for the personal wellbeing of
employees. Empirical data suggest that although the share of female executives has significantly increased over theyears, by 2019, this share had not even reached 10%, which means that gender inequality still exists among A-sharelisted companies.
Probing into the relationship between the presence of female executives and the valuation of companies, scholars
have pointed out with data the universal problem of over-investment among listed companies in China, and the relatively
fewer female executives in listed companies. Based on collation and analysis with a series of models, they haveconcluded that (1) the presence of female executives in listed companies has a positive effect for business value; (2) the
share of female executives has a negative correlation with over-investment; (3) over-investment is an intermediary variablein how the presence of female executives influences business value, namely female executives can contribute to a rise inbusiness value by curbing overinvestment tendencies.13 Therefore, female executives have a positive influence on thevalue of companies, the level of corporate governance and the delivery of companies’ social responsibilities.
In terms of vulnerable groups, important elements of corporate social responsibility include care for the vulnerable andprovision of aid where feasible. Though China has achieved moderate prosperity in society, the personal interests of a partof vulnerable groups have been neglected in the process of institutional transformation and high-speed economic growth,or have been marginalized due to various reasons. Most of these groups do not have fixed income, and can hardly rid
themselves of their existential hardships by their own efforts. China is a socialist country with the developmental goal ofcommon prosperity, and the treatment for vulnerable groups should prioritize the provision of economic help for theneediest and equal job opportunities so that individuals in such groups can be relieved of their dire situations and regain
their confidence. This would significantly contribute to the overall social harmony and improvement in the quality of common
prosperity. As intermediary facilitators in this process, companies should join national institutions in building an inclusive
system for vulnerable groups and contribute to the promotion of social harmony so long as their capacities permit.

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VI. Environmental Responsibility
This part includes nine indicators: (1) environmental benefit, (2) energy conservation, (3) reduction in three types ofwaste (waste gas, waste water and industrial residue), (4) circular economy, (5) green office, (6) environmental protection
and public welfare, (7) environmental certification, (8) environmental commendation, and (9) environmental penalty.
(1) Environmental benefit: in 2019, 45.26% of companies disclosed in CSR reports that they developed or utilized
environmentally beneficial products, services, equipment or technologies. The energy production and supply industry had
the highest disclosure rate, at 85.19%; the environmental protection and public utilities sector came in second, at 64%.
(2) Energy conservation: in 2019, 43.95% of companies disclosed their energy-saving performance. Among them,
64% of companies in the environmental protection and public utilities sector disclosed their energy-saving measures andresults; the transportation, warehousing and post industry reported the second highest disclosure rate; the culture, sports
and entertainment industry had the lowest disclosure rate, at only 28.4%.
(3) Reduction in three types of waste: in 2019, 52.52% of companies disclosed their efforts to reduce generation of
three types of waste. Among them, the pharmaceutical industry had the highest disclosure rate, at 82.05%; the energy
production and supply industry came in second, at 81.48%; the financial industry reported the lowest, at 8.51%.
Industry

Environmental benefit

Energy conservation

Finance32.98%

32.98%

8.51%

Manufacturing

50.72%

46.65%

63.64%

Wholesale and Retail35.62%

34.25%

60.27%

Pharmaceutical

26.92%

48.72%

82.05%

Information Transmission, Software and IT Services

31.37%

41.18%

15.69%

Culture, Sports and Entertainment

22.22%

28.40%

38.27%

Environmental Protection and Public Utilities

64.00%

64.00%

48.00%

Real Estate

53.06%

40.82%

36.73%

Transportation, Warehousing and Post

56.86%

60.78%

56.86%

Production and Supply of Electricity, Heat,
Gas and Water

85.19%

37.04%

81.48%

Reduction in three types of waste(4) Circular economy: In 2019, 23.08% of companies disclosed their efforts to develop a circular economy. Theenergy production and supply industry had the highest disclosure rate, at 40.74%, in line with the general practice ofrecycling resources in this industry; the financial industry reported the lowest, at 8.51%.
(5) Green office: In 2019, 36.19% of companies disclosed their environmentally friendly measures in daily operations,such as growing plants, sorting waste, saving water and electricity, and going paperless. The financial industry reported
the highest disclosure rate at 69.15%. High levels of intelligent and digital application and asset-light operations
contributed to the strong performance of these industries in adopting green office practices.
(6) Environmental protection and public welfare: In 2019, 54.74% of companies disclosed that they took part in
activities concerning environmental protection and public welfare, such as tree planting and garbage clearing, a
year-on-year increase of 25.55%, indicating a growing awareness in this area. The financial industry had the highest
disclosure rate at 74.47%.
Industry

