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China Europe International Business School Corporate Social Responsibility Report 2018

ShanghaiCorporate Social
Responsibility ReportForeword
In 2018, the world economy became more complex and volatile with increased uncertainties.
China’s economy grew at a slower pace amid structural transformation, but this does notnecessarily mean that businesses have to brace for tough times ahead. Instead, they can
expect to unleash the vitality and impetus to generate more social and economic benefits by

Editorial Board

introducing forward-looking innovations.
Businesses around the world have to begin to embrace inclusive development in order toGuest Editors
Li Mingjun:

Ding Yuan:

survive and thrive in a world driven by increasingly diverse values and rapidly evolving
technologies. CEIBS, as a product of the broader China-EU partnership, has been working to

President, Professor of Management,

promote inclusive development by facilitating economic and cultural exchanges between

Programme Co-Director of Key Talent Programme for Chinese Companies Going Global, CEIBS

China and the world in addition to pursuing academic excellence and imparting business

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

Executive Editor
Chen Jieping: Professor Emeritus, CEIBS

Editorial Board Members

knowledge. Supported by its three mainstay mission components: China depth, global
breadth and social responsibility, the school, in conjunction with its alumni, launched in 2018a Corporate Social Responsibility Action Plan and published its first CSR report, which was
one of the first in summarizing practices and exploring theoretical issues in this area.
This year’s report is now out as planned. It contains a thorough analysis of the developmentswith CSR in China and internationally over the last year, a run-through of the best CSR

Xu Bin:Professor of Economics and Finance, Wu Jinglian Chair in Economics, Associate Dean (Research), CEIBS

Rui Meng:

Professor of Finance and Accounting, Parkland Chair in Finance, Director of Ph.D. Programme,

conducted by CEIBS professors. The report reveals that inclusive development has been

Director of CEIBS Center for Wealth Management, Co-Director of CEIBS Centre for Family Heritage,prioritized by leaders in the manufacturing, services and consumer industries, generating

Programme Director of Family Office Diploma Programme, CEIBS

positive social and economic benefits.

practices implemented by CEIBS alumni-owned businesses, and findings of research

Chen Shimin: Professor of Accounting, Zhu Xiaoming Chair in Accounting, Director of Case Development Centre, CEIBSLu Wenzhen:

Professor of Management, Director of CEIBS Research Centre for Emerging Market Studies, CEIBSChen Shaohui: Professor of Management Practice, Co-Director of CEIBS Centre for Health Care Management and Policy,

Tian Ming:

Jiao Sheng:

in forestation across the world between 2000 and 2017. This impressive contribution could
not have happened without the relentless greening efforts made by countless businesses

Programme Co-Director of Advanced Management Programme, CEIBS

and individuals. As China keeps surprising the world with its advancements, we at CEIBS are

President of CEIBS Alumni Association; Chairman of Landsea Group

more united than ever to serve as a force for good, helping businesses navigate their future(CEIBS EMBA 2005)

through uncertainties.

Executive Council Member and Director of the CSR Committee, CEIBS Alumni Association;

Dr. Li Mingjun

Dr. Ding Yuan

President,
Professor of Management,
Programme Co-Director of Key Talent
Programme for Chinese Companies
Going Global,
CEIBS

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

Chairman of Jiangsu Hanjin Group Co., Ltd.
(CEIBS EMBA 2008)
Li Wen:According to the latest research in 2019, China was responsible for a quarter of the increase

Executive Council Member and Co-Director of the CSR Committee, CEIBS Alumni Association;
Chairman of China Universal Asset Management Company Co., Ltd.
(CEIBS EMBA 2010)

This report is produced by China Europe International Business School and its Alumni Association.

CONTENTS

01
02
03

CSR Trends Across the World:
A Time for Bold Action

CSR in China:
Practices, Lessons and Way Forward

CSR Practices of
CEIBS Alumni Companies• Poten Enviro: Promoting Corporate Ambition andSocial Impact Through CSR Practices• CHERVON: Building Better Tools to Help Builda Better World• Jianye Group: A Corporate to the Society is Likea Tree to the Earth• First Respond®: Sparking Universal Mutual Aidin Emergencies• Essilor: Helping Needy Children with Poor Visionin China’s Mountain Areas See the World Clearly• CEDAR Charity: Making Public Welfare a Strong
Force for Good

04
05

CEIBS CSR Research• Selection of Published Papers• Research Projects in Progress

Research on CSR Reportsof A-Share Listed Companies

CSR Trends
Across the WorldCSR Trends Across the World:
A Time for Bold Action
Lydia J. Price, Professor of Marketing, CEIBS
Laurie Underwood, Professor of Management, Xian Jiaotong Liverpool University
Zhao Yongqing, CEIBS MBA Alumnus
From controlling climate change to managing waste and ensuring economic inclusivity, today’s mostpressing “corporate social responsibility” issues are systems-level, global challenges. Knowledgeable
NGOs, governments, and even nations have long realized that no single entity can solve issues of suchmagnitude and complexity by working in isolation. What’s new in recent years is a rapid growth in thenumber of companies leveraging opportunities to collaborate with public entities in bringing innovativeideas and solutions to market. To facilitate that work, others are mobilizing finances, collecting anddisseminating useful data about supply chains, and coaching a new generation of leaders.
In this chapter, we have compiled examples of pioneering initiatives illustrating what promises to be a
massive reconfiguration of the global economy as companies come to grips with new social expectations
and demands. We have organized these cases to illustrate five major trends that capture the spirit of thisbudding evolutionary change, and thus warrant close consideration by business executives in China andabroad.

Collaboration on
Systems-level Solutions

Disruptive
Innovation

Mobilizing
Finances

Boosting Supply
Chain Transparency

Leadership
Engagement

CSR Trends Across the World · CEIBS CSR Report 2018｜003

TREND #1:
Collaboration on Systems-level Solutions

TREND #2:
Disruptive Innovation

A decade of rigorous research has shifted conversations about what constitutes responsible

Circular Economy

business behavior away from the moral and emotional arguments that characterized yesteryear

The second trend we see emerging from the new face of corporate social responsibility is aand toward more rational assessments of what is needed to fix problems. Nowhere is thisrise in innovations designed to break away from business-as-usual. One of the most innova-

more visible than in the efforts to mitigate and manage climate change. Scientific evidence

tive methods for addressing waste management, for example, is the Circular Economy (CE).

amassed by the United Nation’s Intergovernmental Panel on Climate Change (UN IPCC) was

The basic idea of CE is to entirely eliminate waste by designing and managing closed loop

analyzed by a consortium of non-profit organizations to establish science-based targets thatsystems of materials and components that flow into production systems, on to customer

indicate the reductions in greenhouse gas (GHG) emissions needed by individual countries

usage as finished products, and then back into input streams as refurbished components orand industrial sectors to meet the goal of capping global temperature increases at 2 degrees,

recycled and composted materials for new products and usages. Companies are innovating

and more ambitiously, at 1.5 degrees. This has prompted more and more companies to

products, processes and business models in a drive to put this concept into practice. Experi-

establish their own science-based targets for individual GHG commitments as a function ofments in “product-as-a-service” (PaaS) are a case in point.

proportionate contributions to an overall industry baseline.

In February 2019, for example, IKEA announced a ‘lease not own’ program for office furniture

Delivering on these newly ambitious targets requires collaboration, given that major shifts inin Switzerland as part of its “wider ambition to become a fully circular business by 2030.” To

supply chains and operations are typically required. Energy intensive western IT companies

implement a PaaS business model innovation like this, IKEA will have to redesign its furniture

like Google, for example, must quickly adopt renewable energy to contribute what’s considered

as composites of durable modular components (i.e. table legs and pillows) that will hold up

to be adequate reductions for their industry. Limited renewable energy supplies would haveunder long cycles of repeated refurbishment and reuse, in additional to using uncontaminatedprevented them, in earlier years, from actively pursuing that goal. The supply gap reflected abiological materials such as natural wooden table tops that can be safely returned to nature.

chicken-and-egg problem common to new markets: in this case, utilities refrained from

These changes to IKEA’s design, production and selling functions will trigger corresponding

increasing renewable energy supply because of demand uncertainties, while corporatechanges in its financial systems as cash flows and assets are adjusted to meet the newbuyers held back from signing renewable energy purchase contracts because of supply

business model. Companies entering the CE realm must rethink all aspects of their businessuncertainties. A solution emerged when two NGOs (The Climate Group and CPC) and a hostprocesses—from purchasing to distribution, to reverse logistics, storage and refurbishing—of business partners committed to collaboratively forming a renewable energy market. The

in an effort to attain zero-waste operations.

resulting initiative, titled RE100, aimed to commit 100+ companies to powering their operations
with 100% renewable energy and also to add renewable energy capacity to the grid by installing

IKEA is part of another global collaboration called CE100, launched by England-based Ellen

their own solar panels or via other energy producing technologies. This collaborative action

MacArthur Foundation. CE100 members include not only companies but also cities (includ-

provided the scale to unlock a broader surge in renewable energy production capacity.

ing Toronto and London) working to make the conceptual CE model work. CE100 offers
members “a pre-competitive space to advance individual agendas through collective

RE100 now has 166 members, including many with operations in China. As of March 2019,

approaches,” thus fostering a platform for shared learning and exploration.

20+ RE100 member companies successfully shifted to 100% renewable power usage. Now
in its 5th year, RE100 has expanded from the US and Europe to rollout in India and China. To
date, two Chinese companies have joined, Elion and Broad Group—so far converting 25% of
their combined energy usage to RE. Other power purchase agreements are now proliferating in
Science-based targets, see
https://sciencebasedtargets.org/.
RE100—RE100 is “a collaborative, global initiative uniting
more than 100 influential businesses committed to 100%
renewable electricity.” Members companies seek to “massively increase demand for-anddelivery of-renewable energy.”
http://there100.org/companies.

Western markets, including some designed to allow smaller companies to purchase renewable energy in partnership with larger regional partners. The ultimate result of all this collaboration is to push renewable energy prices down as the industry scales. In a virtuous cycle,
this further accelerates renewable energy adoptions and begins a fresh round of infrastructure investment.
RE100 is emblematic of a new spirit of cooperation among NGOs, utility service providers,and business—and among businesses themselves. There is a growing acceptance that
ecosystem members need one another to move forward. There is also an understanding that
we, as a system, created these global problems, and now we, as a system, need to solve them.

004｜CEIBS CSR Report 2018 · CSR Trends Across the World

CE100—Members of the CE100 network, developed by
EMF, commit to developing“scalable circular business initiatives and to address challenges to implementing them.”
https://www.ellenmacarthurfo
undation.org/our-work/activiti
es/ce100.
Ellen MacArthur Foundation—Respected as the world’s
most authoritative experts on
CE, the EMF “works with business, government and academia to build a framework foran economy that is restorativeand regenerative by design.”
https://www.ellenmacarthurfo
undation.org/circular-economy/concept.

CSR Trends Across the World · CEIBS CSR Report 2018｜005

TREND #3:
Mobilizing Finances
The shift to a clean and inclusive economy requires the mobilization of huge financial
reserves to support innovation, infrastructure development, and business restructuring. Until
recently, professional financial institutions have been slow to respond to this market needdue to the complexities of linking sustainability to financial performance, and the inconvenient truth that sustainability investments can take a long time to generate returns. All that isnow changing as two different phenomena gather steam in the West. First, investors aredemanding better disclosure about how companies are managing the inherent risks andopportunities of the emerging economic transformation, and second, banks and financial
service firms are setting ambitious sustainability targets for themselves based on a sense of
purpose and opportunity.
A telling indicator of this new mindset in the financial community is the highly influential Letterto CEOs issued annually by BlackRock’s CEO Larry Fink. BlackRock is one of the world’s
largest asset management companies, and Fink has issued a call-to-action to CEOs of

Social Enterpriseportfolio companies to personally ensure that their long-term company strategies address
key societal challenges. His 2018 letter warned, “In the $1.7 trillion in active funds weAn innovative business model altering the way that social services are delivered to the market

manage, BlackRock can choose to sell the securities of a company if we are doubtful about

is the Social Enterprise (SE)—a hybrid of for-profit and non-profit business practices thatits strategic direction or long-term growth.” In the same letter, he names climate change, fair

offers a distinct alternative to traditional CSR approaches as well as to charities and NGOs.

wages and the impact of automation on employment as issues that companies must address

Whereas traditional corporate CSR programs donate financial and human resources to charitabledirectly.

organizations and other NGOs that work on problems like poverty alleviation and inclusivity,
SEs use market means to cultivate their own revenue streams to support their social

Excerpts from BlackRock’s Annual CEO Letter to CEOs1

missions, and in so doing attain self-sufficiency and sustainability.

(A) company’s ability to manage environmental, social, and governance mattersdemonstrates the leadership and good governance that is so essential to sustainable growth, which is why we are increasingly integrating these issues into ourinvestment process.

The competing demands for both financial and social returns within a single organization
make SE a difficult model to practice, but when it works it can generate highly innovative andeffective solutions. One successful example based in China and founded by CEIBS alumni isFirst Respond®. Launched in order to save lives by training a large number of volunteers in

Companies must ask themselves: What role do we play in the community? How
are we managing our impact on the environment? Are we working to create adiverse workforce? Are we adapting to technological change? Are we providing
the retraining and opportunities that our employees and our business will need toadjust to an increasingly automated world? …

the skills of emergency cardiac first aid, First Respond® supplies trained volunteers tolarge-scale public marathons and other athletic events. Revenues are earned by selling AED
First Respond®—China-based
Social Enterprise establishedto provide first aid equipment
and training to corporates,
thus funding efforts to supply
public marathons and othere v e n t s w i t h f re e fi r s t a i d
support. www.sos919.com.cn.
Aravind Eye Care Hospital—Now operates 20+ hospitals across India under a SE
business model. www.aravind.
org.

first-aid equipment to be used in business offices, and also training staff to use it in emergency
situations. Another successful SE based in India is Aravind Eye Hospital. Aravind began withthe social purpose of “eliminating needless blindness” by providing eye surgery to poor

The statement of long-term strategy is essential to understanding a company’s
actions and policies, its preparation for potential challenges, and the context ofits shorter-term decisions. Your company’s strategy must articulate a path toachieve financial performance. To sustain that performance, however, you mustalso understand the societal impact of your business as well as the ways thatbroad, structural trends—from slow wage growth to rising automation to climatechange—affect your potential for growth….

patients in India. As the number of surgeries increased, the organization gained a solid
reputation with the general public for their proven surgical expertise. The hospital then leveraged
their excellent reputation to become the public’s preferred clinic for eye surgery. Next, they
began to serve wealthy clients at market rates, generating a profit stream to fund the surgeries
for low-income clients. This model turns traditional charity upside down because the social
purpose work-stream creates the market competencies and the attendant possibility togenerate revenue streams that ensure the business self-sufficiency.

1006｜CEIBS CSR Report 2018 · CSR Trends Across the World

https://www.blackrock.com/corporate/investor-relations/2018-larry-fink-ceo-letter.

CSR Trends Across the World · CEIBS CSR Report 2018｜007

Fink’s comments reflect a growing sense among investors and creditors that future financial
success of a business will depend strongly on management’s ability to understand and

One company to learn from is Apple. Not only has Apple joined the RE100 and committed tohandle Environmental, Social and Governance (ESG) risks. A recent report by the Taskforce

transitioning to 100% renewable energy in direct operations, it is now helping its suppliers to

for Climate-related Financial Disclosures (TCFD) casts doubt on the extent to which climate

make the same transition. Apple initiated a program in 2015 to help suppliers cut energy use

risks are currently understood and reported to investors. While experts estimate the total

by conducting audits, then working out schemes to improve energy efficiency. During 2017financial risk of climate change to be trillions or even tens of trillions of dollars in additionaland 2018, the company partnered with 48 suppliers to initiate energy improvements resulting

costs to the global economy—due to supply chain disruptions, infrastructure developmentin cuts of CO2 equivalent by 320k metric tons yearly. The program is self-sustaining because

needs, worker illnesses and displacements, etc.—the cumulative financial risks reported by

the energy savings quickly repay the initial investment. So far, the program has resulted incompanies in their sustainability, financial and CSR reports amounts to only a fraction of that.

US$44.8 million in annual energy savings. Apple expects this supplier program to generate

TCFD is now calling for companies to practice scenario analysis in order to adjust theirmore than 4 gigawatts of new clean power worldwide by 2020, allowing the company to cut

expectations to the new realities.

its current carbon footprint from manufacturing by one third.

Credit rating agencies including Moody’s are also deepening their scrutiny of company

Chinese company Ant Financial is innovating its own way of mobilizing capital for climate

reports to ensure that ESG factors are accurately addressed. When transparency is lacking

change. The popular Ant Forest app invites users to input personal sustainability goals suchor strategies are outdated, a company’s individual credit rating will fall. As Moody’s explains:

as walking to work, paying bills online, or travelling by public transport. Each time the user“[Our] objective is not to capture all considerations that may be labeled green, sustainable orcompletes a low-carbon activity, the app provides “green energy” for a virtual sapling. Whenethical, but rather those that have a material impact on credit quality.” Particularly useful isa user has raised a sapling to a fully-grown tree, AF plants an actual tree as part of a collabo-

Moody’s report outlining 23 ESG factors that influence ratings including climate change andair/water/physical pollution, human rights and health & safety, and audit practices and transparency/disclosure. Moody’s is now developing heat maps with traffic-signal color-coding toreveal the best and worst prepared companies in specific industry verticals. What emerges
is a new view of credit worthiness that factors in the principles of “clean and inclusive
society”. This reporting and credit scoring trend creates a “virtuous cycle” in which companies that commit to ESG goals, innovate to find new ways of meeting their targets, and transparently report on their progress are not only boosting internal capabilities, but are also
improving their access to, and lowering their costs of, capital.
Traditional banks are playing a role in fueling this trend by dedicating funds to support
TCFD—Since 2017, the Taskforce for Climate-related Financial Disclosures’ guidelines
for financial disclosures on
climate have become the accepted standard for businesses.
https://www.fsb-tcfd.org.
Moody’s ESG credit ratings—The 2017 report “Moody’s
approach to assessing ESG incredit analysis” is now wellrespected as a resource forbusinesses supporting key social issues. https://www.mood
ys.com/researchdocumentcon
tentpage.aspx?docid=PBC_1
089067.
ING—ING issues both Green
Loans and Sustainability Improvement Loans. Both makefinancing available to small
companies.

Large companies are also offering financial support to smaller members of their value chains.

company transitions. Though green bonds have been issued for many years to finance large
clean infrastructure projects, banks are now beginning to offer green loans to smaller
businesses that want to improve their environmental, social and governance capabilities.
Dutch bank ING, for example, has called on its clients to commit to sustainable practices.
The company website states “If ING is to thrive in the future, we don’t only need to manage
our own direct and indirect impact—we also need to help our clients address the risks andopportunities that environmental challenges create.” The bank lists “What we do finance”(i.e., projects promoting renewable energy, energy efficiency in buildings, e-vehicles,
bio-based plastics, and CE initiatives) and “What we do not finance.” Here, they state: “Weapply strict social, ethical and environmental criteria in our financing and investment policies
and practices. … We say ‘no’ to certain companies and sectors.” For example, ING claims tobe the first bank to publicly commit to cease investing in coal power generation (by 2025).
Taking a step further, the bank last year established a €100m Sustainable Investments fundto “help start-ups and innovative new business models scale up concepts and projects
tailored for energy, water and resource efficiency.” In addition, ING has pledged to double its
total Climate Finance portfolio from 2017 to 2022, and in 2018 it established a $600 billion
green investment portfolio.

008｜CEIBS CSR Report 2018 · CSR Trends Across the WorldApple—Efforts to assist thecompany’s suppliers in adopting low-carbon operations hasbrought energy efficiencies thatpay for the initial cost outlay.
The program is expected to
cut the company’s overall carbon footprint from manufacturing by 33% by 2020. https://www.apple.com/environment/.
Ant Forest—As of mid 2018,
350 million Chinese users wereactive on this app, leading to
the planting of 55 million trees.
By 2022, Ant Forest plans toplant 500 million trees. Chinese
article: https://baijiahao.baidu.
com/s?id=160897072968950
0812&wfr=spider&for=pc.
English article: https://pandaily.com/ant-forest-to-invest-79
m-over-next-5-years-to-plant500m-trees/.

rative reforestation program (mainly in a deforested region of Inner Mongolia). Though financial performance information is not publically available for this initiative, the campaign has
obvious advantages for lowering the costs of Ant Financial’s customer and data acquisitionin an increasingly competitive and crowded digital marketplace.
Mi Charity presents a variation on the crowd-based model of funding ESG initiatives. Also
based in China, this social enterprise in 2012 issued a mobile phone app that allows users to
track different categories of personal good works (number of steps walked daily, getting up
early). When certain targets are achieved, the app initiates a donation from one of 1000 sponsor companies on the user’s behalf to a linked charity. To date, the app has attracted 4
million users and has triggered donations of RMB50 million to China-based charities. Meanwhile, JD.com (China’s largest retailer, founded by a CEIBS alumnus) sponsored the first useof blockchain technology for tracking charitable donations in China. Cooperating with Teachfor China in September 2017, JD.com used blockchain technology to collect, integrate,
record and display information about donations, building more trust into the process fordonors. The approach ensures that the whole donation process is traceable and free fromtampering.