Circular economy

Green officeEnvironmental protection and public welfare

Finance

8.51%

69.15%

74.47%

Manufacturing

28.71%

27.51%

50.48%

Wholesale and Retail28.77%

36.99%

60.27%

Pharmaceutical

20.51%

37.18%

56.41%

Information Transmission, Software and IT Services

13.73%

66.67%

45.10%

Culture, Sports and Entertainment

13.58%

38.27%

46.91%

Environmental Protection and Public Utilities

12.00%

28.00%

44.00%

Real Estate

16.33%

34.69%

63.27%

Transportation, Warehousing and Post

25.49%

37.25%

62.75%

Production and Supply of Electricity, Heat,
Gas and Water

40.74%

18.52%

62.96%

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2021 CEIBS CSR White Paper(7) Environmental certification: In 2019, 26.01% of companies disclosed that they received environment
management system certification, i.e. ISO14001. The manufacturing industry reported the highest disclosure rate at
39.23%, followed by the pharmaceutical industry at 38.46%.
(8) Environmental commendation: In 2019, 245 companies disclosed that they had been cited for environmental
protection efforts and had earned such honors as “green business” and “business champion for energy saving andemission reduction”, representing 24.7% of the total. The real estate industry reported the highest disclosure rate at
42.86%, followed by the production and supply of electricity, heat, gas and water industry at 37.04%.
(9) Environmental penalty: A total of 12 companies received environmental penalties in 2019, down by nine from 21
companies in 2018. Among them, eight were from the manufacturing industry, accounting for 67%; two (17%) engaged
in the production and supply of electricity, heat, gas and water; the environmental protection and public utilities sector
and the pharmaceutical industry reported one penalty each, each accounting for 8% of the total.
Industry

Environmental certification

Environmental commendation

0%

12.77%

0

Manufacturing

39.23%

28.47%

8

Wholesale and Retail17.81%

26.03%

0

Pharmaceutical

38.46%

25.64%

1

Information Transmission, Software and IT Services

25.49%

15.69%

0

Culture, Sports and Entertainment

20.99%

22.22%

0

Environmental Protection and Public Utilities

10.00%

24.00%

1

Real Estate

6.12%

42.86%

0

Transportation, Warehousing and Post

11.76%

11.76%

0

Production and Supply of Electricity, Heat, Gas and Water

7.41%

37.04%

2

Finance

Environmental penalty

Conclusion and analysis of environmental responsibility
Article 6 of the Environmental Protection Law of the People’s Republic of China (2014 Revision) stipulates that allentities and individuals are obligated to protect the environment. Local people’s governments at all levels shall be
responsible for the environmental quality within their respective administrative regions. Companies, public institutions,and other businesses shall prevent and reduce environmental pollution and ecological disruption, and assume liabilities
for damages caused by them. Citizens shall raise their awareness of environmental protection, adopt low-carbon andeconomical lifestyles, and fulfill their obligation to protect the environment.
An academic study found through multi-dimensional data analysis that a company’s value was inextricably linked to
its investment in environmental protection, as illustrated in the following three points: (1) Environmental investment andcorporate value form a U-shaped relationship. With the increase in environmental investment, corporate value decreases
at first, and then increases. Many companies in China are still in the former stage where environmental investment reduces
corporate value. (2) High-quality disclosure of environmental information can moderate the relationship between
environmental investment and corporate value, and flatten the U-shaped curve by mitigating the value reduction effect ofenvironmental investment. Improved quality of environmental information disclosure can raise stakeholders’ recognition of
the company’s environmental responsibility, and make them realize that the company’s value lies not only in its economic
value, but also in social and ecological value, which helps ease the tension between environmental investment andcorporate value. Moreover, high-quality disclosure can move the inflection point of the U-shaped curve to the right.
Improved disclosure quality enables stakeholders to distinguish between a company’s ex-post remedial investment andex-ante environmental investment, and determine the value of its environmental input. Therefore, a company’senvironmental investment can only increase its corporate value after it invests substantially in environmental protection. (3)The hypothesis that high-quality disclosure of environmental information can improve the overall level of the U-shaped
curve is only true when the company makes substantial environmental investment. If a company invests little inenvironment protection, high-quality disclosure will only expose its deficiencies in this area and reduce its value. But when
the company invests substantially in it, such disclosure can reduce information asymmetry, and improve the level of the
U-shaped curve.14
According to the information disclosed in 2019 CSR reports, it is obvious that companies made increased investments
in environmental protection, which indicates a growing environmental awareness among A-share listed companies. If
companies can maintain or increase their environmental investment and make it part of their CSR, they can expect anincrease in their corporate value, brand image and competitive edge in the long run.
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Research on CSR Repotrs of A-share Listed Companies

VII. Social Contribution and Charity
This part includes nine indicators: (1) donations, (2) social contribution value per share, (3) contribution to education,(4) charitable activities, (5) volunteering, (6) international aid, (7) job creation, (8) contribution to economic growth, and(9) layoff.
Social Welfare(1) Donations: in 2019, 855 companies disclosed their engagement in social welfare programs. 855 companies
made charitable donations, 69 more than the previous year, representing 86.19% of the total. In general, the number ofcompanies making donations rose during the five years between 2015-2019.
Total donations in 2019 stood at ¥153.489 billion, much higher than aggregate donations in the period 2015-2018;
companies donated ¥179.5198 million on average in 2019. These figures illustrate the rising awareness of social welfare
in the business community.
2015-2019 Total amount of donations madeby A-share listed companies(in ¥100 million)
2000

2015-2019 Average amount of donations madeby A-share listed companies(in ¥10,000)

1,534.89

1500

15000

1000

10000

500

38.52

42.87

57.27

64.68

2015

2016

2017

2018

17,951.98

20000

5000

574.08566.35843.5

822.87

2015

2016

2017

2018

0

0
2019

2019

Major industries were keenly aware of the significance of making charitable donations, with the lowest donation rate
at 72.55% and the highest at 94.87%. Companies in the information transmission, software and IT services industry
donated ¥1,860.3962 million on average, topping other industries; the transportation, warehousing and post industry
reported the lowest average amount, at ¥7.6311 million.
Industry

Proportion

Average donation (¥10,000)

Finance93.62%

Manufacturing

84.69%

5909.98

Wholesale and Retail90.41%

21668.75

Pharmaceutical

94.87%

7074.06

Information Transmission, Software and IT Services

78.43%

186039.62

Culture, Sports and Entertainment

85.19%

779.80

Environmental Protection and Public Utilities

82.00%

72807.76

Real Estate

93.88%

3107.82

Transportation, Warehousing and Post

72.55%

763.11

Production and Supply of Electricity, Heat, Gas and Water

88.89%

1704.426700.87(2) Social contribution value per share: Social contribution value per share (SCVPS), introduced by the Shanghai
Stock Exchange, measures a company’s overall contribution to the society with economic benefits.
Calculation of SCVPS: SCVPS = (economic contribution + social contribution – other social costs such asenvironmental pollution) ÷ capital stock, wherein: “economic contribution = net profit + gross tax + interest expense +payroll”; “social contribution = total spending on employee benefits and social security + total spending on employee
training + total donations”; other social costs, such as environmental pollution, shall be calculated based on the sum of
the sewage charges and the fines imposed for environmental violations in the year.
In 2019, 122 companies disclosed their SCVPS, four fewer than the previous year, accounting for 12.3% of the total.
By industry, 53 companies from the manufacturing industry and 22 from the financial industry disclosed SCVPS in
2019, outnumbering other industries. In terms of the disclosure rate, the financial industry and the production and supplyof electricity, heat, gas and water industry led the pack with 23.4% and 22.22% respectively.
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2021 CEIBS CSR White Paper

Industry

Number

Proportion

Finance2223.40%

Manufacturing

53

12.68%

Wholesale and Retail

3

4.11%

Pharmaceutical

8

10.26%

Information Transmission, Software and IT Services

2

3.92%

Culture, Sports and Entertainment

7

8.64%

Environmental Protection and Public Utilities

3

6.00%

Real Estate9

18.37%

Transportation, Warehousing and Post

9

17.65%

Production and Supply of Electricity, Heat, Gas and Water

6

22.22%

By type of business, joint ventures had the highest average SCVPS at ¥3.04, followed by private companies at ¥2.88,
and then by SOEs at ¥2.66.
Performance of Social Contribution(3) Contribution to education: in 2019, 625 companies (63% of the total) disclosed their efforts to support education,a year-on-year increase of 11.69%. The proportion of A-share listed companies contributing to education grew at an
average annual rate of 14.78% in the five years between 2015-2019.
(4) Charitable activities: in 2019, 703 (70.87%) companies engaged in charitable programs, a remarkable increaseof 34.18% from the previous year.
(5) Volunteering: in 2019, 458 (46.17%) companies disclosed volunteering activities, higher than previous years.
2015-2019 Number of A-share Listed Companies
Disclosing Contribution to Education, Charitable Activities, and Volunteering
703

700
625

600
521

500

509

441
400

366

387

364

425

452

458

2018

2019

320

300

280
201

200
147
100
0
2015

2016

2017

2018

Contribution to education

2019

2015

2016

2017

2018

Charitable activities

2019

2015

2016

2017

Volunteering

By industry, the financial industry showed the strongest performance in contribution to education, with a disclosure
rate of 88.3%, followed by the production and supply of electricity, heat, gas and water industry at 70.3%, and thewholesale and retail industry at 69.86%. The financial and real estate industries reported the highest disclosure rates incharitable activities, at 88.3% and 85.71% respectively. The real estate industry outperformed other industries in thedisclosure rate of volunteering, at 65.31%.

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Research on CSR Repotrs of A-share Listed Companies

Industry

Contribution to education

Charitable activities

Volunteering

Finance88.30%

88.30%

55.32%

Manufacturing

61.72%

65.07%

46.17%

Wholesale and Retail69.86%

76.71%

41.10%

Pharmaceutical

56.41%

82.05%

51.28%

Information Transmission, Software and IT Services

58.82%

64.71%

35.29%

Culture, Sports and Entertainment

60.49%

65.43%

32.10%

Environmental Protection and Public Utilities

56.00%

72.00%

42.00%

Real Estate

63.27%

85.71%

65.31%

Transportation, Warehousing and Post

43.14%

60.78%

47.06%

Production and Supply of Electricity, Heat, Gas and Water

70.37%

70.37%

48.15%

By type of business, joint ventures had the highest disclosure rate in contribution to education, at 67.74%; privatecompanies had the highest rate in charitable activities, at 73.67%; SOEs had the highest rate in volunteering, at 51.01%.
2019 Proportion of A-share Listed Companies Disclosing Contribution to Education, Charitable Activities, and Volunteering (by Type of Business)
100%
61.79%

68.92%

67.74%

64.49%

73.67%

67.74%
51.01%
40.34%

50%

0%

SOEs

Private Joint Ventures
Companies

SOEs

Contribution to education

Private Joint Ventures
Companies

SOEs

Charitable activities

38.71%

Private Joint Ventures
Companies
Volunteering(6) International aid: in 2019, 97 (9.78%) companies disclosed payment of international aid, up by 3.2% from theprevious year. The number of companies offering international aid steadily increased during the five years between 2015
and 2019.
(7) Job creation: in 2019, 563 (56.75%) companies disclosed job creation measures, up by a significant 26.07% from2018. On the whole, a growing number of companies disclosed job creation measures during the five years between 2015
and 2019.
(8) Contribution to economic growth: in 2019, 369 (37.2%) companies disclosed that their business operations
facilitated local economic growth and community development (e.g. building localized supplies chains or contributing to
GDP growth), a year-on-year increase of 9.49%. According to the statistics for the five years between 2015 and 2019, thedisclosure rate dropped in 2016, but picked up again annually until 2019.
2015-2019 Disclosure about International Aid, Job Creation, and Contribution to Economic Growth of A-share Listed Companies
563