Mi Charity—China-based SE
offering an app for users to
track personal good deeds via
mobile phone, then convert
points gained per deed totrigger donations from sponsor
companies to chosen charities.
https://www.ricedonate.com.
JD.com’s blockchain platform to support charities—Jingdong’s blockchain-based platform allows the public totrace charity donations in China,
adding transparency and easefor those making donations.
https://jdcorporateblog.com/jd-launches-blockchain-openplatform/.

CSR Trends Across the World · CEIBS CSR Report 2018｜009

TREND #4:
Boosting Supply Chain Transparency

TREND #5:
Leadership Engagement

One theme running throughout the first three trends we have identified is a growing need for

The final trend we identified as impacting CSR worldwide—as well as in China—has to dohigh quality data to support key decision-makers. Corporate leaders, innovators, investors,

with the top leadership of companies. The vast scope and scale of changes underway, theand creditors can move markets on the basis of their professional decisions. Global purchasing

creativity and innovation required, and the rigorous data-collection and data-sharing

managers can as well. While scientists amass climate change statistics, CE pioneers trackneeded, add up to a clear need for new models of leadership regarding social challenges—

material flows, and credit agencies gather deeper and more strategically meaningful ESG

including new positions emerging within the C-suite.

reports, supply chain consortia and third party agencies are working to increase the granularity

It is promising to see more companies appointing a Chief Sustainability Officer (CSO) toand relevance of data that tracks the major industrial supply chains.

address the high expectations and demands of modern customers, suppliers, regulators,

Supply chain audits are not a new phenomenon but digitizing and layering that data withinvestors and millennial employees in terms of addressing the pressing issues we have been

third-party information, then putting it all on the cloud for easy access, is nothing short of a

discussing. Corporate executive teams increasingly recognize the need for officially appointed

digital revolution. SupplyShift is an AI-enabled platform that connects data from audits,

CSOs to truly and professionally blend CSR seamlessly with mainstream company operations

supply contracts and mobile phone interviews of contract workers to enable end-to-end

and strategies. In fact, global executive search firm Heidrick & Struggles has recently issued

visibility of labor and human rights issues in global supply chains. Working with partners who

a report on the topic, commenting that “Today, in companies that understand the crucial role

specialize in gathering and interpreting the individual data streams, SupplyShift works tothat EHS performance will increasingly play in overall company performance, the function ismake the aggregate data useful. Clients can search the platform according to supplier tiers

no longer regarded as a cost center but as a strategic asset, or, if poorly managed, a liability.

(first-level, second level, etc.), geographic region, industry, or other dimensions of their

In these companies the CSO no longer reports into Legal or Human Resources but directly

choosing. Members of SupplyShift’s network will work with buyers to dig deeper into theirto the CEO…”

own supply-chain networks and to find partners who can help to design and implement
SupplyShift—a responsive platform to seamlessly gather
and analyze a supplier network.
Allows users, via an intuitive
interface, to establish dashboards used to make informed
decisions regarding supply
chains. https://www.supplyshi
ft.net/.
Walmart’s Sustainability Index—This Index based on data
ranking sustainability practices among the company’s
suppliers gives a rating toindividual suppliers. Those withlow scores must improve.
https://www.walmartsustaina
bilityhub.com/sustainability-index.
The Sustainability Consortium
is a global coalition formed to
improve sustainable practices
suppliers. The China branch
opened in 2013. www.sustain
abilityconsortium.org.
Blockchain Food Safety Alliance in China—Formed byWalmart, IBM and JD.com
plus Tsinghua Universtiy, topromote food safety via blockchain technology. A.k.a in Chinaas the “green supply chain”.
https://www-03.ibm.com/press/us/en/pressrelease/53487.
wss.

As an alternative, some companies appoint Board members with deep technical and practicalsolutions for any trouble spots.

understanding of the toughest CSR challenges and the latest CSR innovations. The important

Walmart’s Sustainability Index is widely known to China’s manufacturers. In 2005, thepoint is this: Given the scope of today’s challenges, and the urgency with which they must

massive retailer promised consumers to “sell products that sustain people and the environment.”

be addressed, CSR can no longer remain a trivialized side project handled by the HR and PR

Four years later, they announced a Sustainability Index to “establish baselines and track

departments.

progress against that goal.” Today, the index ranks individual suppliers on a range ofWe also see a rising call to identify and cultivate the new skills required to lead in a VUCA

sustainable practices, relative to benchmark norms. For sub-par suppliers, Walmart creates aworld. The term “VUCA”, which originated in the military, is an acronym taken from the words

timetable and plan for improvement. The initiative is another collaborative effort of business

Volatile, Uncertain, Complex and Ambiguous. The term offers a fitting description of theand non-profits. Walmart Foundation has also issued multiple grants to The Sustainability

situation business leaders see when they look beyond the walls of the factory or HQ building

Consortium (TSC) to open its offices in China (starting in 2013). This global coalition formed

to a world challenged by poverty, climate change, inequity and job-displacing technologicalto help suppliers transition toward sustainability is now active across China. Like SupplyShift,changes. Each of these problems brings immeasurable business risk but also vast opportunities

TSC leverages new technologies to compile data that verifies supplier self-audits. Drones

for innovative growth. Each is poorly understood and in need of urgent change.

and satellite images can be used to identify hot spots of deforestation, for example, leaving
little room for low-tier suppliers to hide. TSC has focused its work in past years on collecting

The preceding trends give us insight on what is needed from today’s business leaders

high-quality data, and now is working hard to improve the information’s decision relevance.

regarding CSR: the ability to understand systems and ecosystems while simultaneously

5G, cloud and AI technologies will certainly fuel the progress of such initiatives going forward.
Blockchain is another technology with enormous potential to boost supply-chain transparency.
There are hopes that blockchain will eventually make supply chains totally visible to anyone
by simply scanning a barcode or QR code at the warehouse or the point of purchase. In thearena of food safety, a coalition of Walmart, IBM and JD.com joined with China’s Tsinghua
University National Engineering Laboratory for E-Commerce Technologies in 2017 to launcha Blockchain Food Safety Alliance. The four partners pledged to “work together to create astandards-based method of collecting data about the origin, safety and authenticity of food,using blockchain technology to provide real-time traceability throughout the supply chain.”
Their goal is to “…encourage accountability and give suppliers, regulators and consumers
greater insight and transparency into how food is handled, from the farm to consumers. ”

010｜CEIBS CSR Report 2018 · CSR Trends Across the World

mastering the nuances of a complex organization; the ability to make fast decisions despite
SDG Compass—Practical guide (created by WBCSD, GRI& UN) offering a roadmap forcompanies contributing to
SDGs. https://sdgcompass.or
g/sdgs.
CBCSD—China Business Council for Sustainable Development is a coalition of Chineseand foreign enterprises operating in China to facilitate sustainable businesses. http://eng
lish.cbcsd.org.cn/projects_and_initiatives/CSR/index.shtml.

uncertainty and then quickly change course when initial solutions prove to be wrong; theability to understand and empathize with diverse stakeholders while meeting the stringent
demands of financial investors. Terms such as “ambidexterity” “agility” and “responsibility”
abound in the current leadership literature.
A number of effective resources exist to assist business leaders in their challenges. One of
the most respected, the World Business Council for Sustainable Development (WBCSD)
serves as a useful bridge between public policy makers, NGOs and executives. They’ve
recently worked to adapt and translate the UN’s country-level Sustainable Development Goals(SDGs), for example, into manageable action points for individual companies. In China, the
CBCSD takes on similar role domestically.

CSR Trends Across the World · CEIBS CSR Report 2018｜011

As business leaders embark on this journey, business schools will join them—collaborating
on research, teaching and new knowledge dissemination as new pathways emerge. We are
fortunate, at CEIBS, to benefit from the strong support of our alumni and sponsoring
partners in terms of funding and participating in research projects, sharing experiences withstudents and fellow alumni, and telling their successes and failures to our case writers.
In 2018, CEIBS professors launched 9 new CSR research projects with financial support
from the alumni supported CEIBS Corporate Social Responsibility Research Fund. We also
entered a collaborative agreement with Mars Catalyst group to develop research and teaching
about business mutuality—a process of balancing financial, natural, human and social
capitals to support the healthy growth of businesses and economies. These are early moves
in what we anticipate to be a long journey of discovery and rebirth that will move management
practice into the next century. What better place to do that than at CEIBS?

China’s Complementary Top-Down Approach
The cases in this article describe bottom-up collaborations that are moving CSR into
new territory on a global scale. We would be remiss if we neglected to mention thecomplementary role of China’s top-down government initiatives in driving massive
domestic change.

Ambitious targets for tackling China’s major developmental

challenges are delivered in successive Five Year Plans (FYP). From eradicating poverty
to eliminating pollution and building an economy powered by innovation, China’s FYP’s
assure continuous progress while maintaining a stable economy and society.
Recent efforts by China’s e-commerce giants to connect rural villages to the digital
economy are a unique Chinese version of the collaborations we discuss in Trend 1.
Circular industrial parks, Smart Cities, and Sponge Cities are large-scale focusedexperiments to develop the CE model presented in Trend 2 while reinforcing Chinese
strengths in new technologies. New CSR reporting guidelines of the Shanghai and
Shenzhen stock exchanges are a first step toward ESG transparency as noted in Trend
3, though more work is needed to make that mechanism truly effective. Finally, thework of a restructured and reinvigorated Ministry of Ecology and Environment is bringing not only transparency, but actual change to the less efficient, more polluting sectorsof China’s supply chain and manufacturing base.
China’s business leaders are responding to these changes in various ways. More andmore seek education on ESG reporting and transparency following widely used
standards developed by ISO (Internationals Standards Organization), GRI (Global
Reporting Initiative), and CASS (Chinese Academy of Social Sciences). While some arerelocating operations to less developed economies in Southeast Asia as a way toescape the higher costs and stringent standards of a more advanced society, others
are embracing these challenges by moving up the value chain to develop brands andreputations that allow them to recover costs from higher market prices. A key strengthof Chinese leaders is their flexibility and adaptability. As noted in Trend 5, this is a key
aspect of leadership in a VUCA world. Hence, we fully expect to see China playing anactive role as the new market realities emerge from these trends.

012｜CEIBS CSR Report 2018 · CSR Trends Across the WorldCSR in China

CSR in China:
Practices, Lessons and Way Forward
Chen Jieping, Professor Emeritus, CEIBS
Huang Xiayan, Dean’s Office, CEIBSEnterprises are like the cells of an economy and their growth is impossible without the support of thecommunity and country in which they do business. When they grow and prosper, businesses have a
responsibility to give back to the community and country that host them. Last year, we provided in the2017 report an overview of CSR practices such as pollution prevention and control, targeted poverty
alleviation, responsible investment and social responsibility reporting and disclosure, as a reference andsource of inspiration for CEIBS alumni and the general public. This year, we are producing an updated
version which contains new CSR developments in China’s business community in 2018 with a focus on
current issues such as economic and legal responsibilities, supply chain partner responsibilities, Internet
platform responsibilities, web-based charity and green finance.

Economic andLegal Responsibilities

Supply Chain
Responsibility
Management

Internet Platforms
Responsibilities

Internet-based
Charity

Green Finance

CSR in China · CEIBS CSR Report 2018｜015

2018 marked the 40th anniversary of China’s reform and opening up to international markets andthe first year of China’s implementation of the social and economic road map presented by the
19th CPC National Congress. In his report delivered at the Congress, President Xi noted that

Economic and Legal Responsibilities:
Recognized and Performedsocialism with Chinese characteristics had entered into a new era based on realities on the
ground relative to envisioned development stages. He underlined the need to build a credible

In his report delivered at the 19th CPC National Congress, President Xi underlined the importance of cultivating

society, institutionalize volunteer services, and develop an awareness of social responsibilities,

world-class enterprises with global competitiveness. To join the ranks of the world’s best, Chinese businesses

and give back to society. Businesses have to live up to new social responsibilities of the new era.

not only need to improve their technological use, managerial prowess, and core competitiveness but also haveto shoulder greater social responsibilities. Economic and legal responsibilities are essential duties thatIn 2018, China cemented its second place in world economic rankings with a GDP in excess ofbusinesses have to fulfill; failure to perform these duties will spell disaster for a business.

RMB 90 trillion. Apart from the stellar economic achievements, China’s efforts in poverty alleviation, rural revitalization and energy conservation, and emission reduction have also made headlines. On January 1, 2018, the Environmental Protection Tax Law of the People’s Republic ofSafeguarding shareholder and employee interests

China went into effect, making environmental protection tax the first green tax ever introduced

Safeguarding the interests of shareholders and investors is one of the most basic social responsibilities of enterprises

in China. The State Council issued the Opinions on Comprehensively Strengthening EcologicalProtection and Resolutely Pushing Ahead with Pollution Prevention and Control by the StateCouncil which required that enterprises below environmental standards take measures tocomply or face forced closures. Industrial Bank also published the “Green Producers’ Index” tosupport the growth of green finance and other green industries. Furthermore, The State Council
issued the Opinions on the Three-Year Action Plan for Poverty Alleviation which sets out
measures to involve businesses in the fight against poverty.
Today, as an increasing number of Chinese businesses invest overseas, they also need to fulfill
their social responsibilities in the respective host countries in order to achieve sustainable deve-

and paying out dividends is a basic way for listed companies of doing so. Between November 1, 2017 and October
31, 2018, a significant increase from 2017 incurred as a total of 2,776 listed companies in the A-share market paid
RMB 94.32 billion worth of cash dividends.1 Not only so, no business can grow without the hard work of its employees. In this sense, an enterprise’s primary responsibility is to protect the health and benefits of its employees. Gree
has been exemplary in this regard. In 2018, the company made an across-the-board pay increase of 1,000 yuan, andprovided each of its employees with free housing in the talent apartment buildings it had constructed with its funds.
In early 2019, Gree offered another pay rise. In the future, the company will continue to give employees pay rises as
its finances allow.

lopment. In April 2018, the Chinese government established the China International Development

Providing safe and quality products

Cooperation Agency; thus marking the formal creation of a responsibility performance mechanism

Providing safe and reliable products and services is an essential driver of competition and the right way to reward

for China’s foreign aid. At the Forum on China-Africa Cooperation, the Chinese government

customers and society for their trust. Take Beilu Pharmaceutical as an example. At its inception, the company built anpledged to support Chinese companies in Africa to forge an alliance of corporate social responsi-

effective quality assurance system on the conviction that product quality and safety can mean life or death for ability. The National Development and Reform Commission, in conjunction with six other ministries,

company. The quality of its pharmaceutical products helped it secure the “Distinguished Corporate Social Responsi-

published the Guidelines for Businesses Operating Overseas on Compliance Management tobility Award” at China’s first CSR assessment for pharmaceutical companies. In contrast, Changsheng Biotech was

help Chinese investors build stable and sustainable operations in international markets. Thesecaught falsifying data in the production of rabies vaccines in 2018, causing national outrage. By violating its legal

policies have ushered in a new era for Chinese businesses in terms of performing CSRs overseas.

responsibilities and moral obligations, Changsheng became the first company to be delisted, providing a cautionary
tale of the failure to duly perform social responsibilities.

In the new era, the responsibilities put on Chinese businesses have evolved as well, witheconomic and legal ones being the most fundamental. In 2018, Chinese businesses did

Operating in compliance with regulations

a commendable job safeguarding shareholder interests and caring for their employees.

Operating in compliance with regulations is a prerequisite for achieving healthy development, and flourishing in an

They are increasingly requiring contractors in their supply chains and other partners toeconomically globalized world. In recent years, as the international community and governments across the world are

perform CSRs as well, thereby strengthening CSR management through responsible

increasingly committed to establishing and maintaining an open, transparent and fair social order, Chinese businesses

sourcing and green supply chain management. The rapid development of internet-based

must ensure regulatory compliance in order to expand their influence across domestic and overseas markets. In 2018,businesses has presented new challenges to CSR management. On the other hand, theZTE’s humiliation at the hands of the US laid bare China’s dependency on the US for chips, as well as the vulnerability

internet has been a boon for charity causes, as it allows the general public to participate

of Chinese businesses in business dealings through poor compliance with international conventions, laws andin the spread of love. Internet-based charities are developing in a healthy and orderly

business codes. As China’s largest telecommunications company, ZTE provides job opportunities for its 80,000

manner through self-discipline and supervision. Green finance encourages the private

employees, thousands of supply chain business partners, and their hundreds of thousands of employees. Throughsector to invest in green industries, providing new impetus to CSR performance.

breach of business rules, it put its own prospects and of its employees, partners and even that of the whole industry

Additionally, government authorities and industry associations have issued CSR reports

in great jeopardy.

to guide corporate social responsibility practices.
1016｜CEIBS CSR Report 2018 · CSR in China

Hu Wei. Annual Report on Dividend Payout by A-share Listed Companies 2018. February 2, 2019. http://www.sohu.com/a/292944234_481741.

CSR in China · CEIBS CSR Report 2018｜017

Supply Chain Responsibility Management:
Expanding CSR Boundaries to Include Supply Chain Partners

Internet Platforms:
With Great Power Comes Great Responsibility

Incorporating supply chain partners in its CSR management system is essential for a company to ensure

In a digital, networked and intelligent world, information and communication technologies are increasingly

sustainable development of its supply chain. The International Guidelines on Social responsibility ISO26000

more integrated in various social and economic activities. This makes life and consumption much easier for theand the national social responsibility standard GB/T3600 contain clear requirements for supply chain responsi-

general public. While the boom of an “Internet +” entrepreneurial climate and the rapid development ofbility management. In fulfilling their social responsibilities, businesses are increasingly enforcing complianceInternet-based companies have generated significant economic and social benefits, they also shine a light onamongst supply chain partners as well. The scope of CSR management has gradually expanded to include

many new social responsibility problems.

supply chain management; businesses are strengthening their supply chain CSR management and promoting
healthy industrial growth by implementing responsible procurement and green supply chain programs.

Establishing responsible procurement mechanisms

Urgent need to strengthen information security
Our life has been made much easier thanks to advances in internet and big data technologies, rapid growth of mobile
payment and O2O services, and the rise of share economy and e-commerce. The massive amount of information andResponsible procurement requires businesses to fully integrate the concept of social responsibility in the procurement

data generated by users are a vital strategy resource for internet-based businesses, especially application service

process and to ensure that products and services are purchased in compliance with ethical norms, codes on labor

providers and platforms. How to protect user information security has become a new responsibility issue for internet

rights and other social responsibility requirements. In some countries and territories such as conflict-affected high-risk

companies. In 2018, Alibaba Cloud, Tuniu, and Ctrip were named and shamed by the Ministry of Industry and Informa-regions where the mining and trade of natural resources may exacerbate conflicts and human rights violations, it istion Technology for high-risk loopholes in information security management system and a failure to establish newespecially important for businesses to conduct supply chain management in order to protect human rights and avoid

business security assessment systems. Internet companies are duty-bound to protect users’ information security. To

the risk of fuelling conflicts. Huawei, Yunnan Tin Industry, Ronbay New Energy Technology, among other enterprises, havefulfill their own social responsibility in the big data era, they need to re-examine and improve the information security

issued responsible supply chain management statements, announcing their firm commitment to responsible procurement.

practices.2

Responsible procurement also means that businesses have to buy products or services based on the principles offairness, openness and impartiality. In the honey industry, for example, beekeepers are usually at the bottom of the

CSRs apply to internet platforms

value chain and are hard-pressed to both obtain a fair share of income and maintain consistency in the quality of raw

The rapid development of internet-based companies in China’s feverish “Internet +” startup scene has provided ahoney. In order to ensure the quality of raw honey and safeguard beekeepers’ fair economic benefits, Baihua Honey,strong impetus and source of innovation for economic development. By mobilizing social resources, internet

a brand created by one of the CEIBS alumni, have integrated beekeepers into their inclusive business model. The

platforms may have created enormous economic and social benefits but have also laid bare new CSR-relatedcompany has established an apiculture center and a professional bee-keeping cooperative where beekeepers arechallenges. In the bike sharing industry, companies have, by operating via an online mobile application, greatly

given technical training on bee-keeping and assisted in raising the yield and quality of raw honey. It has not only

improved mobility for urban residents. However, the murder of a passenger by a taxi-driver using Didi’s hitchhiking

improved the economic benefits of beekeepers but also secured a reliable source of raw materials aligned with its

platform exposed serious loopholes in the company’s passenger security management. Bike-sharing was hailed as a

responsible procurement policy.

great innovation for zero carbon footprints; however, mountains of abandoned sharing bicycles have resulted in great
waste of resources and added to urban management difficulties. Ofo, one of the station-free bike-sharing platforms,

Implementing green supply chain management
Green supply chain management involves steering business partners and the whole industry towards green development through supplier management and green procurement in a top-down process. In April 2018, the Ministry ofCommerce and seven other ministerial departments jointly issued the Circular on Trial Innovations and Application of
Supply Chain, which prioritizes the development of green supply chain systems throughout the processes and links

have hurt the interests of its users through delays in refunding their deposits. If enterprises only focus on their own
economic interests without performing their social responsibilities, problems will rise and their ability to operate as agoing concern will be undermined. In December 2018, 36 internet companies, including Alibaba, Tencent and Baidu,
signed the “Chinese Internet Companies CSR Initiative 2018” to explore how internet-based businesses can best fulfill
their CSRs and build a healthy business environment.

of businesses’ operations. Distribution companies and industry associations have also established a “Green Procurement Alliance” to promote green procurement in the distribution industry.
Businesses also lent strong support to the promotion of the green supply chain notion. Landsea Group, Vanke and the
SEE Conservation launched the “China Real Estate Industry Green Supply Chain Action Plan” calling on real estate
enterprises to improve resource efficiency and environmental benefits and help cut carbon emissions through green
procurement. Sanyuan Foods, for instance, is committed to waste and pollution reduction through reuse or reduced
use of product packaging whilst maintaining product quality. Midea, Hisense and a number of other Shunde-based
manufacturers jointly published the Shunde Green Supply Chain Declaration. They also developed the Green Evaluation
Standards for Shunde-Based Home Appliance Suppliers under the auspice of the Shunde District Energy Conservation
Association, shifting the focus of green supply chain management from distributor management to full life cycle management.

018｜CEIBS CSR Report 2018 · CSR in China

2

JD.com, you’re responsible for protecting users’ information security. Qianjiang Evening News, December 12, 2016. http://www.sohu.com/a/234139484_
100180399.

CSR in China · CEIBS CSR Report 2018｜019

Internet-based Charity:
Universal and Informed Participation

Green Finance:
New CSR Catalyst

Rapid advances in information technology have allowed the internet to become a major focal point for

Today, as China has entered a critical period of economic restructuring and transformation, a stronger demandconnecting donors and recipients. Evolving internet-based charity models have become a major rallying force

for finance is emerging for the development of green industries and the greening of traditional industries. Greenfor getting more people to perform acts of love. Through public oversight and self-regulation, web-based charities

finance requires financial institutions to pay more attention to the management of environmental pollution, theare becoming increasingly sophisticated and orderly.

protection of the environment in their business activities, and promotion of sustainable social development by
mobilizing social and economic resources. Green finance has become a new catalyst for the development of
CSR in China.

Promoting universal participation in charity
Internet-based charity has evolved rapidly to become a major form of philanthropy as participation is possible
anywhere at any time. Technological interventions and innovations have pushed web-based charity to a whole newlevel of prosperity.

In 2018, China’s green bond market enjoyed steady growth with 129 green bonds totaling RMB 220.853 billion issued,marking a substantial increase in the number and size of bonds issued over 2017.4 The funds raised were mainly usedin the field of pollution prevention, clean transport and clean energy. In 2018, Industrial Bank issued RMB 60 billion

Following “99 Charity Day”, a nod to September 9th, Tencent launched Action for Good. In 2018, it launched the “Walkyuan worth of green financial debt in two batches thereby increasing its outstanding green bonds to RMB 110 billion

to Give” charity campaign, calling on the general public to donate their steps to help children with leukemia. Over 30

yuan—the largest in size by any commercial banks.

million people participated in the campaign, donating over 500 billion steps. In addition, Ant Forest and Revenue
3

Donation, launched by Alibaba on Alipay mobile client, have become ongoing charity programs that users can directly
participate in when they shop and exercise. The accessibility of these programs have greatly aroused the interest of
the general public in charity, ushering in an era of mass participation in charity.

Towards well-informed charity
While internet-based charity has increased public interest and gained in popularity, it has also called into question theauthenticity of information on charity programs and implementation efficiency. Public confidence that charity
programs are transparently operated is the bedrock of their sustainability. Through public oversight and self-regulation, web-based charity has got on the right track of healthy and orderly growth.

In response to China’s needs to transition to a green economy, Industrial Bank launched diversified financial products
and services including financing and smart finance in an effort to create a green financial product chain. ICBC, in viewof the increasing need for energy conservation and environmental protection in developing a circular economy, haslaunched carbon factoring, energy efficiency loans and other green financial products in the green finance market. At
the same time, the bank has been promoting e-banking, network financing and other green financial services, tocreate an environmentally friendly “green bank”.5
Green finance is essential for the sustainable development of the financial system itself. At the same time, it is helpful
for promoting green investment, as it guides capital flows into energy-saving, environmentally-friendly and green
industries but discourages investment in high-polluting and energy-intensive sectors. In addition, it can produce awide range of other benefits, including: helping build a market-oriented green technology innovation system; promot-

To build users’ trust in charity organizations, especially internet platforms, Tencent Charity has created a “transparency”

ing resource conservation and environmental friendliness; and facilitating the formation of green development models.

popup box to disclose information on where users’ money will be used before they make any donations. The use of

Under which economic and social development are aligned with environmental protection.6

the reminder makes sure every penny of donation it receives is made out of users’ compassion and a well-thought out
decision making process. Charity platforms such as axzchou.com, Qfund and shuidichou.com have jointly publishedthe Self-discipline Initiative for Taking to the Internet for Support with Grave Illnesses and the Self-Discipline Convention on Turning to Internet Service Platforms for Relief with Grave Illnesses, to prevent any misuse of the platforms.
According to Chen Yidan, founder of Tencent Charity, charities may need to use sensational stories to rally support in
the initial stage but as they grow, they have to truly connect with well-informed constituents and should focus moreon their long-term sustainability instead of prioritizing short term donations spikes.

3

Tencent Charity “Action for Good” scores victory: 30 million participants donate 500 billion steps for charity. February 2, 2018. http://prnews.techweb.com.
cn/qiyenews/archives/76939.html.

020｜CEIBS CSR Report 2018 · CSR in China

Lianhe Credit Rating. China’s green bond market environment improves and green bond issuance increases steadily. March 5, 2019. http://www.sohu.co
m/a/299248532_238300.
5
New development model in green finance. FT. January 8, 2019. http://finance.sina.com.cn/roll/2019-01-08/doc-ihqhqcis4032499.shtml.
6
ibid.
4

CSR in China · CEIBS CSR Report 2018｜021

CSR Reports:
A Mainstream PracticeIn 2018, industry associations and private institutions joined in the ranks of listed companies to publish
research-based social responsibility reports and introduce the existing practices in their respective industries
for lessons learned and the way forward.
In 2018, many government departments and agencies also prepared and published their own social responsibility
reports. The SASAC and the Academy of Social Sciences jointly released the Blue Book on CSR in State-Owned
Enterprises 2017 as a major guideline for SOEs to implement their CSRs efficiently. The All-China Federation of Industry and Commerce (ACFIC) released its first Report on Chinese Private Businesses CSR 2018 which gives a rundownof the successful experiences and fruitful achievements of private enterprises in fulfilling their corporate social responsibility. Other CSR-related reports published by government departments include the China Sustainable Development
Evaluation Report 2018 and the Report on the Sustainable Development of Cities in Western Provinces 2018.
Industry-specific social responsibility reporting plays a positive role in encouraging socially responsible behavior indifferent industries. In 2018, the first Research Report on Performance of Social Responsibilities by China’s Movie
Stars (2017-2018) was released. In addition, the China Automotive Industry Social Responsibility Development Report2017-2018, China Food Industry Social Responsibility Report 2018 and the regional Law Industry Social Responsibility
Report were released.
There are also a growing number of research-based social responsibility reports including the Research Report on
A-Share Companies’ CSR 2018 jointly released by Shanghai University of Finance and Economics and CEIBS; theGoldenBee Research on China’s Corporate Social Responsibility Reporting 2017, prepared by GoldenBee; and A
Substantive Analysis of CSI300 Index Constituent Businesses’ CSR Reporting 2018, jointly released by Good
Business and SynTao-Sustainability Solutions, and etc.

Since its opening up and reforms 40 years ago, China has achieved spectacular economic progress. Chinese
businesses have taken the initiative to fulfill their social responsibilities as they grow, adding new dimensions
to the notion of CSR and pushing its development to a whole new level.
Chinese businesses are increasingly focused on having supply chain partners shoulder their own social
responsibilities. Web-based platforms are evolving rapidly, giving rise to internet-based charities. In an era ofuniversal participation in charity and people grow more wary of internet scams, web-based charities are enjoying healthier growth through public oversight and self-regulation. By encouraging private investors to participate in green industries, green finance has become a new catalyst for corporate social responsibility.
In a world that is undergoing once-in-a-century changes, Chinese businesses need to better enact their social
responsibilities as an effective tool for transformation, upgrading and strengthening their global competitivenesswhen further expanding their operations domestically and internationally. Only by fulfilling their social responsibilities as they participate in social and economic changes can they ensure sustainable growth.

022｜CEIBS CSR Report 2018 · CSR in China

CSR Practices of
CEIBS Alumni
Companies

Poten Enviro:
Promoting Corporate Ambition andSocial Impact Through CSR Practices
Huang Xiayan, Dean’s Office, CEIBS
Poten Enviro Group Co., Ltd. (603603.SH) is a trailblazer“Greatness originates from altruism” is the businessin China’s environmental protection industry. Since its

philosophy of Poten Enviro, and the concept of social

inception in 1995, Poten Enviro has taken on the mission

responsibility is deeply enshrined in the values of allof “creating an enjoyable environment for the harmony of

employees at Poten Enviro. The companies’ CSR

human and nature”. Adhering to the essential values of

initiatives include: the “Clean water stations” campaign,

environmental protection operations, the company has

which promotes safe drinking water for the improvement

relied on its attention to detail and innovation in deliveringof the quality of life for young people; the “China Desert

exceptional solutions to industrial water treatment

Environmental Challenge”, which brings together stake-systems, urban and rural water environment projects, andholders in the environmental industry and raises public

ecological industrial applications. In addition, Poten

attention on environmental issues; the charity auction forEnviro strives to promote the integration of environmental

people with pneumoconiosis; the “Green Bookshelf” andprotection activities into the manufacturing stages of the“Memsino” scholarships and other charitable educational

product life cycle, thus promoting green transformations

activities; and the “CEIBS Alumni Forums” series thatin companies to achieve green development.

promotes CSR practices—just to name a few. Zhao Lijun,
Chairman of the Board of Poten Enviro once said,“Responsibility gives companies the ambition to growand makes the society a better place.”

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜025

And I do believe that greatness originates from altruism. This belief has
also motivated me to work in the environmental protection industry,
because by definition, companies in this field are responsible for assistingother companies to protect the ecological environment, and hence act
as the backbone for social and environmental sustainability. Since its
inception, Poten Enviro has been adhering to the principle of altruism.
We firmly believe in the power of quality, attention to detail and innovation,with which we continue to create greater value as we commit ourselves
to becoming a company widely needed by all sectors of the society.

Zhao Lijun
CEIBS EMBA 2001 Alumnus
Chairman of Poten Enviro Group Co., Ltd.

Where the Journey Begins:
A great ambition nurtured at the Gulf of Finland

Forging ahead
In its early days, Poten Enviro was serving a single industry. As the economy developed, the demand forwater treatment in emerging industries continued to increase, and so were the society’s expectations for

Born in Ningxia, Zhao Lijun spent his younger years in his hometown located at the Loess Plateau, a region severely impacted

the values of the environment. As a result, Poten Enviro gradually extended its environmental protection

by soil erosion. Later, he studied and worked in Beijing, a city prone to sandstorms at the time. In 1993, during a study tour tobusiness from the waste treatment stage to the production stage of the material management cycle, providing

inspect new energy facilities at St. Petersburg, Russia, Zhao Lijun was fascinated by the beautiful scenery of the Gulf of Finland.

support to the green production transformation and opening up new windows for green development.

Seagulls soared into the azure blue sky, and lush fields of grass blanketed the coast as far as he could see. As he relished

Responding to the needs of the society, Poten Enviro adhered to the essential values of environmental

the beauty of the Gulf of Finland, Zhao Lijun realized that he could never have imagined a major industrial city surrounded

protection businesses and extended its business portfolio from “water-related industrial environmental

by such marvelous nature. “When will Chinese cities have such a beautiful environment?” he couldn’t help but wonder. It

protection” to “healthy lifestyles for ecology, tourism and living”. In recent years, Poten Enviro has upgrad-

was at that very moment that the aspirations to provide his compatriots back home a beautiful environment kindled in his

ed its key business areas of industrial water systems, urban and rural water environment and ecologicalheart, which in turn led to his pursuit towards environmental protection in China.

industries under the new banners of “strong industries” “superior water services” and “beautiful ecology”.

Although the environmental protection industry was more or less an uncharted territory at the time, Zhao Lijun firmly
believed that anything for the benefit of humankind will have a great future. According to Zhao Lijun, environmental improvement
is bound to become an important need in the future. Pollution management requires efforts from the private sector as muchas it requires the support of the government. Inspired by the forefathers of the industry, Zhao Lijun founded Beijing Boda
Environmental Engineering Co., Ltd., the predecessor of Poten Enviro, at the age of 27, committing himself to the cause of

The company also strengthened its focus on three key areas of growth—soil and groundwater remediation;
environmental monitoring and intelligent environment management; and core equipment manufacturing. In
addition, they’ve been innovating their technology, products, services, business models and management,so as to continue providing improved ecological solutions to create new values for a beautiful environment
and a better life.

environmental protection.

Chasing Dreams:
Creating an enjoyable environment for the harmony of human and nature
The dream landscapes
An affluent and peaceful nation surrounded by green mountains, lush grasslands and clean water under the blue sky—thisis the dream landscape cherished by all members of Poten Enviro, whose mission is to create an enjoyable environment for
the harmony of human and nature.

A versatile integrated service provider that covers the entire industrial chain

5
1995
FoundedRegional
centers90+

Branches andsubsidiaries

2200+
Employees

Business Scope• Industrial water systems• Intelligent environment management• Urban and rural water environment • Core product manufacturing• Ecological industries• Soil and groundwater remediation

The harmony of human and nature is an important notion in the traditional culture of China. “Unlike hardline environmentalists
who pursue environmental conservation while neglecting people’s pursuit of a better life, we aim to enable quality life
through creating a beautiful environment for all,” says Zhao Lijun, who believes that Poten Enviro must not only respect,
adapt to and protect nature, but also provide a better environment for human beings in doing so. Poten Enviro not only
harbors an earnest desire for a beautiful environment, but also the dream of better life.

026｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜027

Empowering a strong industry—A full life cycle water environmental steward
In both traditional fundamental industries such as energy and chemicals, and emerging strategic industries such as integrated circuits, Poten Enviro is committed to providing an integrated solution for industrial water systems that covers the entire
life cycle. The company positions itself as a promoter of comprehensive resource conservation and recycling from the startof the life cycle in order to address the needs for green development, circular economy and low-carbon development forecological development. In doing so, it has become one of the first Chinese listed company operating in the high-tech water
treatment field, for example, the integrated circuit industry.
In recent years, based on close to 300 typical projects launched, Poten Enviro developed a number of proprietary technologies and process toolkits that were used to tackle a variety of environmental problems. Flagship projects have been set up
in the treatment of industrial sewage, domestic water, circular water and reuse water, contributing to the green developmentof our clients in various industries. For example, Poten Enviro achieved a breakthrough in zero-discharge of high-concentration salt wastewater in China’s first million-ton indirect coal liquefaction project implemented by Shaanxi Future Energy
Chemical Industries Co., Ltd.1 The project was awarded the “2016 National Outstanding Chemical Industry Engineering
Project” and was listed in the “2018 Directory of Key Environmental Protection Technology Demonstration Projects”.

Wastewater treatment facilities for the Yankuang Yulin million-ton indirect coal liquefaction demonstration project, Shaanxi Future Energy Chemical Industries Co., Ltd.

Perfection through superior water services—Enhancing the value of water resources

Sharing the beautiful ecology—Creating new ecological values

In delivering “superior water services”, Poten Enviro builds on its expertise in

Responding to the increasing understanding and demandCurrently, through its environmental protection projects,

water supply, drainage, water reclamation and pipe networks, actively extend-

for ecological values by the society at large, Poten Enviro

such as the Jinggang Cultural Tourism Theme Town,

ing its operations from traditional water management to integrated solutions atlaunched a business portfolio labeled as “beautiful ecolo-

infrastructures for the scenic belt along Guijiang River inthe river basin level, creating an intelligent integrated ecosystem of urban andgy”. Building on its work on environmental improvement,

Zhaoping County, and the “City of Water” in Wuyishanrural water management. It aims to continue serving higher environmental

Poten Enviro has been working in areas with rich ecologi-

City of Fujian Province, Poten Enviro has combined

standards with new business models and new technologies, optimize operat-

cal endowments to explore ecological values throughecological values with cross-cutting industries such as

ing costs, improve service quality, create improved water assets, and deliverenvironmental art and ecological technologies. It has

culture and tourism, health and wellness, and sports,

better water environment services.

created various ecological industries for different scenari-creating a more direct and broader link with consumers,os such as the “Mountain, River, Forest, Farmland, Lake,

while empowering local economic development by adher-

and Grass System” that provides diversified high-quality

ing to the principle of “Green is Gold” and exploring new

ecological products for upgrading green consumption,

ecological values.

In 2016, to address the challenges of urban river basin management, Poten
Enviro took the lead in managing polluted water bodies in the city of Linyi using
its cutting-edge expertise in integrated management. Through innovating its
technological approaches and treatment options while taking into consider-thus creating a “good landscape and idyllic life”.

ation the unique characteristics of hydrological and pollution conditions, Poten
Enviro has established a technical system for water environment treatment. In
A Public-Private Partnership project for river channel
improvement, as part of the comprehensive water
environment improvement project in Linyi city

the process, it has overcome many challenges as it strives to contribute to an
improved environment. After working for more than a year, the treatment ofpolluted water in the urban area of Linyi has made remarkable results and clear
waters have been restored.2 Clean rivers and lush shorelines returned to thecity, and fish can be seen roaming in the water. Such a beautiful landscapemade Linyi one of the twenty “Model Cities in Polluted Water Management 2018”.

www.h2o-china.com. Poten Enviro achieves zero-discharge in wastewater treatment for indirect coal liquefaction. 2017-02-24 [2019-01-12]. http://www.h2o-china.com/news/254377.html.
2
official website of Poten Enviro. Poten Enviro helps to restore clear waters supported by state subsidy of RMB 600 million for Linyi’s polluted water body management.
2018-10-30 [2019-01-13]. http://www.poten.cn/show/?id=700&page=1&siteid=1.
1028｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

Scenic belt on both sides of Guijiang River, Zhaoping County

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜029

Supporting modern environmental governance,
Promoting intelligent environmental management
At present, environmental protection supervision is mainly conducted manually, and astandardized and refined environmental quality supervision system is yet to be established.
Based on its leading monitoring and detection capabilities, Poten Enviro integrates big
data, cloud computing, artificial intelligence and other new technologies to generate
insight from various environmental data, through which it has established an all-inclusive
three-dimensional ecological and environmental monitoring system to provide credible
environmental big data, providing customers with the confidence of timely and effective
environmental data, increasing their ability to prevent and control environmental risks,and enabling them to achieve intelligent environmental management.
During the 2017 BRICS Summit in Xiamen, Poten Enviro was responsible for primary andalternative water source monitoring, landscape water quality monitoring and environmental law enforcement monitoring to ensure water safety and air quality for the Summit.3

Practicing green remediation,
Restoring natural ecological vitality
As China’s environmental governance has shifted focus fromOnly through technological innovation embedded in products can we“visible” pollution to “invisible” pollution, greater attention has

achieve better values. In the area of water environmental services such as

been drawn to ecological remediation. However, many remediationindustrial water systems, urban and rural water management and water-

projects are near-sighted, which is evident by their hasty fieldshed management, Poten Enviro relies on its leading proprietary mem-surveys and over-remediation. The concept of green remediation

brane technologies to provide high-quality membrane products, integrated

that comprehensively takes into account environmental,

membrane equipment and membrane technology solutions to the society.

economic and social benefits has not been widely accepted by

At the same time, by integrating global technologies, Poten Enviro strives

the market.

to enhance its core product capacity and provide differentiated water

Poten Enviro provides a comprehensive portfolio of services
that cover surveying, risk assessment and solution design,
implementation and acceptance for different stages of intervention,such as pollution prevention, control, emergency treatment andProject Site of the Xinjiang Zhongtai Chemical Soil Remediation Project

Adhering to perfectionism and innovation,
Creating leading technological products

treatment equipment and purification products providing direct drinking,seawater desalination, sewage treatment, disaster relief, among others, formilitary, civilian and emergency management use, creating green values
through advanced technology.

pollution remediation, for various soil and groundwater remediation

An example is the energy-saving submerged membrane chemical reactor

scenarios such as mines, oil fields, farmland, industrial sites and(MCR) technology developed by Poten Enviro. The MCR combines theriver sediments. This helps achieve green ecology, joint

high-efficiency membrane separation technology with chemical reactions,water-soil management and long-term safety, helping the industry

further strengthening the chemical reaction process through the special

to transition from short-term result-driven operations to thefunction of membranes. This improves the efficiency of chemical reactions

longer term pursuit of green, safe and sustainable remediation.

and efficiently removes hardness, turbidity and dissolved silicon in the

Membrane chemical reactor (MCR)

water, which results in significantly higher water quality than traditional
precipitation methods. The advantages of this technology include remarkable energy-saving capability, high integration, sophisticated softening,and silicon removal at room temperature, making it applicable to various
3

HC360.com. Poten Enviro safeguards Xiamen BRICS Summit, builds trust through quality services. 2017-09-05[2019-01-15]. http://info.water.hc360.com/2017/0
9/071126590066.shtml.

030｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

fields such as brine pretreatment, wastewater discharge and water reuse.

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜031

A Heart in Awe:
The value of fleeting lives

The Road to Belief:
Greatness originates from altruism

In 2008, the whole country was saddened by the Wenchuan“When practicing Altruism, you improve yourself, and yourearthquake in Sichuan province. Zhao Lijun went to the disastercompany becomes healthier. Only when it creates value for-stricken area to coordinate relief work representing Beijingsociety can a company be more widely relied on, and this is

Urban and Rural Construction Group in the capacity as Chiefwhat a great company should pursue.” Zhao Lijun has

Coordinator for providing development support to Sichuan

enshrined the idea that “greatness originates from altruism” asProvince. There, he was constantly struck by the sight of broken

the business philosophy of Poten Enviro.

bridges, falling rocks and the sudden perishing of life.
The stark realization that life is so fragile has been lingering on in
his mind till today. Aftershocks continued through the days andnights that followed, and Zhao Lijun was compelled to rush in andout of their shelters constantly along with his colleagues andsurvivors of the disaster. In between these restless rushes, Zhao
Lijun was observing people’s exhaustion and persistence, tears
and smiles, fragility and strength, constantly asking himself, whatis the meaning of life? In this fleeting life, how to live a life with aclear conscience?

Charitable Poverty Alleviation. Poten Enviro actively participates in poverty alleviation in designated counties assigned by
the Ministry of Ecology and Environment. It is also stepping up
its efforts of poverty alleviation in the “Ten thousand enterprises for ten thousand villages” program. Under the guidance of
the China Environmental Protection Foundation, Poten Enviro
established in 2015 a Special Environmental Fund with a totalof RMB 10 million yuan. The Fund has supported a series of
CSR activities in more than 10 cities.

“In this limited life, we have to do more for the society.” Behind

Charitable Environmental Protection. Poten Enviro actively

this simple statement lies Zhao’s profound understanding of life

promotes the “Clean water stations” campaign, which

and what is the most worthwhile thing to do in our ephemeral life?

promotes safe drinking water for the improvement of the quality

Since then, Zhao Lijun would continue to contemplate on theseof life for young people; it contributed to the launch of thequestions as he went on hikes deep into the heart of nature. The“China Desert Environmental Challenge”, which brings togeth-trip to Antarctica, his farthest adventure so far, has touched theer stakeholders in the environmental industry and raises public

deepest corner of his heart.

attention on environmental issues; the company also actively
participates in the “Shanxingzhe” charity walks initiated by the

According to Zhao, “when you venture deep into nature, a

China Foundation for Poverty Alleviation.

strong feeling of awe will surge up from inside. As I stood infront of a glacier that was there hundreds of millions of years

Charitable Education. Poten Enviro participated in the “Greenago, the feeling of awe and responsibility kicked in. I realized

Bookshelf” charitable education program organized by the

how insignificant humanity is in the nature, and was appalled at“Environmental Education” magazine. It has supported thethe thought that how could we just do whatever we want to.”children at Ramang Khaba Art Troupe from the deep mountains

Thanks to the awe of nature, Zhao Lijun often reflects on himself.

of Qinghai province to perform in Beijing and promote their

Knowing that the emergence of human has just been a vanishingly

non-material indigenous culture. It also established the “Memsino”

small fraction of the history of our planet, we should do more toscholarship at the Beijing Institute of Technology to support

respect nature, conform to its laws and protect nature, rather thanthe development of their engineering and technological fields.

being arrogant enough to ignore its mighty power.

Poten Enviro also organizes book donation campaigns, which

If it was the beauty of the Gulf of Finland that made Zhao Lijun
decide to devote himself to the cause of environmental protec-

have collected more than a thousand books for the Bolin
Primary School, Inner Mongolia.

tion and to build “an enjoyable environment for the harmony ofhuman and nature”, then the Wenchuan earthquake and theclose encounter of nature definitely kept him in awe of natureand to realize the value of life, which reaffirmed his belief that
“greatness originates from altruism”.

032｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜033

Hosting CEIBS business forum: The wayof business, for the virtue of wealth

Exploring models for public interest:
Apples with the warmth of gratitude

In order to better promote CSR awareness and encourage

In May 2018, 300 environmentalists challenged their own

Social responsibility is not a one-off investment, but ancompanies to take up social responsibility, Poten Enviro

limits by walking 70 kilometers in three days and two

ongoing commitment. In its charitable poverty alleviation

has been working with the CEIBS Alumni Association fornights deep in the Tengger Desert, completing a journey

work, Poten Enviro was able to explore new business

Environment Protection and China Environment News in“in, and for the beauty of nature”. This sporting event

models building on local ecological resources, as aholding the annual CEIBS Alumni Forum on the Art ofwithin the environmental protection community was alsomeans to help translate high-quality local organic products

Business since 2014.

a charitable competition that strengthened the determination

into economic benefits, thereby enabling more people toof environmentalists, united their power for environmental

enjoy a quality life while reaching out to local communities.

What is the way of business? Zhao Lijun once said, “Manycompanies often understand CSR as a one-off donation. But the Business Forum has put forward the ideaof ‘the Way of Business for the Virtue of Wealth’. Using

Investing in charitable clean water stations:
Every drop of clean water counts

Challenging the endless sea of sand:
Promoting environmental awarenessthis idea, we want to show that CSR should be anprotection, and kindled environmental awareness among
more and more people. It was already the fourth China
Environmental Protection Desert Challenge, which was
initiated by Zhao Lijun.

In January 2018, the Poverty Alleviation Office of the StateCouncil collaborated with the All-China Federation ofIndustry and Commerce jointly to launch the “Tenthousand enterprises for ten thousand villages” program

integral part of a company’s business operations. It

The Desert Challenge encouraged participants to discoverfor consumer poverty alleviation. Zhao Lijun participatedshould support and promote each other as the company

the beauty of the desolate desert, while at the same timein an in-depth field research in Gansu province as the

In June 2015, pupils at the Dazhanchang Primary School

develops. In doing so, companies will have a more

inspired them to contribute to protecting the fragile

president of the Environmental Chamber of Commerce ofin Zhongning County, Ningxia Hui Autonomous Region

sustained and healthier development, which in turnenvironment in the desert. Pollution in the Tengger Desert

the All-China Federation of Industry and Commerce.

witnessed clear water gushing out of the faucet, and finallyallows for larger responsibilities on their shoulder.”has been a matter of grave concern and has sparked

During his field research, he visited Jingning, a national

many heated debates. Through the Desert Challenge,

key poverty-stricken county in Gansu Province, where thePoten Enviro drew more attention and support forecologicalenvironmental protection. By safeguarding this purest

high-quality apples were produced locally. However, dueform of nature with concrete actions, it is committed toto its remote location, the county had problems marking

protecting the untouched nature of Tengger.

their apples, which remain quite unknown until then.

were able to enjoy clean water from the tap. “The water isvery sweet!” the Children exclaimed.4 In fact, the water is
not sweet by any standard, but taste of sweetness actuallycame from its drastic difference from the puckery taste of
the water they used to drink.

Currently, the CEIBS Alumni Business Forum has been
held three times, bringing together economists, renowned
sinology scholars, CEIBS alumni, avid environmentalist-entrepreneurs , and eminent personalities to exchange
views on the topics of “reconstructing the values ofenvironment

was

well

preserved

andFarmers were compelled to sell their apple stockpiles at

Bohui Technology, a subsidiary of Poten Enviro, hasbusiness ethics” “opportunities and challenges for green

conducted professional tests on the water quality of

economy under the new realities” and “green develop-

Ningxia, which found that local drinking water has ament: from responsibility to opportunity”. At the samevarying degree of excessive hardness, as well as chloride

time, the Forum also issued the “The Way of Business

To help Jingning Country eradicate poverty, Poten Enviro

and nitrate content. In the long run, excessive intake of

Declaration”, which calls on entrepreneurs to actively

worked with local cooperatives and trading companies tosuch water may cause damage to brain development andparticipate in reshaping the values of business ethics.

bridge supply and demand through purchasing apples

nerve activity among children. Therefore, safeguarding
the safety of children in Ningxia has become a top priority.
In response, through its Special Environmental Fundunder the China Environmental Protection Foundation,
Poten Enviro worked with the CEIBS Alumni Association
for Environment Protection and launched a donation
campaign for the water station program.

low prices to beverage factories without even able torecover production costs.

and introducing e-commerce. On Mid-Autumn Festival in

An auction was held during the third forum which sold ten

2018, employees of Poten Enviro received a special gift,

paintings drawn by innocent young artists brimming withapples with the warmth of gratitude. By the end of 2018,

sincerity and imagination. These artworks were hand-

Poten Enviro had purchased 30,000 kilograms of apples,

painted by the pupils in the poverty-stricken counties inbringing a direct or indirect income of nearly RMB

Hebei province where “CEIBS clean water stations” were

600,000 yuan to local farmers.

installed. The paintings deeply moved the audience andraised a total of RMB 39,573 yuan, which was sufficient toStarting from Ningxia, Poten Enviro has invested in 73

provide clean water and better prospects for 425 children

drinking water stations at 19 schools in 6 regions acrossfor one year.

China, providing clean and healthy drinking water tonearly 20,000 teachers and students countrywide.

4

Xinhua.com. First clean water stations launched in Ningxia, providing 3,600 children with healthy drinking water. 2015-06-08 [2019-01-21]. http://news.cri.cn/gb/
42071/2015/06/08/6611s4989752.htm.

034｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

China Environmental Protection Desert Challenge

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜035

Up and Above:
A starlit night
At the end of 2018, the Branding Department of Poten“How to encourage a wider range of people to practiceEnviro conducted an internal survey on employees’ brandsocial responsibility is the most important and mostperception. Results show that “a high sense of social

challenging issue.” Zhao Lijun believes that companies

responsibility” was the highest ranked among the eight

can play a special role in practicing social responsibility.

characteristics provided in the survey. As a result of thisHe hopes that, by exploring social responsibility models

survey, Poten Enviro started to take stock of the CSR

that benefit multiple stakeholders, which are inherently

activities over the past years, which was a present

longer-lasting and able to create value continuously, thensurprise for Zhao Lijun, who said: “We realized how manysuch public welfare activities will become sustainable by

CSR activities we have conducted over the years,

engaging more companies in the process.

although we have never deliberately tried to do it just forthe sake of ticking boxes.” Indeed, when it comes togiving back to shareholders, caring for employees,
leading the industry, protecting the environment, andsupporting social welfare, Poten Enviro has been taking

Immanuel Kant once remarked: “Two things fill the mind
with ever new and increasing admiration and awe, themore often and steadily we reflect upon them: the starryheavens above me and the moral law within me.”actions consciously, inspiring all employees with theOver the past 24 years, Poten Enviro has been commit-

concept of “greatness originates from altruism”. In thisted to protecting the purity of nature and “creating anway, Poten Enviro was able to ingrain a CSR mindset inenjoyable environment for the harmony of human andeach and every employer. Zhao Lijun once said, very

nature”, striving to maintain the purity of the environ-proudly that “By proactively showing their sense ofment we have been enjoying under the sunny and starry

responsibility, the people of Poten Enviro have createdheavens above us. At the same time, it is our hope thata positive impact and a leading effect across the entire

our firm’s belief of “greatness originates from altruism”

industry.”

will be able to create greater benefits for more people.

Zhao Lijun believes that CSR is a sense of ultimate

CHERVON:
Building Better Tools to Help
Build a Better World
Zhang Chi, Case Center, CEIBS

Zhao Lijun looks forward to working together with more
CEIBS alumni to open up a wider horizon for coopera-

Headquartered in Nanjing, CHERVON started as a trading

launch of a cordless outdoor power equipment under thecompany for power tools, enjoying a high reputation in

EGO brand. In 2014, right after its release, EGO products

the international market for its business integrity andquickly became “bestsellers” on the market because of

more people and encourage more people to practicestringent quality control. In the short span of a little moretheir advantages like the one-button start, no vibration,social responsibility. When more people take part inthan ten years, CHERVON has become a major player inand low noise, contributing cumulatively USD 200 million

social responsibility activities, the activities can be

the tool industry in China and a leading brand of outdoor

to CHERVON’s sales revenue. In addition, they also

replicated and upscaled to create more benefit.

power equipment in the world.

generate social benefits like energy saving and emission

responsibility. On the one hand, CSR activities must truly
create value and benefit the target groups. On the other
hand, it is necessary to extend the influence to covertion, connect more resources, promote better synergy
among stakeholders, and strive for a better future.

CHERVON at first kept itself away from the outdoor
power equipment business due to its concern over theserious pollution caused by small engines. After spending
more than five years on overcoming technical difficulties

reduction. So far, the EGO products sold are equivalent toa reduction of 93,000 tons of carbon dioxide and 27,000
tons of carbon emission. EGO is leading the trend of
cordless outdoor power equipment.

in product development, CHERVON found an innovative“We build better tools to help build a better world.”

way to replace gasoline engines with those powered by

CHERVON has been fulfilling its mission with concrete

high-voltage lithium batteries. It then successfully

actions.

“changed the lane to overtake” in the industry with the

036｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜037

The Never-Fading Aspiration
to “Make Good Products”
Twenty-five years ago, Pan Longquan decided to build aThis incident has sounded the alarm to CHERVON: Good

new startup after he had been engaged in the power tool

products are not made through bragging. Quality control

trading business for five years. He finally had the opportu-

is at the very top of the company’s agenda. To this end,

nity to visit the overseas markets he had been developing

CHERVON invested heavily in building its first test centerfor decades. However, he found the reality very cruel:in China. The high bar set by its testing has caused

Foreign customers regarded Chinese products as inferior

dissatisfaction among many of its suppliers. After all, evenand only marketable if sold cheap. In stores, Chinese

the largest power tool factory in China at that time did not

Pan Longquan

products were piled up in a corner “as if they were

have a fully-equipped test center. Nevertheless, the

CEIBS CEO 2008 Alumnus

garbage”; at the negotiating table, customers did just one

forward-looking CHERVON continued building laborato-

Chairman of CHERVON Holdings Ltd.

thing—to slash prices as fiercely as they could, andries and even hired engineers from abroad as it gradually

Chinese companies seemed to be capable of nothing but

expanded its business to manufacturing, aimed at having

yielding again and again. Pan Longquan realized thatevery piece of its products undergo scientific andbeing “cheaper than others” was the easiest way torigorous testing in a systematic manner.

So how do you find the exact location of CHERVON

succeed, but it was like quenching thirst with poison. “InGroup’s offices in Jiangning District, Nanjing? The right

my opinion, this is the least sustainable way of doing

question to ask a stranger would probably be like this:business”. Since then, Pan Longquan has been deter-“Excuse me, where is that building with a green plants

mined to achieve CHERVON’s growth through great-covered roof?” Indeed, the Green Roof of CHERVON,

products of great quality. This aspiration has beennearly 7,000 square meters in size, has become an

imprinted on everyone’s mind at CHERVON. One solid

unequivocal landmark on West Tianyuan Road in the city.1

step after another, they strive to realize the initial intention

From international trade to power tool manufacturing, forthe past 25 years, CHERVON has successfully expanded
its business scope to cover handheld power tools, bench-of the company: to make great products for users all over
the world and to change the image of “Made in China” inthe global market.

I won’t say that our products are the cheapest,
nor will I say they are the most expensive,
because these are not the right perspectives on
our value. Customers choose to have along-term partnership with us because we are
the most capable of creating value, because
the products we make are of great value,
quality, and sustainability.

EGO:
Identifying Business Opportunities with the “Green” Concept
The Birth of Cordless Outdoor Power Equipment“What exactly shall we make?” This was an important

CHERVON’s management was also concerned about thequestion for CHERVON during its transformation towards

pollution caused by small engines: the serious noise

top power tools, electronic laser tools and outdoor equip-

The journey of making great products is painful. In 1994

manufacturing. Outdoor power equipment, an important

pollution of mowers working in the morning in the neigh-ment, to name just a few. Starting with only 3 employees,

when CHERVON was founded, quality control was still ansegment of the power tool industry, caught CHERVON’sborhood, and the fact that emissions from a small-engine

CHERVON has a headcount of over 8,000 around theunknown concept to many trading companies in China.

attention more than a decade ago. At that time, lightmower exceeds that of a dozen cars… Pan Longquanworld today. Equipped with advanced R&D, testing, andCustomers often had no way to claim for compensation–weight yard tools were already powered by batteries, but

revealed frankly that it was a conversation with the head

manufacturing capabilities as well as marketing, industrial

due to the “no returns or exchanges” policy. However,heavy–duty ones, such as lawn mowers that constitutedof Bosch, the leading player in the industry, that finallydesign, and after-sales service teams globally, CHERVONCHERVON gritted its teeth to accept a $50,000 claim, athe major category, still replied on small gasoline engines.

firmed his belief. “He told me that he would neveris now a global solution provider with a portfolio of brands

huge amount for it at that time, for quality issues arising

including EGO, DEVON, FLEX, SKILSAW, SKIL, X-TRON,

from the products it procured. They paid off their indemnity

Should CHERVON enter the outdoor power equipment

HAMMERHEAD, and CALMDURA. Currently, CHERVON’sin one year and a half, which secured them a partnershipbusiness? In terms of business scope, CHERVON had

products are sold in more than 30,000 chain stores in 65

for ten years in return. “Integrity could turn bad things

been deeply engaged in the power tool industry for many

countries.

into good ones”, observed Pan Longquan.2 Integrity has

years, so outdoor power equipment could be a natural

also been the very first rule in CHERVON’s code ofextension of its existing business, and there were many

conduct ever since.

precedents of tool manufacturers expanding into thissegment. Therefore, every year at the company’s strategic
analysis meeting, CHERVON’s top management would
study the segment, but it still held itself back from launching the business. The competition on the small-engine
outdoor equipment market was blazing hot. Not only that,

Sheng Wenhu. CHERVON Group Redefines “Made in China”: Internationalization As Its Most Eye-Catching Identity. 2017-10-17[2019-01-16]. http://njcb.xhby.net/mp2/pc/c/201710/27/c394552.html.
2
ibid.
1

038｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

consider making heavily polluting products. Bosch also
discusses its development strategy every couple ofyears, and the idea of making heavy-duty outdoor
equipment is always crossed out. Through my communication with them, I found that when they chose abusiness direction, apart from studying the businessprospects and market potential, they were also forward
looking and environmentally conscious. I was very
impressed. I believe this is what makes a great company.” Therefore, CHERVON shelved the outdoor power
equipment business although it was commercially attractive. As a result, it missed some short-term opportunities
to grow its business.

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜039

Michael Porter, the guru of strategy, maintains that creating shared value (CSV) is a way to reintegrate business with the society. According to him, companies do not need to assume responsibilities for all social issues, nor do they have the resources to solve all social problems. However,every company can identify a specific type of problems that the company is good at solving, andit can gain competitive strengths from solving such problems. Therefore, corporate social
responsibilities are not confined to charity or sustainability causes alone. Companies can also
help address social issues by adding new perspectives to products and markets, which will allow
them to achieve commercial success at the same time.