600

400

348
269

369

316

289

178

200

0

266

58

62

35

45

2015

2016
2018
2017
International aid

216

261

97

2019

2015

2016

2017
2018
Job creation

2019

2015
2016
2017
2018
2019
Contribution to economic growth096

2021 CEIBS CSR White Paper

By industry, the production and supply of electricity, heat, gas and water industry and the manufacturing industry had
the highest disclosure rates in international aid, at 14.81% and 12.92%. In terms of job creation, the pharmaceuticalindustry had the highest disclosure rate at 69.23%, followed by the retail and wholesale industry at 63.01% and the
manufacturing industry at 59.81%. As for contribution to economic growth, the environmental protection and public
utilities industry had the highest disclosure rate at 48%, followed by the real estate and financial industries, at 42.86% and42.55% respectively.
Industry

International aid

Job creation

Contribution to economic growth

Finance

9.57%

53.19%

42.55%

Manufacturing

12.92%

59.81%

40.19%

Wholesale and Retail2.74%

63.01%

41.10%

Pharmaceutical

8.97%

69.23%

37.18%

Information Transmission, Software and IT Services

5.88%

52.94%

33.33%

Culture, Sports and Entertainment

9.88%

45.68%

19.75%

Environmental Protection and Public Utilities

6.00%

52.00%

48.00%

Real Estate

4.08%

48.98%

42.86%

Transportation, Warehousing and Post

7.84%

54.90%

29.41%

Production and Supply of Electricity, Heat, Gas and Water

14.81%

55.56%

18.52%

By type of business, private companies reported the highest disclosure rate in international aid at 23.43%; joint
ventures had the highest rate in job creation and contribution to economic growth, at 67.74% and 41.94% respectively.
2019 Disclosure About International Aid, Job Creation, and Contribution to Economic Growth of A-share Listed Companies(by Type of Business)
80%

67.74%
57.04%

60%

55.56%
35.83%

40%

38.65%

41.94%

23.43%
20%

16.13%

11.15%0%
SOEs

PrivateJoint Ventures
Companies

SOEs

International aid

PrivateJoint Ventures
Companies

SOEs

PrivateJoint Ventures
Companies

Job creation

Contribution to economic growth(9) Layoff: in 2019, 15 companies had mass layoffs, one fewer than in 2018. On the whole, the number fell between
2015-2019.
By industry, six disclosing companies were from the financial industry, the largest number of all industries; three werefrom the manufacturing industry; the real estate, wholesale and retail, and culture, sports and entertainment industries
had two companies each.
By type of business, eight SOEs, six private companies, and one joint venture disclosed such information in 2019.

Layoff by industry-2019097

Number of companies

Layoff by type of business-2019

Number of companies

Real Estate

2

SOEs

8

Manufacturing

3

Private Companies

6

Finance6

Joint Ventures

1

Wholesale and Retail2

Culture, Sports and Entertainment2

Research on CSR Repotrs of A-share Listed Companies

Conclusion and analysis of social contribution and charity
Charity is usually considered the third form of wealth distribution in society, for it is conducive to narrowing the wealthgap, improving the quality of life of the underprivileged, easing social tensions, and building a more cohesive andharmonious society.
There is a popular misconception that charity is something that should be undertaken by the government,
businesses and rich people, which has impeded the development of charitable causes in China. In addition to six
Chinese laws and regulations concerning charity and public welfare donations (i.e. Law on the Red Cross Society, Law
on Donations for Public Welfare, Regulation on Registration and Administration of Social Organizations, Regulation on
Registration and Administration of Foundations, Business Income Tax Law, and Regulation on the Implementation of the
Individual Income Tax Law), the country’s first comprehensive law on charity, Charity Law of the People’s Republic ofChina, came into force on September 1,2016. This legislation aims to raise the quality and transparency of charity work,
protect the interests of concerned parties in charitable activities, and promote charitable causes in a systematic,
professional and law-based manner in China.
Companies as important participants in charitable activities should understand the relationship between their
engagement in charity and corporate value. Academic researchers have reached the following conclusions based on theempirical analysis of market environment, charitable donations and corporate value of A-share listed companies in China:(1) The more market-oriented a business environment is, the more likely charitable donations can boost a company’s
corporate reputation or enable it to forge close ties with stakeholders, which in turn can increase its corporate value; (2)The better the market environment, the easier it is for companies to devote more efforts to managing philanthropic giving
and generate more value from it; (3) The better the market environment, the more likely stakeholders will reward reputablecompanies or those in close ties with them, which makes corporate giving a highly rewarding tool; (4) The better themarket environment, the more value there is in making charitable donations.15 It can be concluded that a company’s
fulfillment of social responsibilities can bring benefits to itself and society as a whole.
As revealed by CSR reports of Chinese A-share listed companies in 2019, there was an increase in the number ofcompanies making donations, engaging in charitable spending, and forms and areas of philanthropic activity, compared
to previous years. Some companies not only participated in domestic charity initiatives, but also extended help abroad
and played a philanthropic role in the international arena. In his book The Gospel of Wealth, Andrew Carnegie listed
education as the first of the seven best areas for philanthropic giving. Statistics in recent years also show that Chinese
A-share listed companies prefer to donate to the education sector. This can be explained by the following three reasons
from the academic perspective: (1) The development of higher education has a significant positive spillover effect on theinnovation capability of large and medium-sized industrial companies; (2) Universities’ investment in education andresearch, as well as their knowledge output have a positive spillover effect on the innovation capability of large andmedium-sized industrial companies; (3) There is a positive correlation between the full-time equivalent of R&D personnel
in large and medium-sized industrial companies and the innovation capability of these companies.16 This is why
companies prioritize the education sector in philanthropic giving. In general, Chinese A-share listed companies haveincreased their investment in charitable causes, though with polarized performance. Only when companies incorporate
philanthropy into their business and values, can they draw sustainable support from a sound social environment.

098

2021 CEIBS CSR White Paper

VIII. Analysis of indicator scores of CEIBS alumni companies
This part reviews the CSR reports disclosed by A-share listed companies run by CEIBS alumni who have attended
CEIBS programs, including MBA, EMBA, Finance MBA, Global EMBA, Hospitality EMBA, Executive Education, andEntrepreneurial Leadership Camp.
In 2019, 81 CEIBS alumni companies disclosed CSR reports, representing 8.17% of A-share listed companies that
disclosed CSR reports, up by 0.63% from the previous year. The number and proportion of alumni companies that
disclosed CSR reports climbed from 2016 to 2019, reflecting the growing CSR awareness among CEIBS alumni
companies.
By region, 58 (71.6%) alumni companies that disclosed CSR reports in 2019 were located in east China, 10 (12.35%)
were from the west and 11 (13.58%) from central China; only two were in the north east.
2016-2019 CSR Report Disclosure of CEIBS Alumni Companies
100

2019 CSR Report Disclosure of CEIBS Alumni Companies (by Region)

9%

81

60

58

71
54

60
8.17%

50

8%

40

7%

20

7.54%

6.82%

7.01%

10

Central

West

2

0

0

6%
2016

11

2017

2018

2019

Northeast

East

By industry, the manufacturing industry contributed the largest number of alumni companies that disclosed CSR
reports, which was 28, taking up 34.57% of the total; the culture, sports and entertainment sectors came in second with
13 (16.05%) companies; the wholesale and retail industry had 11 (13.58%) companies.
By type of business, private alumni companies took up the largest proportion at 60.49%, followed by SOEs at
34.57%, and joint ventures of 4.94%.
2019 CSR Report Disclosure of CEIBS Alumni Companies(by Industry)

2019 CSR Report Disclosure of CEIBS Alumni Companies(by Type of Business)

4

Finance

4.94%
28

Manufacturing
11

Wholesale and Retail34.57%

7

Pharmaceutical
Information Transmission, Software and
IT Services

9
13

Culture, Sports and Entertainment
Environmental Protection and Public Utilities

1

Real Estate

2

Transportation, Warehousing and Post
Production and Supply of Electricity, Heat,
Gas and Water

2

Others260.49%

2

0

SOEs
10

20

Private Companies

Joint Ventures

30

Statistics about the length of CSR reports of alumni companies remained stable from 2016 to 2019: the longest
reports averaged 122 pages while the shortest ones 5 pages; the average number of pages hovered around 42 and the
median around 35.

099

Research on CSR Repotrs of A-share Listed Companies

2019 Overall CSR Score of CEIBS Alumni Companies
Among the 81 alumni companies that disclosed CSR reports in 2019, the highest score was 90.69, the lowest 18.09,
and the average 51, which was higher than 48.59, the average score of A-share listed companies in 2019.
By region, alumni companies in west China scored the highest on average, at 54.21; those in the east of the country
averaged 51, in the center 48.72, and in the north east 47.98.
2019 CSR Score of CEIBS Alumni Companies
60

54.21

50

51

40

32

30
20
10
0

48.72

29

47.98

10

9

1
10-30

31-50

51-70

71-90

above 90

East

CentralWest

Northeast

By industry, the pharmaceutical industry scored the highest at 68.06, followed by the production and supply ofelectricity, heat, gas and water industry at 55.48, and wholesale and retail at 54. The lowest-scoring industries were realestate, environmental protection and public utilities, and transportation, warehousing and post.
By type of business, joint ventures scored the highest at 69.05, followed by SOEs at 52.23, and private companies
at 48.84.
By indicator category, the average score of CEIBS alumni companies in any of the seven CSR indicator categories
was higher than the average of A-share listed companies that disclosed CSR reports in 2019.
2019 CSR Score of CEIBS Alumni Companies
42.14
45.58

Finance

53.57
51.49

Manufacturing
Wholesale and Retail

By Industry

Pharmaceutical

52.59

Information Transmission, Software and
IT Services

46.48

Culture, Sports and Entertainment

39.48
37.02

Environmental Protection and Public Utilities

52.97

43.53
46.81

35.71

Transportation, Warehousing and Post

68.06

45.37

22.4

Real Estate

45.56

Production and Supply of Electricity, Heat,
Gas and Water

49.23

55.48

42.85
41.47

Social responsibility management

48.35
45.17

Company operations and management
By Indicator Category

54

46.17

51.54
50.88

Product quality and innovation

71.60
68.28

Responsibility for employees
Diversity and equalopportunities

42.14

49.38

Environmental responsibility

44.44
43.86

Social contribution and charity

45.46
41.99
0

Average score of alumni companies

60

80

Industry average of A-share listed companies (excl. CEIBS alumni companies)100

2021 CEIBS CSR White Paper

Year-on-Year Comparison of CSR Report Indicators(1) Overall indicator score
In 2019, the average CSR indicator score was 48.59 (out of 100), which was 2.21 higher than the previous year and
up by 4.76%. According to the statistics from 2016 to 2019, the score rose by the year, but remained at a fairly low level,
which means the overall level of CSR disclosure has much room to improve.
Overall Indicator Score
48.59