Behind the green solutions are pioneering
concepts that carry a sense of responsibility
for the future. It is advisable to identify
green business opportunities, because they
can lead the future for a longer time.

However, this business direction was not totally ignored,
because pollution could not change the fact that there
was market demand for such products. If existingproducts failed to keep up with the trend of environmental
protection, would it be possible to develop new products
based on more advanced environmental technologies?
CHERVON executives were quick enough to realize that if
they could do so, it might mean a golden opportunity forthe company and create even greater business than what
they had given up. After all, with its long-time involvement

No Compromise of User Experience“User experience shall never be compromised!” This is
the iron law obeyed by CHERVON all the time. It also
explains why CHERVON never loosens its efforts on
details. Household users use outdoor power equipment
occasionally, so they cannot accurately describe howlong they use the equipment or how often they need tocharge it. As a result, CHERVON employees have to makeobservations and experiments by themselves. Especially,

In addition, CHERVON has developed a better and more
endurable EGO product line for commercial users.
According to Zhang Qichun, “Many of our customers arelandscaping maintenance service providers. Be it companies or municipal units, they all have to take into accountthe health and safety of their employees at work.” Therefore, from the very beginning, the design of EGO professional outdoor power equipment focused on addressing
occupational safety concerns.

outdoor power equipment is used in a variety of settings.

Traditional gasoline engines emit a lot of pollutants due to“I have mowed lawns with our customers in the U.S.,

insufficient fuel combustion, which is the cause of many

Australia, and U.K.”, disclosed Zhang Qichun, Productdiseases and even cancers. The engines of EGO

Director of CHERVON, with a sigh that contained a trace

products, however, are powered by lithium batteries withof pride in it. “I have travelled all over the world, just to

zero emission during use, hence no harm to their users.

mow lawns.” Users do benefit from such painstaking

Vibration at high frequency is another issue with traditional

efforts. The battery-powered mowers, with their perfor-

outdoor power equipment, so according to relevant

mance completely comparable to gasoline-powered

standards in the UK, such equipment can only be used

ones, also boast advantages such as low noise, lowcontinuously for 1 to 2 hours. Otherwise, they may induce

There were no precedents on the market for CHERVON tovibration, no pollution, and no odor, granting users aillnesses such as neurasthenia. In the family of EGO

refer to, so every step it took was a very difficult one. In

totally different experience. Once users have tried them,commercial products, even hedge trimmers, which haveterms of power supply, CHERVON found that it could only

they want to keep using them forever. This is particularly

the highest level of vibration, can work continuously forprovide 40V lithium batteries while the voltage required bytrue with elderly users, because it is physically demanding

more than 4 hours. The noise of traditional outdoor power

outdoor power equipment should be much higher thanand not entirely safe to use the pull-start mechanism ofequipment can reach 98 decibels, leading to irreversible

that. The higher the voltage of batteries, the higher themowers with traditional gasoline engines. EGO products,

hearing damage, but EGO commercial products can betechnical complexity, and hence greater difficulty inon the contrary, can be easily started with just one pushused continuously for 8 hours with no harm. Therefore,

product development. It took CHERVON five years toof the button.

EGO products do offer real physical benefits to theirin the new energy sector, CHERVON had already accumulated relevant experience and technologies. Leveraging its technical strength and its research—based insights
into the market and technology development trend,
CHERVON finally chose the direction of replacing
traditional power for small engines with lithium battery
power, so it decided to develop a high-voltage battery
solution for outdoor equipment.

overcome the challenges and come up with a creative

users. What’s more, they can help employers save spend-

solution made up of high-voltage 56V batteries and aing on not only health and safety protective consumables

complete power system. It paved the way for a newsuch as noise protection devices, but also the annual costenergy—based alternative to replace gasoline engines.

of employees’ hearing inspection, safety evaluation, etc.

040｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜041

Sticking to Green Business Opportunities
The birth of the 56V high-voltage battery has brought

solve this problem, CHERVON has developed a portableinfinite possibilities to product development. In 2018,

power supply solution that can provide uninterrupted

CHERVON launched an innovative product—the self

power to 2KW electric appliances indoor without producing-winding string trimmer. It can be used in areas thatnoise or exhaust gas.

cannot be handled by four-wheel mowers. When a string
trimmer is working, the nylon string in its head usually
spins at a high speed through a transmission system.
When the trimmer works around lawn edges, stone flower
beds or fences, its string wears quickly and needs to be
replaced on a regular basis. The difficulty of the replacement work has always been a pain point for users,
because in traditional string trimmers, the direction ofstring feeding cannot be easily reversed. CHERVON’s
string trimmer, however, works in a far more flexible
manner thanks to its POWERLOAD™ technology. Its
winding mechanism and software design can support
easy change to the direction and speed of string feeding.
With high-speed trimming in one direction and low-speed
string winding in the reverse direction, this product has
significantly optimized user experience. Within one year
after its launch, 70,000 units were sold at a revenue of 15
million US dollars.

Energy conservation is also an important consideration in
CHERVON’s product design. EGO products are modular
in structure with battery packs at its core. Therefore,
although there are many EGO product lines, the same
battery pack can be used for all of them due to its highcompatibility. EGO products are not cheap, but users
only need to buy one piece of complete equipment, andthe rest can be bought without the battery pack. This isabsolutely great news for users. After all, it is the battery
pack that takes a lion’s share of the equipment cost. Even
the EGO portable power supply product uses the same
battery pack as the rest in the portfolio. As of December

Double Gain of Both Economic and Social Benefits

2018, there were approximately 1.5 million users of EGO
battery packs, and more than one-third of them have

In 2014, the first generation of EGO products were

Users also benefit from improved product performance.

purchased multiple EGO products. With a core module oflaunched in the U.S. As was expected by CHERVON, theThere is a “strange” phenomenon about EGO: Its after

higher reuse rate, EGO products not only reduce resource

products were well received on the market enjoying-sales service team always receives a lot of customer

consumption for battery production, but also brings

excellent sales. By 2018, the annual sales of EGO

calls that express appreciation and liking for EGO

greater value to users.

products had hit $200 million. The brand also attracted a

products. Once, an elderly American user called to tell thePower outage occurs far more frequently in the U.S. thanlarge number of followers. Take the mower as an exam-

team that “your product is really easy to use. It is incredi-in China because the power grids in the US are rather old.

ple. With the introduction of EGO, the market share ofble. Five minutes after I used yours, I decided to sell my

Many U.S. households would buy generators for emer-

cordless lawn mowers rose from 7% to 18%.

previous one to the recycling station.” Phone calls suchgency needs. However, the generators can hardly be
used indoors because they produce loud noises andpungent toxic gases when the engines are started. To

EGO also serves as the physical carrier of CHERVON’senvironmental philosophy. From 2014 to 2018, approximately 3.5 million units of EGO products were sold.
Based on frequency of use, the batteries of all theas these are a great encouragement to the people of
CHERVON. To them, it is the highest recognition of theirefforts to realize the company’s never-fading aspiration of“making good products”.

products sold should have consumed 16 million KWH ofelectricity, equivalent to a reduction of 93,000 tons ofcarbon dioxide and 27,000 tons of carbon emission if
compared with the use of gasoline. Moreover, EGO also
indirectly contributes to energy conservation and emission reduction since an increasing number of users,though initially attracted to EGO only by its product experience, have now become aware of the importance ofenvironmental protection.

EGO string trimmer

Scan to watch the animation

042｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

An animation clip of a customer call expressing appreciation of EGO’s product

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜043

Green Roof, Green FactoryMore than a decade ago, CHERVON invested heavily tointroduce a full-roof green garden from Germany to itssite. There are six or seven types of plants on the roof of
the CHERVON R&D center, so the garden shows different
colors as the seasons change. However, the beautiful
garden scene can only be viewed from a sloped angle, so

We shall always adhere to the green concept andwe’ve made every necessary preparation to this end.
If you implement the concept in a systematic way, inthe long run you’ll enjoy a very good pay-back.

the huge investment into this garden has been questioned
a lot. When CHERVON made this investment, it was still asmall company. Why did it invest into something that is
not visible? What is the point? As Pan Longquan firmly
states: “In the past few decades, China’s industrial
development has indeed taken a toll on the environ-the society and the employees. “As long as funding is not

ment. If a company can give some thoughts to the green

a major issue, they would give more consideration tofactor when developing its business, say building asocial factors when investing in infrastructure, equipment

green roof, it is doing a ‘small good deed’, and it is alsoor facilities.” The main color of CHERVON’s logo isa proper way to reflect your value.” This green roof

CHERVON Green, so investing to build a green factory

design actually also brings tangible benefits to CHER-

seems to be the natural choice for the company.

VON. Thanks to the heat insulation function of the turf, the

CHERVON’s Green Power Industry Park

In front of its factory, along the subway from Nanjing

Energy conservation is another important aspect of theclean energy accounted for 32% of the total energy

South Railway Station to Nanjing Airport, CHERVON has

green factory. On its green factory, CHERVON has

consumption by CHERVON’s Green Power Industry Park,

built an impressive landscape belt of exquisite design.

installed a “blue roof”, which is actually made up of solarand energy consumption per RMB 10,000 turnover of the

Covering an area of over 20,000 square meters, the belt

panels. The Green Power Industry Park is capable ofwhole company was only 0.015 tce, ranking among theconsists of 7 theme sections such as Ginkgo, Rose, andgenerating up to 5,300 KWH of electricity per day. The

top 5% in the manufacturing industry.

Camphor, with many species personally selected by Pan

two industry parks of CHERVON altogether can achieve

In 2014, CHERVON built a new factory in its Green Power

Longquan and imported from abroad. Apparently, CHER-

solar power generation of 2 GWH per year.5 There are

Industry Park. As a project built entirely from the ground

VON has spent a fortune on it, and few companies could

solar water heaters in the Green Power Industry Park to

up, it gave CHERVON the opportunity to fully implement

boast a landscape area of this scale. CHERVON has also

provide 190 tons of hot water for the dormitory and dining

its environmental concepts in the design. Liu Yi, whobuilt other landscape areas that are equally impressive.

hall. The whole park is also illuminated by 94 street lights

oversaw the construction at that time, was very proud of

Inside the Green Power Industry Park alone, the greeneryat night and 66 sets of daylighting devices indoor, all

the factory: “I applied my decades-long experience to thecovers more than 151,000 square meters. According topowered by the clean solar energy. Beneath theconstruction of this factory. In February 2018, it was

Liu Yi, these are not just “social causes for a better

landscape belt, there lies another secret “weapon” thatrecognized as the only national-level ‘green factory’ inenvironment”, they match perfectly with the main

CHERVON utilizes to save energy—the ground source

Nanjing. In addition, it has also won titles like an ‘intelli-business of CHERVON. Outdoor power equipment, as theheat pump. The pump system uses the mid-temperature

gent factory’ and ‘smart workshops’ at provincial andfocus of CHERVON’s business, needs continuous testingzone underground as the heat source for winter and themunicipal levels.” In the latest phase of the industry parkand improvement during product development. Different

cold source for summer, so that all workshops in theconstruction, CHERVON intended to use rainwatertypes of vegetation, such as bushes, grasslands, andfactory are kept warm in winter and cool in summer. Whilecollected from the roof to create a river: “While we weretrees, are indispensable for product performance tests.

reducing operating costs, this system also helps to cut

designing phase 1 of the project, we had already reserved

Therefore, the landscape areas serve as the naturalcarbon dioxide emission by 839 tons per year.6 In additiona place for rainwater collection.” Liu Yi said frankly that

testing fields for CHERVON’s products. In this way,

to green infrastructure, CHERVON is also certified by the

CHERVON did invest heavily in landscaping andenvironment protection, CHERVON’s business and

GB/T 23331–2002 and ISO 50001:2011 energy manage-advanced technologies for the new industrial zone, but heproducts, and the company’s view on factory construction

ment systems, and it has joined Wal-Mart’s initiative toadmired the shareholders’ vision and their commitment toare harmoniously integrated.

eliminate 1 billion tons of emission in the long run. In 2018,

R&D center is warm in winter and cool in summer, so its
air conditioning system alone saves 20%–30% of energy
consumption, or 3,500 liters of fossil fuels per year.3 The
turf only needs watering by rainwater and costs around
RMB 20,000 for maintenance per year.43
4

CHERVON official website [2019-01-22]. http://global.chervongroup.com/zh/who-we-are/corporate-citizen/environmental-protection.
See endnote 1.

044｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

5
6“Some customers doubt whether we would transfer ourheavy investment in these areas to them through pricing”,
said Pan Longquan with a smile. “However, it has never
happened. Many customers choose us as their long-term
partners because they find that our value is consistent
with theirs. Moreover, we have done the calculation as
well. These one-time big investments in the long run willbring us good returns.”

Make decisions with a long-term plan,and ultimately you will be rewarded.

See endnote 3.
See endnote 3.

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜045

Creating a New Image of “Made in China”
Strategic Partnership Calls for Deeper TrustHigh Attention to Employee Benefits

The establishment of a joint venture with Bosch marked adeeper trust in each other.” Finally, it turned out thatIn 2014, CHERVON acquired the famous German tool

Pan Longquan found that he had learnt a lot from dealing

big step forward for CHERVON’s globalization. But, there

CHERVON did not lose the opportunity to join hands withbrand Flex. CHERVON communicated with the tradewith the trade unions of foreign companies. For many

was an issue when the joint venture was to be formed.

Bosch and in return earned a good reputation and respect

union of Flex as soon as possible of this acquisition,

years, many small and medium-sized companies in China

CHERVON at that time had prepared for several years forfor itself. At that time, people did not think highly ofalthough this was not a necessary procedure. Then on the

did not pay the “five insurances and pension” for their

the launch of its own brand DEVON before Bosch

Chinese companies. Foreigners tended to have biased

first day after the acquisition was completed, Pan Long-

employees in full. “Bosch is a typical example of multi-na-

suddenly proposed the joint venture. Should CHERVON

views on Chinese businessmen, thinking that they werequan gave a speech at the staff meeting. According totional companies. It does things in full compliance with

let Bosch know the plan for its self-owned brand? Thererather slippery and self-interested. CHERVON’s transpar-him, in the first 365 days after the acquisition, any opera-

rules and regulations. Compliance is the golden rule forwas the risk of losing the opportunity to partner with thisency convinced Bosch that it was an honest andtional difficulties should be his responsibility rather thanthem.” CHERVON quickly learnt from their international

global leader in the industry. However, Pan Longquan

trustworthy partner, and CHERVON’s own brand actually

the employees’, so no one would be laid off due to perfor-

counterpart and started to pay all the social benefits anddisclosed it to Bosch without any hesitation. “The joint

was viewed favorably as a bonus to the joint venture.

mance issues, and there would be no conditions attachedpensions in full for its employees. Chinese manufacturers

venture is not a simple business, but a long-term real

According to Bosch, the brand plan reflected CHERVON’sto this promise. CHERVON fulfilled its promise by the end

mostly use assembly lines in production to reduce costs

strategic partnership, so I have to let you know thatwell-grounded vision both for itself and for collaborationof the first year. In this German company that had experi-

and improve efficiency. However, working at assembly

CHERVON is not content with only OEM production.

with external parties. Today, after 10 years, DEVON has

enced turbulence and changed hands several times,

lines is boring and not conducive to employees’ overall

Rather, we have our own brand development plan. The

become a main competitor of Bosch products in theemployees were ensured job security for the first time. In

development.

brand will only target at the Chinese market, but it will be

Chinese market, but the two companies still maintain a

2018, Pan Longquan made another speech, but this time

German “artisan system” to improve its production

launched soon.” In Pan Longquan’s eyes, “In thegood competitive yet cooperative relationship.

he offered his promise with two conditions: (1) Despite

method. At some production lines, employees work instill unsatisfactory business performance, as long as

small teams and everyone can make a relatively complete

there was continuous improvement in business develop-

product on his or her own. Work thereby becomes morement, manufacturing activities would be maintained infulfilling and interesting, which also lays the foundation forGermany since “made in Germany” was something that

product customization on a large scale in future. Of

German employees were proud of; (2) CHERVON would

course, care for employees is more than that. CHERVON

not take away profits made in Germany, but keep themhas built new dorms where every room is equipped withthere for long-term local business development. These

two standard beds, two washbasins, two toilets, a solar

commitments completely dispelled employees’ doubts

water heater, air conditioning, etc., far better than theand uneasiness about “being sold to a Chinese compa-

condition of most residences for university graduates.

ny”. CHERVON won the trust of both the employees andThere are also basketball courts and badminton courts inthe local community.

the dormitory area. Within the landscape belt, there arebusiness world, strategic partners need to develop a

Therefore,

CHERVONborrowed

thetables and chairs for employees to relax outdoors andhave barbecues.

No matter whether employees express theirneeds through established or unstructured
channels, their interests need to be properly
considered by business owners.

The green roof of CHERVON’s R&D Center

046｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜047

Adhering to the IDEA Concept tobe a Responsible Corporate Citizen
In the lobby of the CHERVON R&D Center, there is a

The word mentioned most often by Pan Longquan islandscape decoration that echoes with the “square“responsibility”. Although many people joked with him

Heaven and round Earth” theory in Chinese culture.

that he could “live on his success for the rest of his life”,

Consisting of images of lofty mountains and gurgling

Pan Longquan saw himself differently. He still works till

fountains, the decoration is reminiscent of the meaning ofvery late every day, and instead of the sense of accom-

the company’s name in Chinese (the Chinese name of theplishment, he feels more the sense of responsibility. He

company literally means “fountains and peaks”—thealso expressed the same view on CHERVON. “As atranslator’s note). On the wall leading to the office arealeading player in our industry in China, we have respon-

carved the words “Integrity” “Diligence” “Enthusiasm”

sibilities to assume for our products and our employee

7and “Aspiration”. They stand for CHERVON’s IDEA

welfare system. We must fulfill these responsibilities

concept and its values. The “first lesson” preached tostep by step based on our experience and capabilities.

CHERVON employees about the company’s culture is “toWe shall not only always make good products, but also

be honest in doing and prudent in thinking; no pain, no

create a development path for our customers, employ-gain.” Talking about the slogan “Better Tools, Better

ees, and all stakeholders that can create long-term

World”, Pan Longquan is full of pride. “This is thesynergy and multi-win outcomes.”

business philosophy of our company. It is the result of
discussion by everyone at CHERVON, including foreign
employees, so it reflects the value of our entire staff.”
Full participation by employees has always been encouraged at CHERVON. It is also reflected in the company’scharity activities. In 2013, CHERVON launched a “Charity
Run”. Unlike direct donations of money, a Charity Run
requires employees to raise funds by the distance they

As a manufacturing company, we have to think
long-term for our development. Never besatisfied with what we have or what we can dotoday. Don’t just look at immediate gains or ourown gains. A company can only thrive in thelong run if there’s co-development andbalanced interest for all of its stakeholders.

Pullman Kaifeng Jianye Hotel

Jianye Group:
A Corporate to the Society is Likea Tree to the Earth
Yuan Mei, Marketing and Communication, CEIBS

run. In the past five years, the Charity Run has raised

Though already in his sixties, Mr. Hu Baosen, Chairman ofon how developed the enterprise is. When the company

RMB 869,618 in total to support public welfare projects

Jianye Group (also known as Central China Group), still

was small in its size, its goodwill can only benefit a small

like construction of wells in drought areas in West China,

lives his life at the pace of an entrepreneur starting a newgroup of people. Now Jianye hires close to 20,000

reconstruction of schools in the earthquake-stricken

businesses. The night before his interview, he arrived at

employees, and its “circle” is bigger, and the sphere of its

Ya’an area in Sichuan, and the Spring Bud educational

home past 11 p.m. Yet this morning, he shows up in his

influence also has increased. Upholding the core value

aid initiative in northern Jiangsu province. Apart fromoffice at 9 a.m. to do the interview, after which he will

relentlessly for 27 years is not an easy thing for a company

actively advocating more CHERVON employees to joinhead out towards Jianye Football town at 10 a.m. He

that is fast developing and evolving. For Hu Baosen, thethe Charity Run and challenge themselves, CHERVON

says, “Jianye’s development can be seen as the draw-

one who is responsible for steering this company, he is

has also organized volunteer groups to travel to northerning of a circle. The center of the circle is our core values,

indeed grateful for this era and the fortune that comes

Jiangsu province and provide on-site support to theand how big the radius of the circle is will be deter-with it, which allows Jianye to grow into a frontrunner in

educational aid initiative. Many employees have brought

mined by our capability. The boundary of the circle

its trade, but in the meantime, he also cares a lot about

their children along in the hope that the philanthropic

represents the extend of our market, industry, and more

what legacy Jianye can create to benefit the central China

spirit could be passed down to the next generation.

importantly, our social responsibility. We are always

and all the people in Henan province.