50

46.38
43.71

45

41.52

40
35
2016

2017

2018

2019

By industry, the pharmaceutical industry scored the highest at 53.98 in 2019; the manufacturing industry came insecond at 51.63, with an average annual increase of 7.8%; the production and supply of electricity, heat, gas and waterindustry came in third at 49.69, with an average annual increase of 7.11%; the culture, sports and entertainment industry
scored the lowest at 40.43, but its score grew at an average annual rate of 13.74%.
By industry

2017

2018

2019

Average annual percent change

Finance

46.01

49.17

45.44

-0.36%

Manufacturing

44.43

47.56

51.63

7.80%

Wholesale and Retail

44.32

48.59

47.35

3.54%

Pharmaceutical

/

/

53.98

/

Information Transmission, Software and IT Services

36.65

38.26

47.63

14.44%

Culture, Sports and Entertainment

31.83

31.32

40.43

13.74%

/

/

43.20

/

Environmental Protection and Public Utilities
Real Estate

41.59

44.2

45.82

4.97%

Transportation, Warehousing and Post

44.39

45.71

45.17

0.90%

Production and Supply of Electricity, Heat, Gas and Water

43.37

44.76

49.69

7.11%

By type of business, SOEs scored 48.34 in 2019, 1.34 higher than the previous year; private companies scored48.44, up by 3.44; joint ventures scored 54.71, up by 3.71. The CSR scores for these three types of company all climbed
steadily from 2016 to 2019.
2016-2019 CSR Total Score (by Type of Business)
60
43

45

2016

2017

47

48
39

41

45

48.44

44

47

51

54.71

40

20

0
2018
SOEs

2019

2016

2017
2018
Private Companies

2019

2016

2017
2018
Joint Ventures

2019

By region, except for companies in west China where scores dipped slightly in 2019, companies in other regions
reported rising scores from 2016 to 2019. In 2019, companies in east China scored the highest at 49.6 while those in thenorth east scored the lowest at 42.2. As for the growth rate of the score, companies in northeast China had the highest
rate at 11.05%, followed by central China at 8.37%, east China at 5.53%, and west China at -0.64%.
101

Research on CSR Repotrs of A-share Listed Companies

2016-2019 CSR Total Score (by Region)
60
50

49.6

47

45

43

40

41

46.6

43

47

43

41

46.7
34

40

42.2

38

38

2017

2018

30
20
10
0

2016

2017

2018

2019

2016

East

2017

2018

2019

2016

2017

Central

2018

2019

2016

West

2019

Northeast(2) Indicator score by category
In 2019, the indicator of responsibility for employees had the highest scoring rate at 68.59%, a mild increase from theprevious year. Social responsibility management, social contribution and charity, and diversity and equal opportunities
were the lowest-ranking indicators. The indicator of social contribution and charity recorded the biggest increase inscores with 4.62%. The detailed analysis is as follows:
Indicator Category

2019 Scoring rate

2018 Scoring rate

Difference

Social responsibility management

41.59%

38.49%

Company operations and management

45.44%

44.75%

0.69%

Product quality and innovation

50.95%

49.73%

1.22%

Responsibility for employees

68.59%

67.64%

0.95%

Diversity and equal opportunities

42.73%

41.96%

0.77%

Environmental responsibility

43.95%

40.35%

3.60%

Social contribution and charity

42.27%

37.65%

4.62%

3.10%

In March 2019, the 2019 Report on the Work of the Government was released at the second session of the 13th National
People’s Congress held in Beijing. According to the report, more emphasis would be put on leveraging social forces and thefocus of social governance would be shifted to community level; more effort would be invested into charity and publicwelfare, which would be conducive to the development of social organizations such as disaster relief organizations,education-related public welfare programs, and elderly care institutions, as well as poverty alleviation initiatives.
Preferential policies boosted the performance of A-share listed companies in terms of social contribution and charity
in 2019. By type of business, joint ventures had the highest disclosure rate at 44.72%, followed by SOEs at 44.12%, andprivate companies at 39.63%. By region, East China had the highest rate at 43.29%, followed by West, Central andNortheast China, at 42.24%, 39.68% and 31.41% respectively. By industry, the financial industry reported the highest rate
at 59.23%; the production and supply of electricity, heat, gas and water industry came in second at 49.68%; the culture,
sports and entertainment industry had the lowest at 34.17%.
2017-2019 Scoring Rate of Social Contribution and Charity (by Type of Busienss)
50%
40%

36.64%

41.54%

44.12%

40.63%

39.63%

40.13%

2018

2019

2017

32.27%

38.05%

44.72%

30%
20%
10%
0%
2017

2018
SOEs

2019

2017

Private Companies

2018

2019

Joint Ventures1022021 CEIBS CSR White Paper

2017-2019 Scoring Rate of Social Contribution and Charity (by Region)50%
36.95%

40%

41.52%

43.29%
36.22%

39.68%

42.24%

32.64%

29.31%

30%

41.13%

31.10%

30.90%

31.41%

2017

2018
Northeast

2019

20%
10%
0%
2017

2018
East

2019

2017

2018
Central

2019

2017

2018
West

2019

2019 Scoring Rate of Social Contribution and Charity (by Industry)
49.68%

Production and Supply of Electricity, Heat, Gas and Water
38.87%

Transportation, Warehousing and Post

47.43%

Real Estate
39.95%

Environmental Protection and Public Utilities
Culture, Sports and Entertainment

34.17%

Information Transmission, Software and IT Services

35.15%
43.93%

Pharmaceutical
Wholesale and Retail39.77%

Manufacturing

41.06%
59.23%

Finance
0%

10%

20%

30%

40%

50%

60%

70%

(3) Top 50 with the highest overall indicator scores
Among the top 50 companies with the highest overall scores in 2019 (see the Exhibit), 31 were in the manufacturingindustry, one fewer than 2018; four were in the information transmission industry, three more than the previous year; twowere in the financial industry, down by three from the previous year.
Among the top 50, the number of SOEs remained at 28; the number of private companies increased to 17; threefewer joint ventures made it onto the list.
By region, 39 companies were located in east China, four fewer than the previous year; four were in central China,
doubling that of the previous year; six were in the west, one more than 2018; one was in northeast China, the same as 2017.
2019 Top 50 Companies

60

45
40
28
17

20
5
0

43

36

8

5

39

28

14
9
0

2

4

4

5

6

1

0

1

2017 2018 20192017 2018 20192017 2018 20192017 2018 20192017 2018 20192017 2018 20192017 2018 2019

Joint Ventures

Private Companies

SOEs

East

CentralWest

Northeast

By nature of business

By region

On the whole, the average score of top 50 companies in 2019 was 78.16 (out of 100), significantly higher than theoverall average of 48.59, up by 1.59% from 2018.
103

Research on CSR Repotrs of A-share Listed Companies

Analysis of Economic Value of CSR Reports
The economic value of CSR reports is a major concern for investors in the capital market. This research looked into
this issue by constructing an investment portfolio according to the report information and checking its profitability. To be
specific, the researchers classified companies based on CSR information: buying companies with the highest CSR scoresand selling those with the lowest scores, and then examining the excess returns from this portfolio. The excess return was
defined as the stock’s return in excess of the corresponding market index. For instance, the excess return of an A-sharestock in the Shanghai Stock Exchange is its monthly return minus the Shanghai Composite Index. The accumulative
excess return analyzed in this report is the total excess return during the eight months from May (after the report release)to the end of 2020.
The research examined the economic value according to the overall CSR score, namely the total score of the CSR
indicator system. After dividing the companies into three groups based on their overall scores, the researchers boughtgroups with the highest scores and sold groups with the lowest scores. Given that listed companies had to release their2019 financial reports before May 2020, the researchers calculated the accumulative excess returns in the eight months
between May and December 2020. The result was an annualized return rate of 17.66% (assuming cash dividends are
reinvested). Moreover, this result remained unchanged when the samples were divided into two, five or ten groups.
Specifically speaking, the overall CSR score is composed of seven groups of indicators, including social
responsibility management, company operations and management, product quality and innovation, responsibility for
employees, diversity and equal opportunities, environmental responsibility, and social contribution and charity. The
research found that the arbitrage portfolio can invariably yield positive accumulative returns whichever the indicator isadopted in classifying sample companies. The detailed analysis is as follows:(1) Classification by Social Responsibility Management: This part measures how much a company values social
responsibility by looking into its performance in areas such as education and training, report assurance, and report
inclusiveness. Sound social responsibility management is the prerequisite for the quality of a CSR report. After classifying
the companies by this indicator score, the research found that social responsibility management had an obvious positive
correlation with the accumulative excess return in eight months, and the annualized excess return rate was 19.46%.
(2) Classification by Company Operations and Management: This part includes five indicators: (1) strategiccooperation and sharing, (2) anti-bribery and anti-corruption, (3) business integrity, (4) accounting irregularities, and (5)financing disputes. The comprehensive evaluation of corporate governance paves the way for a company’s further
development. After classifying the companies by this indicator score, the research found the portfolio yielded anannualized excess return of 11.52%.
(3) Classification by Product Quality and Innovation: This part includes quality management, customer satisfaction,patents, R&D expenditure, etc. They have a significant bearing on the company’s economic value because of their criticalrole in helping the company retain customers and acquire competitive advantages. After classifying the companies by thisindicator score, the research found the portfolio yielded an annualized excess return of 18.73%.
(4) Classification by Responsibility for Employees: Responsibility for employees represents the company’s exclusive
investment in employees. Employees constitute a cornerstone for the company’s development. A strong sense of
responsibility for employees will contribute significantly to the company’s development in the long run. After classifying thecompanies by this indicator score, the research found the portfolio yielded an annualized excess return of 5.04%.
(5) Classification by Environmental Responsibility: This part includes environmental benefit, reduction in three types
of waste, circular economy, green office, etc. After classifying the companies by this indicator score, the research foundthe portfolio yielded an annualized excess return of 11.72%.
(6) Classification by Social Contribution and Charity: This part includes donations, charitable activities, contribution toeducation, etc. After classifying the companies by this indicator score, the research found the portfolio yielded anannualized excess return of 11.04%.

1042021 CEIBS CSR White Paper

Appendix: 2019 Top 50 Companies by CSR Report Scores

105

No.

Stock
Code

AbbreviatedCompany Name

No. in theprevious year No.

Stock
Code

AbbreviatedCompany Name

1

600104

SAIC Motor

26001883

No. in theprevious year

726300737

Keshun50+

Yanzhou Coal

50+

27

000725

BOE Technology A

8600196

Fosun Pharma

428600619Highly3

4601088China Shenhua

2429601992

BBMG

50+

5

000002

Vanke A27

30

600019Baosteel

50+

6000039

CIMC

28

31

300103

Dagang Holding Group50+

7601231

USI

21

32

002786

Silver Basis

50+

8600690Haier Smart Home

50+

33

000338Weichai Power30

9600741

Huayu Automotive

50+

34

300296

Leyard50+

10601898China Coal Energy

50+

35

002074

Guoxuan High-Tech

50+

11

002371

NAURA

50+

36

002415

Hikvision

50+

12002202

Goldwind2

37002734Limin Chemical

40

13002773

Kanghong Pharmaceutical

19

38

601727

Shanghai Electric

50+

14

603259WuXi AppTec

50+

39

601288

ABC

50+

15

000063

ZTE

50+

40

601238GAC Group6

16002594

BYD

11

41

000825

STSS

50+

17

600718

Neusoft

50+

42000528

LiuGong50+

18000050 Tianma Microelecctronics A

543002475Luxshare50+

19300760Mindray50+

44

600030

CITIC Securities

50+

20

000858Wuliangye

16

45000708

CITIC Steel

50+

21

000100

TCL Technology

1

46600332

BYS

49

22

600066

Yutong Bus

50+

47

002241

Goertek

50+

23

600660Fuyao Glass

4248000680Shantui

50+

24600500Sinochem International

50+

49

600565

Dima Holdings

50+

25

000021

Kaifa

50+

50

601138Foxconn Industrial Internet

45

Research on CSR Repotrs of A-share Listed Companies

References
1 Wang Wen, Zhang Wenlong. Research on the Sustainable Development of Business: Viewpoint Based on Corporate Social Responsibilities. 2009(9): 154-157.
2 According to the Announcement on Work Concerning the 2008 Annual Statements by Listed Companies published by Shanghai Stock Exchange in December 2008,
mandatory CSR disclosure is required for three types of companies, i.e. sample companies incorporated in the SSE Corporate Governance Index, companies issuing foreign
shares on international boards, and financial companies.
3 Freeman, R. E. Strategic management: A stakeholder approach [M]. Boston: Pitman Publishing Company,1984.
4 Friedman, M. Capitalism and freedom [M]. Chicago: University of Chicago Press, 1962.
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1062021 CEIBS CSR White Paper

AFTERWORD
The uncertainty and volatility brought on by the Covid-19 pandemic has triggered new changes
unseen in a century. It is crucial to delve into how companies cultivate the ability to constantly adapt
to changes emerging in these turbulent times. The word “resilience”, which is frequently mentioned,
has also inspired us to think deeply about companies’ sustainable development.
Considering the reconstruction of the market order and landscape in the new era, companies
will thrive only when they know how to coexist with nature and advance social progress. This raises ahigh bar for their role and responsibility. Business leaders will need to assume more social
responsibility than in any previous era. Since its inception more than 26 years ago, CEIBS, which has
nurtured numerous cohorts of business professionals, has evaluated business success not only on
wealth accumulated, but also on social value created. Based on the positioning statement of “China
Depth, Global Breadth”, the School delivers CSR education that provides alumni with inspiration andintellectual support so that they can make steady and sustained progress.
The 2021 CEIBS Corporate Social Responsibility White Paper is the culmination of the insightsfrom both CEIBS faculty and alumni. This White Paper presents forward-looking perspectives andinsight into tools that will be needed in the future, written and designed by professors from CEIBS. For
example, Prof. Lydia J. Price proposes a “resilience toolkit” aimed at driving management
decision-making and action for business development and industrial progress. This White Paper also
recounts the experiences of CEIBS alumni companies that managed to tap into their respective
expertise and resources to help prevent and fight the epidemic, whilst ensuring continuity ofoperations and production, demonstrating their resilience and responsibility.
This year marks the fourth consecutive year that the School has released a white paper on
corporate social responsibility. We are grateful to the leadership of CEIBS for their unwavering
support and strong encouragement that has made this work possible. We also thank the Case
Center, Alumni Relations Office, Marcom Department, and Translation Department for theirindispensable help during the compilation of this paper.
We are especially indebted to the CEIBS Alumni Association for ardently advocating CSR
concepts and practices, providing a broad array of CEIBS solutions and suggestions, andperforming the responsibility of a business leader. Our thanks also go to alumni companies, such as
JD Logistics, Fosun International, Sanquan Food, and We Serve Hospital for proactively practicing
social responsibility across a spectrum of industries and fields, contributing a wealth of CSR casematerials, and showcasing excellent CSR practices and results.
The release of this White Paper coincides with the month of April and the beginning of spring,
bringing with them the promise of new life, vigor and resilience. I hope that his paper serves as a
fresh departure for deeper cooperation, aimed at leading the way and breaking new ground in thefield of CSR.

Huang Xiayan
Case Researcher, CEIBS Case Center
April 2, 2021

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