8

trying to make the circle bigger, to push its boundaries
further.”

Charity Run

78

CHERVON Group: From “Integrity” to “Improvement”, Creating a Better World. YOLO, 2017-11-29 [2019-01-22].
ibid.

048｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

Founded and headquartered in Henan province 27 years
ago, Hu Baosen always walks the talk to be a constructor,“Rooted in central China, benefit the general public” has

who starts with the goal of building a good neighborhood,

been the core value that Jianye enshrined since its estab-then the aspiration of “good housing for everyone inlishment. According to Hu Baosen, “benefiting the general

Henan”, and then the vision of “good living and wellbeing

public” is, in itself, an enterprise’s responsibility. The

for everyone in Henan”.

method, capacity and result of it could vary, depending
CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜049

Hu Baosen
CEIBS CEO 2004 Alumnus
Chairman of Jianye Group

Founded by Hu Baosen, Jianye Group now has business-

Hu Baosen, together with Wang Shi and several otheres that spans across 18 prefecture-level cities and 77

entrepreneurs, started the charity organization SEE. Now

county-level cities in Henan. Its accumulated tax revenue

within SEE’s Henan Center, Hu found the people who canreaches 24.1 billion RMB, ranking the first among the top

be the future leaders of this organization. Hu Baosen

10 regional real estate companies for 10 consecutive

gathered Henan entrepreneurs together and founded theyears. Jianye has been actively living up to its corporate

Mount. Songshan Club, a chamber of commerce thatsocial responsibilities. Hu Baosen says his “Chinese

aims to support and promote the younger generation of

dream” is to advance from 100 projects to 1000 commu-

Henan entrepreneurs. Songshan Club’s guiding principle

nities, from contributing billions RMB in tax revenue tois “create wealth with integrity, live as a moral model, carebeing the number one taxpayer in Henan, from creating

for society”, and it encourages Henan entrepreneurs tohundreds of thousands jobs indirectly to serving tens ofunite together and take on their social responsibilities.

millions of people directly. His dream is coming true. As

Among the members of Songshan Club, there are two

the saying goes, as long as you can dream it, you can do it.

young entrepreneurs who were born in the 1970s. One is

The values and development philosophy held by an entrepreneur can well determine the fate of an enterprise.

Corporate Value is the Core of
Corporate Social Responsibility
Committed to drive the urbanization and comprehensivesocial advancement in central China, Jianye is using realestate development as an anchor to carefully andthoughtfully map out an environment where people inHenan can live happily. Jianye’s responsibility grows andevolves. High quality residential buildings, boutique
hotels, pastoral complex, towns with special characteristics, etc. These are changing people’s stereotyped bias
against Henan. As Hu Baosen pointed out, “a corporate
to the society is like a tree to the earth.” You are rooted

Entrepreneurs are the ones who drive the progress in thesociety. Their actions will decide the costs and final
allocation of resources. The most precious things that
entrepreneurs can contribute to the society includes asense of mission and responsibility, belief in innovation,and the determination to make break-throughs. According to Hu Baosen, “how many hearts do you win overtime

that? Because in the autumn, fallen leaves from those
trees which turn into fertilizers. When spring comes,
those trees will have enough nutrition to grow andthrive. Enterprises are likewise. They make profits anduse social resources. And they pay the society backthrough CSR activities. This process is just like how
trees grow new leaves by absorbing nutrition from theirfallen leaves that nurture the soil in return.”

once said that “Half of the history of China is about thehistory of Henan”. Hu Baosen believes the central China
culture is an indispensable part of the Chinese culture. In
Henan, the 3000 years of civilization had been continuousand never interrupted. We need to think about what we
can do, as people local to central China, to preserve theheritage our culture.

who is also the Chairman of SEE Henan Center. The other“Only what’s cultural can become what’s classic”. Overis Wang Gang, Chairman of 1 Plus 1 Flour and director of

the past decade, Jianye Group made investments into

SEE Henan Center. Hu Baosen says, “It is our responsi-

many culture restoration projects regardless of thebility and obligation to make sure that new generations

prospect of financial returns.

of entrepreneurs don’t lose sight of the importance ofcharity work and being able to pass it on from genera-

Committed to promote new type of urbanization andtion to generation. The two have done a very good job,social advancement in central China, Jianye invested overand they are very committed to the cause.”

3 billion RMB in the restoration project of ancient Kaifeng
city, and presented the property named “GorgeousDream in East Capital” after ten years of development.

Baosen also made personal contributions to charities andThis property is a model project for ancient town resto-

fact that, wealth cannot buy health, or happiness, or

has set a good example for Henan entrepreneurs. His

ration, and will play a huge role in preserving the history

respect. We need to draw a line between what we canaccumulated personal donations exceeded 100 million RMB.

and heritage of Kaifeng and ushering in a new phase of

do and what we cannot do. If you across that line, youurban development.

give up your integrity and dignity.”
According to Hu Baosen, Jianye aims to develop 15
tion is the background color for the central China cultural.

have big leaves, or a great number of leaves. Why is

ing Committee of Henan Province People’s Congress,

creating wealth, entrepreneurs must bear in mind thegive back to this piece of soil that nurtured you.

He observed that, “for trees that grow fast, they either

tary of Henan Province and the director-general of Stand-While leading the Jianye Group to repay the society, Hu

Henan is a big agriculture province. Agricultural civiliza-

relationship between business and social responsibility.

Mr. Xu Guangchun, who served as the CPC party secre-

will determine how successful you can become. While

here, growing here, and more importantly, you need to

Hu Baosen made an apt analogy that vividly reflects the

Du Zhongbing, Chairman of Banu Beef Omasum Hotpot,

Building the Platform for theCentral China Culture Heritage

Even people local to this area have doubt about whether

EconomicResponsibility

Legal
Responsibility

this is a place that can nurture large enterprises. Hu

commitment and support for this part of China. His deter-and showcased. In Luoyang, Jianye developed a peony
town with peony flowers as the signature of the town.

mination is a message to many who want to start a new

inspired you in the first place, your determination will leadplanning. Jianye already developed a traditional residence
houses with local Henan architectural style were collected

Corporate
Value

Henan for the past 27 years is his way of showing

long as you aim at the right direction and stay true to whatsome are already under development and some are under
town in Xuchang, where dozens of ancient residential

Baosen admits that, insisting on operating his business inbusiness, or in the process of starting a new business: as

towns with central China cultural elements, among which

Each town has its own signature element, and each town

EthicalResponsibility

Philanthropic
Responsibility

is a showcase of central China culture.

you to a fruitful conclusion. He believes his biggest
influence to this region is the championing the spirit of“aiming for excellence, achieving success through perseverance”.

050｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜051

Alignment of Economic Benefit and Social Benefit
Hu Baosen believes that many cultural programs lackHe said: “Since Jianye established its provincial andcontinuity or longevity because they fail to align economic

regional development strategy in 2001, I spent the past 18

and social benefits. He says, “We have been exploring toyears building our ‘base camp’. The goal is to expand ourfind a business that highly aligns economic benefits withbusiness to cover all the 120 county-level and abovesocial benefits. The reason is, economic success serves

cities in Henan by the end of 2019. That was the time weas the foundation for corporate social responsibility andspent building the base camp and moat. Now our capaci-

cultural heritage preservation. Without solid financials as

ty has grown, and so did our reach. Henan is adjacent toa foundation, cultural projects alone can’t achieve signifi-

seven provinces. Our current market borders on thesecance, nor sustainability.”neighboring provinces. In the next three, five, or even ten

Every town that Jianye developed has its own profit
model. Hu Baosen quoted Xuchang Yanling’s pastoralcomplex as an example. Yanling is both a sightseeing
destination featuring modern agriculture experiences, andthe nighttime view at Jianye property in Kaifeng “Gorgeous Dream in East Capital”

a poverty alleviation project. September last year, theIn 2017, the model area of “Shenhou Heaven and Earthwas launched in Yanling green camp. Under the guideline

Project” in Xuchang was opened. This project is devel-of “discover, inherit and promote central China culture”,

oped to preserve and promote the local porcelain making

by driving growth throughout the food industry, Jianye

culture, and properties are designed to imitate the ancient

Dining Hall promoted industrial upgrading and createdarchitectural style and reflect the thousand years of history

wealth for the rural area, preserved traditional cuisine asof Shenhou town. September 2017, Jianye’s Daji Ancient

intangible cultural heritage, and achieved great economic

town in Puyang was officially open for visitation. Also,

returns and created many jobs.

with thousands of years of history, Puyang Daji is speciallyknown as the hometown of Dongbeizhuang acrobatics.
This town is revitalized thanks to the restoration anddevelopment work by Jianye. October 2017, Jianye
joined hands with famous director Wang Chaoge andlaunched “Only in Henan: A Whimsical Drama Town” inZhengzhou, with an expected investment of 5 billion
RMB. On September 28th 2018, Jianye Football Town was
officially opened and during the following Octoberholiday, it welcomed over 200,000 guests. During the
Chinese New Year holidays in 2019, its attendanceexceeded 500,000.

According to Hu Baosen, Jianye sought after time-honored shops across over 100 counties, and invited thesefood retailers with decades or even hundreds of years ofhistory to operate at the Jianye Dining Hall, which is now
home to over 800 different types of delicacies. And tosupport these shops, Jianye waived their rent and provided them with accommodation. Operating here also gives
these time-honored brands a chance to pass the heritage
onto the next generation. Young apprentices are hiredfrom school to learn the trade. As an example, one shopthat specializes in making baked wheat cake has opened
five stores on Jianye’s different properties. As Jianye

Besides developing and presenting central China towns

helped them to preserve the trade and the legacy, theirwith local cultural elements, Jianye is also preserving andbusiness is also expanding. In the future, they can expand

communicating culture through local cuisine.

with Jianye to other provinces like Hubei, Shaanxi,

Leveraging the development of modern agricultural
pastoral complex, the Jianye Dining Hall is dedicated tocreate “the living room of Henan people, the place to geta taste of Henan”—a marketplace of local food andsnacks. In 2015, the very first Jianye Dining Hall project

town was certified as a 4A-level tourist destination issued
by the National Tourism Administration, which granted
this town the eligibility to sell tourism tickets. In 2017, theyears, our goal will be expanding our base camp to coverthose provinces. From 2019 onwards, we will bring ourcentral China cultural towns to more places as our market
expands. Maybe five years later, you will see towns showcasing central China cultural elements outside of Henan.
Jianye has assumed the social responsibility of passing
on the cultural legacy of central China, and our social
responsibility expands as our business broadens.”

Dining Hall situated in the complex reached a total

Specifically, with Zhengzhou as the center, the radius ofrevenue of 23.5 million. Other attractions include the

Jianye’s sphere of influence may be extended to 500

Orion Vehicle Camp, Kids’ Land, and etc. Visitors cankilometers, covering areas in Hebei, Shanxi, Shaanxi,

also pick fresh fruits, for example grapes and jujubes,

Hubei, Anhui, and Shandong. Hu Baosen is confident infrom farms. Besides, the complex has 500 mu of land for

promoting central China culture and Jianye products,

development and construction purposes, where real

philosophy and values on a larger scale. There are about

estate properties can be developed to fund and sustain

300 million people within this radius, 200 million more

the operation of the town. The traditional residential hous-than the population of Henan. This illustrates how theings are also preserved in this complex. This model notsocial responsibilities of a company grow as its businessonly protects the way of living of the natives, but also

expands.

creates multiple profit streams. This business model
identified by Jianye is an effective way of inheriting thecentral China culture. It is self-sustainable, generates
enough revenue to support its operations, and it serves asa platform to export culture, standards, and lifestyle.
Hu Baosen believes every enterprise shall have its “basecamp”, or as some experts put it, to have a “city moat” toprotect its business. Without a solid base camp, exploring
the outside world will not bode well.

Shanxi, Shandong, etc. Besides food brands, other
Henan cultural heritage, like acrobatics, martial arts,
opera, will all “go national” as Jianye expands. Throughthe platform created by Jianye, central China’s culture will
be presented and enjoyed by a much broader audience.
Zhengzhou Hanghai Stadium

052｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜053

Jianye Football “Fight for Love”
When the name Jianye is mentioned in Henan, people will

In 2018, Jianye Group launched the “Jianye Cup: Fight for

immediately associate that with football. Jianye’s invest-

Love” five-on-five football championship in Henan. The

ment in Henan Football Club started 25 years ago, andchampionship is a combination of sports and charity.

with nearly 3.8 billion RMB of investment, Henan Jianye

Together with Henan Provincial Charity Foundation,

Football Club became the “one and only” in three

Jianye donated nearly 10 million RMB. While bringing

aspects: 1) It is the one and only professional football club

exciting football games to the people in Henan, theyin Henan Province, China’s most populated province; 2) It

leveraged the opportunity to donate football fields to 26

is the one and only professional football club in China that

schools in poor areas, making football more accessible

has never changed its naming sponsor; 3) And it is the one

even in poorer areas in Henan.

and only Chinese professional football club under the
football league that owns a football court to host games.
The rise of central China represents the overall rise of its
political, economic and cultural importance, and thesports industry is just one of the important drivers tostrengthen the cultural industries. Jianye football is an
important cultural symbol of Henan and has won honor
and respect for Henan.

President Xi Jinping has expressed his three wishes:
China gets to play in the World Cup finals, China hosts a
World Cup tournament, and China wins the World Cup.
Hu Baosen believes that the realization of these wishes
will take 50 years, or 30 years at the quickest. To makeContributions to Henan over the 27 Years

these happen, efforts should be made at the basic, grassroots level, to cultivate the culture among younger generations. Therefore, Jianye Group donated football fields to

Hu Baosen believes football is more than just a game.

26 schools in poverty-stricken areas in the first round of

Besides teamwork, hard work, positivity and happiness, it

donation. By doing so, Jianye not only helped with theis also a reminder of Jianye’s 27-year dedication. It

poverty alleviation, but also made the sport and therepresents the kind-heartedness and unyielding spirit ofhappiness it brings more accessible in rural and poor

Henan people, and how Jianye pursues excellence withareas.

patience and perseverance.

Diversification

Tax contribution

Since its establishment in 1992, Jianye has been uphold-In 2018, Jianye Group reached a total sales revenue ofing the corporate culture of “truthful and trustworthy,

81.2 billion RMB, a 97% increase compared with 2017,

responsible, doing business the right way” and theranking first among the top 10 regional real estate compa-

business strategy of provincial and regional development.

nies for 10 consecutive years. In 2018, Jianye’s tax contri-

With 27 years of cultivation, Jianye group formed thebution reached 5.4 billion RMB, ranking among the top

structure with four major companies: Jianye Residential

taxpayers in Henan’s property development industry. Its

Property, Jianye Capital and Investment, Jianye New

tax contribution has been growing over the years, and its

Lifestyle Services, and Jianye Development Holdings,

accumulated tax contribution now stands at 24.1 billion

with their business scope covering 12 segments: real

RMB.

estate, property management, education, hotel, football,commercial, culture and tourism, finance, science andtechnology, travel, Junlin Club and modern agriculture.
By the end of 2018, Jianye’s business has covered 18
prefecture-level cities and 77 county-level cities. It has
found a path of new urbanization development, and has
been promoting low-carbon, eco-friendly, high efficiency
in urban management, business operation, production
and way of living.

Jianye Cup

Fight

for

Realize corporate gains andpersonal gains
Jianye Group hires nearly 20,000 employees. The averageage of Jianye employees is 33, and females account for
40% of the workforce. As one of the biggest employer inHenan, Jianye was awarded with the “Best Employer inCentral China” “Outstanding Employer” “Excellence Award
for Human Resources Management”, etc. Talent is thefoundation for innovation and development. Jianye Groupestablished a system of business diversification andLovetalent nurturing, integrating face-to-face coaching, online
lecturing, mentoring and on-the-job training. Every year,
we provide tens of thousands training sessions, and 75%
of our management are internally promoted.

054｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜055

A Long Way to Go to Become a Great Company
Forward-looking companies are more interested inday. If Jianye wants to become a great company, it needs

becoming long-living enterprises, rather than superstar

to make its employees see work as something pleasantcompanies. In the past 20 years, the list of China’s top

and enjoyable. Long hours would not be unbearable, and100 housing companies has been reshuffled again andemployees will be happy about achieving business goals.

again, and 90% of the names that was on that list 20

Being a great company is still something way ahead of us.

years ago are no longer there. Jianye Group has been on

Corporate values represent what we believe in and staythat list for 10 consecutive years. Hu Baosen knows thattrue to. History and experiences gives our brand greater

being top 100 is not a guarantee of strong overall capabil-value.”

ity. Only by operating steadily, assuming social responsi-

This year, Hu Baosen has set a “100 billion strategic goal”

bilities and working closely as one team can Jianye

for Jianye. He says the most precious quality about entre-

achieve sustainable development.

preneurs is how they never settle for temporary achieve-

Hu Baosen believes that to be called a great company, ament. “I am learning from the greatest entrepreneurs,

company needs to possess the following traits: create

both home and abroad. And it’s really not the time for meboth economic and social benefits, pursue both material

to feel good about myself, because I know I’m not where

and

they are yet. I’m still very far away. How can I rest?”

spiritualvalues,harmony

betweencorporate

First Respond®:
Sparking Universal Mutual Aidin Emergencies

interests and employee interests, and an alignment
between strategic objectives and executions.
“When I rate Jianye, the score I give never exceeds 70,”
says Hu Baosen, “employees of Jianye are still working

Monph
Apartment

too hard. They have to work 10 hours or even 12 hours a

CentralChina-Oriental
PatronJianyeTongbao
RewardPointsJianyeEducation

BenyuanAcademyCentralChina

Commercial
Real
EstateCentralChina
Real
EstateCentralChina
TravelQian Wenying, Case Center, CEIBS

JianyeProperty

JianyeFinancial
Leasing

JianyeJunlinhuiService
Platform

iHome
Furniture

Zhishang
ServiceFirst Respond®, founded in 2012 by Lu Le, is a social enterprise dedicated to delivering first aid training and life support

JianyeFootball

Golf
CourseYi JiaApp

Jianye+SongshanTechnology

Happy Life
Ecosystem

JianyeHotel
IVIMOVIE
1895

Film
Town

JianyeCulturalTourism
Uniquein
Hena

JianyeGreen
Base

JianyeFootballAppbeen saved? First Respond® is one of the first certified social enterprises in China. A social enterprise is an organization thatapplies commercial strategies to resolve specific social problems in a sustainable way. First Respond® hopes to address
without relying on donations. Since its inception six years ago, First Respond®, thought being short of hands and capital,
has been committed to improving social awareness towards emergency rescue and popularizing first aid training by
empowering more partners and mobilizing more and bigger social resources from volunteers, governments, companies,

Songshan
E-Payement

NGOs and media. As of the end of 2018, First Respond® had successfully provided its services to 306 marathon events at

RusticLuxuryTent Hotelhome and abroad with the joint efforts of nearly 30,000 volunteers, with 15 cases of cardiac arrest rescued and a world
leading rehabilitation of 93% achieved. In the meantime, it had trained over 2,000 instructors in more than 20 cities across

Ruida
Engineering

the country, who, in turn, had delivered safety education classes to nearly 200,000 children.
Houpu
JianyeFund

Songyue
Assets

Houde
GardenJianxiang
Decoration

Mehos
Incubator

the shortage of public emergency resources through business innovation and attain self-sufficiency and sustainability

MotorhomeCampground

JianyeFinancial
Leasing

JianyeFood
Plaza

CEIBS. This sad incident has directly contributed to the creation of First Respond®. The tragedy was a big shock to CEIBS
alumni, and everyone was thinking: if someone who had received the first aid training was on site, could the man’s life haveYi JiaCommunity
Service
Station

OfficeBuildings

SongshanGenqinCulturesolutions. A runner who died of sudden cardiac arrest during the Gobi Challenge was a former schoolmate of Lu Le at
Smart
Home

Smart
Community

JianyeHolding

JianyeDevelopment
Holding

STI
Fund

1
2

Jianye Group, Jianye Holdings Corporate Social Responsibility Report (2018).
Gao Yunlong, Xu Lejiang, Xie Jingrong, Chinese Private Companies Social Responsibility Report (2018).

056｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜057

Origin:
Small Team, Big Dream
Founded in 2012, First Respond® is a social enterprise
dedicated to delivering first aid training and life support
solutions. It became one of the first certified social enterprises1 in China in 2015 and the first certified B Corporation2 in Mainland China in 2016. Apart from being the only
social enterprise in the world today that is certified both in

Lu Le

profound silence prevailed all over. Under the dim street
lights was an empty ground, which, however, soon got
crowded with people wearing orange-colored uniforms.
They were registered volunteers of First Respond®

er with eleven partners. Seven of the founding members

big shock to CEIBS alumni, and everyone was thinking: if

are MBA and EMBA alumni from CEIBS. Ms. Sissi Chen,someone who had received the first aid training was on

CEIBS alumna (MBA 2010) and Chair of CEIBS Alumni

site, could the man’s life have been saved? To prevent theEnterprises Corporate Social Responsibility Forum/Club

tragedy from happening again, the acquisition of emer-

was one of the earliest investors; another founding

gency rescue knowledge was put on the agenda among

member Mr. Lu Jun won CEIBS’ full scholarship for MBA

CEIBS alumni. Lu Le, an AHA licensed first aid instructor,

students and previously worked for two Fortune 500

was then invited frequently to provide first aid training.

companies. Like Lu Le, they all started as active volun-site by American Heart Association (AHA).

of part-time members and volunteers. As the demand forthe company. Xuan Zang Road Gobi Challenge for

Shanghai was still bathed in the moonlight and aformer schoolmate of Lu Le at CEIBS. The tragedy was a

The initial first aid team led by Lu Le was largely composed

A sad incident has directly contributed to the creation of

It was four o’clock in the morning. The entire city ofWith these beliefs, Lu Le founded First Respond® togeth-

China and the US, it is also the largest authorized training
CEIBS EMBA 2007 Alumnus
Founder of First Respond®

The runner who died of sudden cardiac arrest was a

Business Schools has been an annual event participatedfirst aid training kept increasing, Lu Le was determined toturn this part-time activity into a full-time undertaking andbuild First Respond® into a real social enterprise.

by EMBA students from business schools in China to

A social enterprise is an organization that applies commer-

promote “ideal, action and persistence”. But a tragedy

cial strategies to resolve specific social problems in ahappened during the qualifying match for Gobi Challengesustainable way. Originating in Britain, social enterprises

in 2012—a runner died of cardiac arrest due to lack of ahave been regarded as a form of self-redemption oftimely rescue.

capitalism, shedding light on religious ethics. But whenmany enterprises for profit maximization increasingly

teers of emergency rescue activities. Besides, Lu Le alsoenriched his team by involving some specialists in medicine, psychology and pedagogy, such as the Doctor in
Educational Psychology from East China Normal University and the Chief Physician from Ruijin Hospital.
To increase their professionalism, Lu Le brought his teamto Japan, the U.S. and Europe, where the practice of firstaid is more developed, to learn from the best local rescue
service providers, research institutions, and rescue
standard developers. With persistent efforts, First
Respond® became the only first aid training agency
holding both ISO 9001 and ISO 20121 certifications incoming together from every walk of life and every corner

A cardiac arrest is when a man’s heart suddenly stopsof the city for the annual Shanghai International Marathon

pumping. Without being rescued in time, a cardiac arrest

to be held during the daytime. They would respectively

victim may suffer from irreversible brain damage and evenact as medical officers, patrol responders, first aid

lose his/her life only in a few minutes. However, his/her“rabbits”, commanders on the commander vehicle, risk

survival rate can be greatly increased if someone on site

officers, photographers to keep medical records, as well

gives CPR (Cardiopulmonary Resuscitation) and mouth

as personnel for media and logistics support. For the sixth-to-mouth respiration, and use an AED (Automatic Exter-

As a public welfare undertaking not for profit maximiza-

the correct method to use an AED through 6–8 hours ofconsecutive year, the First Respond volunteers had played

nal Defibrillator) properly within the “golden four minutes”.

tion, First Respond should achieve self-sufficiency nottraining sessions in total.

an active part in protecting the safety of marathon

In China, there are more than 540,000 occurrences ofby donations but by business operations; it can address

runners. In these six years, First Respond® had success-cardiac arrest each year, which means in less than 1

the shortage of public emergency resources throughfully provided its services to 1,340,000 runners in more

minute someone will collapse as a result of cardiac arrest.

business innovation, use the earnings to support the daily®

than 300 marathon events in over 40 cities at home andabroad, with 15 cases of cardiac arrest rescued.

Unfortunately, the cardiac arrest victims are often left
unsaved because most people in China “do not have thebecame the culprits or accomplices of numerous socialand environmental problems, Lu Le and his partners
wondered whether they could leverage the positive powerof business to address social problems. The creation ofFirst Respond® was such an attempt.

rized by AHA in Mainland China. While delivering AHA
certified Heartsaver® courses, First Respond® has independently developed core courses for first responders,which can help them acquire high-quality CPR skills and®

operations of the first aid team and reinvest in the penetration of first aid training.

China and the only gold-standard training center autho-

Different from the CSR practiced by other enterprises of
CEIBS alumni, First Respond® was born for fulfilling social
responsibilities, despite the fact that it is a small businesswith limited resources.
By the end of 2018, the six-year-old First Respond® had

First Respond CEO Lu Le, a bald headed man, wascourage, ability and willingness to give a helping hand”.

Commander in Chief of this life-guarding activity. He

When witnessing such an emergency case, most people

arrived early and waited for the volunteers to meet at 4:15.

may feel lost in their minds. Since few of them have

Seeing more and more volunteers with orange vests show

received any first aid training, they don’t know how toup, lighting up the surrounding darkness around them, Lu

take any first-aid measures. They are also least motivated

The answer can be very simple. In the eyes of Lu Le, FirstLe recalled the initial purpose of starting a social enter-to do so as China still lacks in relevant laws to protect

Respond® is open to any individual, enterprise or organi-prise like First Respond® with his partners in 2012—individuals who offer first aid assistance. Due to limited

zation that voluntarily contributes to the public emergency

increase the penetration rate of first aid and the survival

presence of first aid, the survival rate of cardiac arrest in

rescue services. By sparking universal mutual aid inrate of cardiac arrest victims in China.

China was less than 1% at that time.

emergencies, the survival rate of cardiac arrest can be®

only about 50 full-time staff members. How can such asmall team tackle such a big social problem and makesuch a big dream come true?

increased from less than 1% to 90%......
A social enterprise pursues not the profit maximization, but solutions to social issues and improvement of public welfare. It follows a business model to operate
and acquire resources. Investors won’t be paid dividends after their investment is recovered. All earnings will be reinvested in business or community development.
2
Launched by the non-profit organization B Lab, B Corp Certification aims at redefining business success, i.e.to make enterprises “exist for a better world.”
B Corps care about the interests of not only their shareholders, but also their employees, suppliers, communities, consumers and environment. Since 2006, morethan 1,800 enterprises from 130 industries in 50 countries have been certified as B Corps.
1058｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜059

Marathon:
Small Step, Big Impact

First Aid Training:
Tailored Courses for Children

Where and how to start the first step is very critical. Dueevery 1–2km in most domestic marathon races, FirstChildren’s safety has also been a big concern for theit when we have time.” It was until an unexpected death of

to limited resources available, how should First Respond®

Respond set up a station every 100–500m. Once a firstwhole society. As incidents threatening campus safety

a student happened on campus that many school leaderstake advantage of external conditions to build up its

responder reports the location of an emergency scene

happening from time to time in recent years, school-widecame to realize the importance and urgency of campus

brand awareness and have more people realize thewhere he or she is present, the emergency response

safety education has drawn increasing attention from thesafety education. If teachers and students had learned

importance of first aid in a short time?

system will be instantly initiated, informing two nearest

Chinese government. Due to a low penetration rate of first

first aid skills, such tragic events could have been avoid-

team members to rush to the scene with AEDs and otheraid knowledge, few teachers, parents and children haveed. Later on, First Respond® sent a group of first aid

first aid devices. A three-person rescue team is thereby

any experience in first aid.

instructors to that school concerned and provided its

In the early days, First Respond® found it difficult topromote first aid among the general public due to lack ofawareness for the importance of first aid. But at the sametime, marathon events started to gain popularity in China,
attracting more and more people’s attention. First®

automatically formed to offer first aid at the earliest possible time, with almost no need for coordination at the backoffice.

First Respond® regards school students as an effective
bridge to enhance first aid awareness. Here is how its

teachers and students with a full-day training session on
basic first aid skills.

plan works: Every first aid instructor trained by First

After this sad incident, First Respond® became more

Respond® then decided to focus on providing safety

With experience drawn from these events, steady

Respond® is responsible for passing on first aid skills anddetermined to make the first aid training an integral part ofsolutions to marathon events so that it could take advan-

progress has been made to upgrade this emergency

knowledge to 100 school students; every student iscampus safety education, and influence a whole genera-tage of the latter’s spotlight effect to increase its own

rescue process. For example, First Respond developed

expected to share what he/she has learnt in the first aid

tion and generate exponential impact by giving safety

brand awareness among the general public.

the First Responder App with the function of GPSclass with his/her parents and grandparents; and theseclasses to students. However, it is impossible for First

positioning. This app enables the commanders, while atadults are expected to further share first aid knowledge

Respond® alone to promote first aid training in all schools

the back office, to have a clear picture of the deployment

with their acquaintances in the neighborhood and work-

across the country. To this end, it has managed to attract

and locations of onsite first responders. As more andplace. In this way, First Respond® takes children’s safety

the sponsorship and partnership of foundations andmore data are collected, First Respondeducation as a starting point to communicate first aid

enterprises including Adream Foundation, China Soongskills, knowledge and actions in a rippling fashion.

Ching Ling Foundation, Shanghai Charity Foundation,

Marathon is one of the sporting events with the highest
mortality of cardiac arrest. One out of every 50,000 to
88,000 runners of a whole marathon race would die of
cardiac arrest during the event .3 The capacity to offer
safety solutions to a marathon race is an indicator of
emergency rescue capability.

orange vests, were invited for the first time by the Organizing Committee of Shanghai International Marathon toprovide first aid services during this event. Tokyo Marathon in Japan has been recognized as the safest
first-class marathon race in the world. By taking theMarathonstandards

asareference,

First

Respond® came up with a self-developed emergency
response process that would be suitable with such events
in China. The process defines and specifies every emergency rescue step: Unlike the common practice of 1 station

Smart Emergency
Rescue System®

developed acomprehensive risk management system integrating
visualized pre-race risk management, timely in-race
operation optimization and post-race big data analysis.

In 2013, First Respond® and its volunteer team, wearing

Tokyo

®

GPS Emergency Rescue
Command Vehicle

Ambulances arrive in 8 minutes
Use an AED in 4 minutes
Give CPR in 2 minutes

In the beginning, First Respond® found it extremely
difficult to persuade school leaders to organize first aid

By leveraging advanced technologies, First Respond®

training courses on campus. Most of them admitted thehas managed to increase its working efficiency to a great

importance of first aid training but often declined it with all

extent despite of a shortage of full-time employees. Its

kinds of excuses while perfunctorily saying that “we’ll docapacity has already evolved from assisting in 3 events ahundreds of beneficiary primary schools of Adream Foundation in dozens of cities across China, as well as nearlya hundred kindergartens, primary schools and middle
schools in Shanghai with the help of China Soong Chingreached over 20 cities, trained more than 2,000 instruc-registered volunteers has increased from 50 to nearlytors and delivered safety education to nearly 200,000

30,000. As of the end of 2018, First Respond® had
at home and abroad, with 15 cases of cardiac arrest

Respond® has managed to give first aid courses to

Ling Foundation. By the end of 2018, First Respond® has

day to 6 or 7 events a day nationwide. The number ofsuccessfully provided its services to 306 marathon events

Tencent Charity and Bosch China Charity Center. Firstchildren nationwide.
One instructor

First Respond® believes these figures represent just a

rescued and a world leading rehabilitation of 93% achieved.

starting point. A one-time training course is far from
sufficient for the popularization of safety education. So
far, First Respond® has been actively cooperating with an• Joint action• Command
platform• Fast response• Decoupled• Precise risk
management• Big datainternational school to develop mandatory safety educaGive first aid classes
to 100 children

Precise data collected from morethan 100 sports events in China
Data of sports events in New York,Tokyo and Berlin
Seamless connection to the systemof 120 Emergency Centers

Every child shares
first aid knowledge
with his/her familytion courses tailored for students of different grade, sothat they can learn more safety knowledge and masterfirst aid skills on a regular basis. If this pilot project canwork well, it may be used as a demonstration case to
draw attention and support of more schools.

The safety of a whole
school is protected
Safety education starting from children generates a far-reaching impact on

3

Survey data from Runners’ World.

060｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

their families and the whole generation

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜061

Media Collaboration:
How to Put This Serious Business on Everyone’s Lips

Support for and by Government
Before the establishment of First Respond®, the pre-hospital

For China’s National Health Commission, first aid in the

As far as First Respond® is concerned, media partners

Another important thing is to communicate the impor-first aid in China used to be mainly the responsibility ofsociety makes up only a small part of its scope of admin-have been playing an important role in spreading thetance and correct practices of first aid in diversified ways

emergency medical centers, which are managed by theistration, which is difficult to be covered by general admin-knowledge and importance of first aid. Since its inception,

through more media platforms. For example, with thegovernment agencies of public health and funded by theistrative resources and therefore requires the participation

First Respond has received generous media support.

support of First Respond®, SMG produced a 12-episodegovernment. In most cities across the country, less thanof social forces. Under the guidance of Shenzhen HealthThrough cooperation with various media across the coun-

documentary about pre-hospital emergency medical

1% of the population was equipped with first aid skills

Commission, First Respond® took the lead to mobilize alltry, First Respond® keeps disseminating first aid knowl-

services—“120 On Call”. This documentary with serious

and knowledge. First aid training was mainly provided bypossible social forces to innovatively set up Shenzhen

edge to the general public, educating people about whatthemes attracted more than 40 million views. In July 2018,

hospitals, emergency medical centers and Red Cross

Social Emergency Rescue Association, develop a first aid

to do in case of an emergency.

First Respond® worked with Yitiao, a we-media platform

associations. There were almost no organizations special-

network among Shenzhen citizens and promote mutual

izing in emergency rescue of cardiac arrest victims. Only

aid before the arrival of ambulances. In the meantime,less than 1,000 registered AEDs are available in publicwith the strong support of local health commissions, First

places.

Respond has been able to offer effective safety solutions

4®

Witnessing the increasing demand of the government to
involve more social forces in social governance andlivelihood service provision, First Respond® has developed a win-win cooperation model for the prevalence offirst aid. On the one hand, it seeks policy and resource

to various sports events and realize seamless connections to local emergency rescue resources including
ambulance fleet and emergency physicians. In this way,
more lives can be saved with limited social emergency
rescue resources.

®

With increasing awareness of their value and responsibility
in promoting social welfare programs, more and more
media, driven by their professional ethics and social
responsibility, become passionate advocates of charity
causes and give more coverage to non-governmental
public welfare organizations and institutions. As one of
the largest non-governmental forces in providing first aid
solutions, First Respond® has attracted much media
attention and is often invited to the designing of public

supports from local governments and government depart-In the past three years, First Respond® has actively

welfare programs. But since first aid is a serious business,ments. On the other hand, it also helps local governments

offered advice and suggestions to the NPC and CPPCC

how would they motivate more people to watch, learn andand government departments solve their pain points

experts, assisted in proposal preparation and facilitatedspread first aid related media programs on their own

based on specific local conditions.

government work in constructing the social first aid

initiative? Both media and First Respond® are striving

network. The efforts of First Respond® in these years were

hard to find out the proper way.

Government departments in charge of civil affairs regard
the provision of livelihood services as a major source ofvalue creation, and are dedicated to building a collaborative and interdependent neighborhood culture. Mutual aid
within neighborhoods is essential to cope with unexpected incidents such as strokes in the elderly, sudden cardiac arrest in middle-aged people or burns or choking inchildren. First Respond can play an important role in®

building such mutual aid communities by sharing its
well-established volunteer team, first aid training systemand emergency response system. In this regard, theparticipation of social forces like First Respond will save®

substantial government funds and public resources while
fulfilling the mission to equip the general public with firstaid skills and build emergency response systems within

officially recognized by the promulgation of the Regulations on Emergency Medical Services in Shanghai in 2016,
which attaches high importance to the participation ofsocial forces in emergency rescue and waives the liabilities of those citizens who offer the first aid in the hope of
promoting mutual aid in the society. As urged by First
Respond® and other relevant organizations and experts,
the availability of AEDs in public places has also been
improved. Local governments in Shanghai, Shenzhen andother first-tier developed areas play a pioneering andexemplary role in increasing the procurement and deployment of AEDs in public areas. As a result, more and moresecond- and third-tier cities follow suit and actively seek
cooperation with First Respond®.

in producing a five-minute video named “Get Five Essential
Survival Skills in Five Minutes!” The video was forwarded
more than 5 million times in a few days, and was evenforwarded on the official websites of Shenzhen HealthCommission, Jiangsu Health Commission, Ministry of
Emergency Management and many local public security
bureaus. A string of programs of CCTV and Xinhua News
Agency have also joined hands with First Respond® indeveloping first aid videos. For example, CCTV News
launched a micro video named “First Aid, You Can Do It”,
and has broadcasted this segment several times. Videos
describing lifesaving skills become the certain types ofvideos that people are most unwilling to delete on theirmobile phones. These videos are shared amongst family
members as a means to convey care.

The first thing is to have the general public be aware ofpossible dangers in everyday life as well as theirignorance of first aid knowledge. In October 2017, First
Respond® and Tencent Questionnaire jointly launched aquick quiz to test people’s first aid knowledge with 5 shortquestions. For each of the following five emergency
scenarios, nosebleeds, burns, drowning, electric shock
and cardiac arrest, respondents are required to choose
the right treatment between two options offered. Thanks
to the wide coverage of Tencent Questionnaire, this quiz
was answered by 39,332 respondents in total from 34
provinces, municipalities and special administrative
regions across China, including Hong Kong, Macao andTaiwan. But only 14% of them gave correct answers.

neighborhoods.

4First aid is the first and immediate assistance given to any person suffering a serious illness or injury outside hospital. In a broad sense, it is the emergency rescue
by medical staff or witnesses on the scene.

062｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜063

Building a Mutual-Benefit Platform
First Respond®, as a social enterprise, has caught notice of more and more entrepreneurs for its ability of value creation. Its
business model was initially designed to maximize the benefits of all parties, including shareholders, customers and thesociety. Many entrepreneurs begin to ask themselves: Is there only a win-lose relationship between companies? Is it possible
to build a relationship of mutual benefit and growth?
The corporate customers of First Respond® cover all aspects of everyday life from entertainment, work and study to travel,transportation, household and sports. By offering workplace safety solutions, First Respond® has managed to enlarge its
cooperation with businesses of various sectors and apply its mutual aid expertise to all kinds of social scenarios.

Business Partnership:
Enhancing Workplace Safety
Different from non-governmental organizations (NGOs)
which mainly rely on grants to support its daily operations, social enterprises take advantage of businessmeans to fulfill their social missions. As one of the firstcertified social enterprises in China, First Respond® mustfind sustainable sources of revenue to fund its ambitious
dream of promoting the prevalence of first aid. It is impossible for First Respond® to become self-sufficient only byproviding safety solutions to sports events and first aid
trainings. With its experience accumulated in marathon
events and first aid trainings, First Respond® can develop
one-stop first aid solutions for companies, including
providing first aid training to their employees and deploying first aid equipment in their workplaces. In this way,
First Respond can not only help companies build up their®

safety management, but generate positive social influence.
The first aid solution designed by First Respond has®

become a highlighted example placed in many companies’ CSR reports.

Setting up Examples
China Overseas Office Capital (COOC) has been among
the earliest business partners of First Respond®. As oneof the largest state-owned enterprises directly under thecentral government, COOC has always hoped to be a
CSR leader in the industry. The company started its cooperation with First Respond® as early as in 2015. With theFirst Respond® is dedicated to developing first aid solutions applicable to all kinds of social scenarios

full assistance and support of COOC, First Respond®

developed a comprehensive emergency response system

For example, First Respond® joined hands with Meituan Dianping’s “Urban

covering all commercial official buildings, employees and

New Youth” Initiative to provide first aid training to food delivery couriers.

merchants of COOC across the country in more than two

With the help of professional instructors from First Respond®, the couriers

years. While installing necessary AEDs in the office build-learn and practice skills of dealing with emergencies such as cardiac arrest,

ings of COOC, First Respond® worked out an “e-button

choking, hyperthermia, stroke, burns and drowning. The Meituan couriers will

mutual aid system”, which connects the emergency callbe equipped with more first aid knowledge and even have the chance tosystem with the central control system of buildings on the

become certified first aiders through more training courses to be offered by“cloud”. First Respond® is also making efforts on devel-First Respond® later. And they are expected to become the “first aid super-

oping a small one-button SOS App. If someone fallsmen” on the road.

down, as soon as an SOS button nearby is pressed, thecentral control system will give off warning signals to

China Social Assistant Foundation, Hive Box Technology and First Respond®

security guards, who will then fetch the nearest AEDs tohave jointly launched the “Community-wide AED Sharing Program”. They will

the scene to offer help.

take advantage of Hive Box’s national network of self-service package
drop-off and pick-up stations to place 90,000 AEDs in 80 cities. And a first aid

This first aid system developed by First Respond® helps

training program for citizens has been kicked off at the same time to protect

to “warm up” the relationships between property owners

the lives of 200 million Chinese people. The whole program is planned to be

and merchants, employees and customers, and involves

completed in three years. First Respond® has also integrated its independently

all stakeholders into a mutual protection and aid network.

developed “AED map” into multiple platforms such as Tencent Maps, Baidu

It enables COOC to stand out in a crowd of competitors

Map and Alipay to enable citizens to check the locations and number of AEDs

and strengthens the company’s competitiveness in a

nearby in a real-time manner, and then quickly reach the AED locations

unique way.

through navigation Apps.

064｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜065

People of First Respond®:
Making a Difference Collectively and Individually
As a social enterprise with only a short history of six years,

Backed on this group of people who are full of passion,

First Respond conquered the big challenge of popularizing

enthusiasm and devotion, while pursuing neither fame nor

first aid among the general public with limited resources

wealth, First Respond® has convinced more and moreavailable. A driving force behind the company is a grouppeople from all walks of life that as tough as it is being aof people who are extremely strong-willed, mission-driven

small organization, it can make a difference by cooperating

and with shared values.

with government departments to improve first aid deploy-®

These people include not only its partners and employees,
but also volunteers from all over the country. The prevalenceof first aid cannot be achieved overnight. In fact, it took 50
years for developed countries such as the US, Japan andGermany to gradually establish a sound social emergency
response mechanism after continuously perfecting theirsystems of law, insurance, universal education, industry
self-discipline and government procurement. But Lu Le

ment, and by seeking unified efforts from various sectors
to promote the prevalence of first aid. Lu Le believes thatas more and more people come to see the importance ofuniversal mutual aid and are equipped with first aid
knowledge and skills, a social first aid market can takeshape soon and show exponential growth just like theinstant popularity of the video “Get Five Essential Survival
Skills in Five Minutes!”and his partners have cherished the conviction from theSince the beginning of 2019, First Respond® has received

very start that they can “make a difference collectively

many cooperation offers from local governments, enter-and individually” by taking the popularization of first aid

prises, as well as non-governmental clubs and organiza-

as a daily routine.

tions. In the seventh year since its establishment, thissingle “orange spark” is to start “a prairie fire”.

Essilor:Helping Needy Children with Poor Vision in
China’s Mountain Areas See the World Clearly
Yue Dingjun, Marketing and Communication, CEIBS
Since its inception 170 years ago, Essilor Group was

From its outset, Shanghai Essilor Vision Foundation

dedicated to the mission of “improving lives by improving(SEVF), the charitable arm of Essilor Group in China, wassight”, providing users with customized lens to help themcommitted to building an open public welfare platform forsee the world clearly and live a better life. The Groupvision health through cooperation with all parties

attached great importance to corporate social responsi-

concerned so that the underprivileged in China could live

bility (CSR), becoming the first among 40 companies

a better life with better eyesight. As of 2018, SEVF hadlisted on France’s CAC40 index to put the CSR commit-

provided free vision screening for more than 1 million

tee on the board of directors. The CSR committee was

impoverished students across China, and donated spec-

chaired by an independent director, with the Group’s

tacles to over 100,000 of them, fulfilling its mission of

Chairman serving as one of the members. The committee“improving lives by improving sight”. A businessman was

was responsible for assessing the economic and social

bent on making money, while an entrepreneur also took

impact of the Group’s business to ensure that the GroupCSR into account. The level of commitment to CSR was

moved forward along a path to sustainable development.

an important indicator that separated a businessmanfrom an entrepreneur.

066｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜067

A businessman was bent on making money, while an entre-

Mission of SEVF:
Alleviating the Eye Problems Afflicting Chinese People

preneur also took CSR into account. The level of commitment

The eyes were the human’s most vital navigation system,

the Fund was officially established. “As one of theto CSR was an important indicator that separated a business-through which over 80% of external information wasworld’s largest optometric companies, Essilor isman from an entrepreneur.

received. If not addressed in time, vision problems would

committed to performing its social responsibility

produce a series of adverse effects. In Singapore, thethrough charity work,” said He Yi, CEIBS CEO alumnus

annual economic loss incurred by nearsighted adults

and Chairman of Essilor (China) Investment Co., Ltd.,

aged over 40 hit USD 755 million.1 In the US, the annual“There is still a long way to go to improve Chinese

economic loss caused by refractive errors (including

people’s sight. The disadvantaged groups, in particular,

myopia, hyperopia and astigmatism) exceeded USD 16.1

need long-term attention and care... I hope more andbillion. Globally, the annual economic loss resulting from

more people will see a clear and beautiful new world.”

He Yi
CEIBS CEO 2009 Alumnus
Chairman of Essilor (China) Investment Co., Ltd.

2

employees’ uncorrected refractive errors was estimated
In early 2018, the principal of Gedashang TownshipGedashang Township Central Primary School was one of

to be as high as USD 272 billion.3

After its establishment, Shanghai Soong Ching Ling
Foundation-Essilor Charity Fund started organizing charity events for vision health in China. In September 2016,

Central Primary School at Xing County, Shanxi Province

the last two schools covered by SEVF’s Xing County Kids’

According to the Vision Impact Institute (VIII), around 4.6

learnt that the SEVF staff and a team of ophthalmologists

Vision Health Program. Since this Program was launchedbillion people worldwide suffered from vision problems ofwith the seal of approval of Shanghai Civil Affairs Bureau,from Xing County People’s Hospital would come to thein March 2017, SEVF has provided vision screening forvarying degrees. Among them, 2.5 billion, who lived in

SEVF was founded.

school to perform a refraction test on children and

23,000 students from 41 primary and secondary schools

poor areas with limited health and economic conditions,prescribe them glasses for free.

across Xing County and donated prescription glasses tocould not have their vision corrected promptly and effec-

6,500 of them in the course of 14 months. The Program

tively. Essilor Group made it one of its missions to help

was also the first of its kind in Shanxi Province to cover all

those people improve their lives by improving their sightcounty teenagers. Through vision health education, vision

by non-commercial means. To this end, the Group has

screening, a refraction test, and the donation of prescrip-

established Essilor Vision Foundation in the US, India,

tion glasses to teenagers in such an impoverished area as

Singapore and Canada since 2008.

Xing County, SEVF helped them see the world clearly,

The problem was worse in China: one in every three

thus performing its mission of “improving lives by improving

people over five was nearsighted. If left unchecked,

eyesight”.

myopia would afflict 700 million Chinese people by 2020.4

In the beginning, he took the news with a grain of salt.
After all, the school, which had only 53 students, waslocated in a secluded area, a nearly three-hour drive down
the mountains from the county. Who would climb over themountains to care for these kids? Even so, he harboredhigh expectations because they badly needed to betreated with care and love in the township of poverty andinsularity. In a multi-grade class,13 students were allleft-behind children, one parent of whom had passed

In this sense, myopia became China’s “national disease”.

away or run away from home, while the other had migrat-

Presently, nearly 40 million children in China wereed for work, or got remarried and never returned. As anearsighted; among them, 30 million lived in rural ares,

result, they were left in the care of their elderly grandpar-

without an opportunity for vision correction.5 How toents. Under such circumstances, they were not well cared

improve the sight of children in China’s poor areas

for and long bedeviled by vision problems, among others,

became one of Essilor’s focuses. Back then, the Chinese

which were often neglected...

government’s policy did not sit well with foreign-funded

On May 24, 2018, as soon as the SEVF staff and a teamfoundations. Therefore, Essilor Vision Foundation choseof ophthalmologists from the county hospital arrived at

to team up with Shanghai Soong Ching Ling Foundation,

the school as scheduled, cramped and spartan class-a well-established charity organization in China, to create

rooms suddenly livened up. Children lined up for a refrac-a corporate fund titled “Shanghai Soong Ching Ling

tion test, chatting happily with the staff. The results

Foundation—Essilor Charity Fund”. In September 2014,

Students wore new eyeglasses

showed eight children would need to wear glasses tohave their vision corrected. SEVF donated prescription
glasses to them. And for children with strabismus oramblyopia, ophthalmologists also advised their teacher toination at the county hospital.

Zhing YF et al., Ophthalmology & Visual Science, 2013, 54(11): 7532-7537.
Frick TR, Holden BA and Wilson DA et al., Bulletin of the World Health Organization, 2012. doi:10.2471/BLT.12.104034.
3
ibid.
4
Li Ling, Report on National Vision Care in China, Peking University Press, 2016.
5
ibid.
1

contact parents so that they could undergo further exam-

2

Students across Xing County were undergoing a eyesight check068｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜069

Building an Open Public Welfare Platform Through the Efforts ofPeople from All Walks of Life
Shortly after SEVF was established, Essilor positioned it

In April 2015, SEVF and Hunan Eye Care Foundation

as an open public welfare platform for vision health. Withlaunched “Eye Do” Program for teenagers’ vision health.

the support of people from all walks of life, SEVF was“Eye Do”, homophonic with “I Do”, meant that eachdevoted to improving poor people’s lives by tackling their

participant could do his bit for this project to improvevision problems.

teenagers’ sight. The Program has been conducted

In early 2015, based on the same vision, SEVF and thecharity organization “Education In Sight” launched “Education In Sight” Program in Yunnan Province. In April
2015, the project team held a vision health promotion for
50 primary and secondary schools in Shangri-La, Yunnan.
The team members guided the vision ambassadors on
how to deliver a lecture on both vision health and conduct
preliminary vision screening for students, and invited
optometrists to schools to perform a refraction test on
children from the Tibetan region and prescribe them
glasses. From September 2015 to December 2018, theproject team provided a free eye examination and correc-

nationwide for four consecutive years since its initiation.
In 2015, the Program was set in motion in Shanghai, andXiangxi and Xiangtan, Hunan Province. In 2016, it pushed
into Taiyuan, Shanxi Province and Nanning, Guangxi
Autonomous Region. With the establishment of SEVF, thecoverage of the Program was expanded. In 2017, it
covered six cities across five provinces, namely, Datongof Shanxi, Harbin of Heilongjiang, Yantai of Shandong,“Education In Sight” Program in Yunnan

Yongzhou and Yiyang of Hunan, and Yichang of Hubei. In
2018, more regions were covered, including Honghe,
Yunnan Province, Fushun, Liaoning Province, Guigang,
Guangxi Autonomous Region, Xi’an, Shaanxi Province,
and Changchun, Jilin Province. As of 2018, the project

In June 2016, SEVF, together with OPO Optical and Jilin

According to Zhu Jiacong, Secretary-General of SEVF, byteam had performed visual screening for more than

Mobile News, initiated “Eye Love” Program for teenagers’

the end of 2018, SEVF had provided a free vision exam-

800,000 students in 11 regions, and prescribed nearlyvision health. The first stop was Lameng Township at

ination for over one million poor students across China

40,000 of them glasses for free.

Longling County, a national-level poverty-stricken county

and donated glasses to over 100,000 of them. Zhu said,vision screening for over 130,000 students from morein Yunnan. SEVF performed visual screening and prescribed“Facing such a considerable challenge for vision healththan 300 primary and secondary schools in Yunnan, andglasses to students from a local central primary schoolin China, any company or NGO can do just a little bit,

donated prescription glasses to more than 18,000 of themand teachers from four neighboring schools; the second

producing a limited impact. Only with the support offor vision correction.

stop was Jingyu County, Jilin Province in June 2017; thelike-minded partners and people from all walks of life

third stop was Nong’an County, Jilin in December 2017.

can we quicken our pace toward improving the vision of

By the end of 2017, the project team had held three chari-children in poor areas.”

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070｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

gramtable activities with one return visit, screening 4,100
students in total and equipping 1,000 of them with a paire a lt h
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care. By the end of 2018, the project team had providedrogrof Baoshan in Yunnan, and gave them a lecture on eye”Pacross Longling County and Yingjiang County in the city

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tive glasses for students from grade 1 to 9 at 253 schools

i
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of spectacles for free.
In addition to the above programs, SEVF, together with
Nova Vision (Baodao Optical), initiated “Seeing the
Future” Program for teenagers’ vision health; together
with the Chinese People’s Association for Friendship with
Foreign Countries and Xing County People’s Government, SEVF launched the Xing County Kids’ Vision Health
Program; together with Baofeng County People’s
Government in the City of Pingdingshan, Henan Provinceand Henan Baoshida Vision Health Technology Co., Ltd.,SEVF launched Pingdingshan Children’s Vision Health
Program.

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜071

Continuously Exploring the Localization of
Public Welfare Events
The above examples tell us that SEVF carried out most of

SEVF started exploring the sustainability of public

In order to localize its operations, SEVF brought in corporate

its public welfare programs on a charitable basis,

welfare. Under a traditional public welfare model, optom-

and public welfare partners. In terms of refraction tests

performing a refraction test and prescribing glasses foretrists usually carried optometers to an area to perform aand eyeglass prescriptions, optometrists and ophthalmol-

free while promoting vision health.

refraction test and write an eyeglass prescription, a model

ogists abroad were self-employed, with a clinic of theirthat could help local people promptly identify andown. Inspired by the culture of giving, they usually took

address vision problems, but could not keep the project

the initiative to engage in public welfare events. But ingoing locally. Convinced that teaching one to fish was

China, optometrists or ophthalmologists worked at an

more important than giving him fish, SEVF hoped to get

optical store or hospital. In this case, an eye care founda-

local people involved so as to make its projects sustainable.

tion needed to cooperate with optical stores or eye hospi-

For instance, with the support of SEVF, a hospital attals to access human resources. Some optical stores andLongling County in the City of Baoshan, Yunnan Province

hospitals sent out optometrists or ophthalmologists andset up an optometric center that gave county residents aleased equipment to the foundation in the form of donat-

refraction

Essilor was also trying something different outside China.
In India, Essilor performed its mission mainly in the formof a social enterprise. For example, 2.5 New Vision Generation (NVG), Essilor Group’s arm in India., developed andproduced an array of easy-to-assemble reading glasses.
NVG recruited unemployed youngsters in rural areas andtrained them on how to operate an optometer and write
an eyeglass prescription for the elderly. After training,ated professional services. The foundation was responsible

below-market prices. Thanks to this new model, thefor project management and training on lens and vision

optometric center was well-placed to finance its sustainable

health. Therefore, complementary advantages could be

operations and offer long-term public welfare services toleveraged to more effectively carry out public welfare

rural students, including the sale of glasses at no moreprograms. Presently, Aier Eye Hospital Group, Bright Eyethan RMB 100 a pair and donation of glasses to children

Hospital Group, Baodao Optical, and OPO Optical werefrom some poor families.

all a part of SEVF’s corporate partners.

had something to do with the economic gap between the

Xing County Kids’ Vision Health Program was also based

Apart from the aforesaid companies, SEVF also partnered

two countries. As China’s economy was racing ahead andon the optometric center model. SEVF donated prescription

with other public welfare organizations, including Shang-the social enterprise model was not yet mature, running a

glasses to students who needed vision correction. Mean-hai Soong Ching Ling Foundation, Hunan Eye Care Foun-public welfare program through a foundation fit in withwhile, SEVF funded the establishment of an optometricdation, and Education In Sight. “It’s rare abroad to bring

China’s national realities.

center in a county hospital, donating equipment andin many partners so as to run public welfare programs

delivering training. As per the agreement signed by SEVF

in parallel across regions,” said Zhu Jiacong.

they could carry optometers and reading glasses to rural
areas to help the elderly. Under this sustainable publicwelfare model, the elderly in rural areas could accessappropriate reading glasses at a very low price; the side
benefit was that unemployed youngsters were able toderive income from these efforts. He Yi explained that thedifferent approaches taken by Essilor in China and India

test

and

prescribed

themglasses

Adjusting the eyeglass bracket

and the hospital, the optometric center could offer paid
services to all county residents, but it must put aside a
portion of profit every year to screen the sight of children
in poverty-stricken areas for free and donate a number of

Public Welfare Partners

Corporate Partners

glasses to some of them in need, because the prescriptionsof spectacles changed every six months or every year.
The optometric center model ensured children accessed
professional vision health services in the long run.

Kelly was delivering a lecture on vision health072｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

Major public welfare partners and corporate partners

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜073

Making the Company as Committed as Bees toBring Benefits to Society
Presently, all public welfare programs initiated by SEVF

SEVF explored several public welfare models: first, acentered on vision health. As the refraction test fortraditional charitable donation, which involved performing

children involved professionally measuring the height ofa refraction test and prescribing glasses, was increasingly

the pupil and distance between pupils, and polishingmature; Second, a sustainable optometric center (SEVF

lenses to ensure each pair of glasses was customized,

had made some explorations in this regard); third, public

only a few public welfare institutions could continuously

welfare partnerships (SEVF would seek more partners);

perform a refraction test on children and prescribe themlast, the social enterprise model (SEVF would step up

glasses on a large scale. This was what Essilor excelled

efforts at this point). It remained to seen whether SEVF

at. “Professional work should be done by professionals.

would focus on one or more of these models, or strike a

Correcting refractive errors is Essilor’s specialty. We arebalance among them.

duty-bound to focus on this field,” said Zhu Jiacong.

What makes public welfare greatis that it makes others great.

“Around 500 million Chinese people are grappling with

Essilor used a metaphor for corporate philanthropy: bees

vision problems, but they have not yet to wear glasses.

gathered honey only for survival, but they also spread

This market holds an immense potential. Chinese Presi-

pollen in this process, making the whole ecosystemdent Xi Jinping has called for concerted efforts tohealthy. Likewise, SEVF cared about children in poor

protect children’s eyes so that they can have a brightareas, who were expected to pass on their love to others

future. We will accelerate our exploration of publicin the future. To promote social progress and improvewelfare models. We are convinced that with the support

people’s well-being, SEVF encouraged business partnersof people from all walks of life, we will be able to poolto actively participate in public welfare programs, whichmore human, financial and material resources to improve

aimed to create a sound social environment and address

people’s vision and lives on a larger scale,” said He Yi.

CEDAR Charity:
Making Public Welfare a Strong
Force for Good

major social problems.

Cao Zhijing, Case Center, CEIBSWhen working on programs, SEVF’s staff often interactedwith students by asking them to write down their dreams
on a card. Zhu found that 70% to 80% of them had a

One ordinary winter night in early 2019, Liu Rumeng

From senior high school to college, Ms. Liu and CEDAR

dream of becoming a teacher or doctor. “Showered withreturned home after a day’s work. It has been the third

witnessed each other’s growth. Speaking about her

care and love, they owe a debt of gratitude. They feel it

year since she did volunteer teaching as a member ofchange, she said, “CEDAR has profoundly influenced me.

is their duty to help others in the future. They have

CEDAR Charity in the city of Xichang, Liangshan Yi

With greater confidence, I have figured out what I am

realized the importance of sending a message of love,

Autonomous Prefecture. Having benefited from CEDAR

good at and suited to do, and found the path ahead; I

which goes far beyond vision correction,” Zhu said.

Charity’s financial aid project for senior high school

have met many friends, forged close ties with some ofstudents, she set her mind to give back to society bythem, and also found my Mr. Right.”

Gathering honey was a long hard slog for bees, as weredevoting herself to public welfare. After going to college,

public welfare programs for SEVF. “We are still groping

she, who considered herself as “restless”, joined CEDAR

our way forward. Despite some headway, there is still

Charity, in charge of the college student training project.

much work to be done in exploring models”, said He Yi

She worked at its office in Shanghai and national coordi-

when reviewing SEVF’s progress in the past few years.

nation office in succession.

CEDAR Highrise was initiated by CEIBS alumni in 2012.
Registered in April 2015, Shanghai CEDAR Charity Foundation promotes “public welfare as a way of life”, sticking
to its philosophy of “pushing society to a higher andbetter level”.

A lecture on eye care was delivered to students

074｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜075

Establishment of
CEDAR Charity

CEDAR Charity:
Inspiring Beneficiaries toHelp Others in Need

After Wenchuan County, Sichuan Province was hit by amassive earthquake in 2008, CEIBS alumni raised funds

Shanghai CEDAR Charity Foundation carries out three

for relief and reconstruction in the disaster area. Following

public welfare projects: financial aid for senior high school

the completion of charitable donations, the CEIBS Alumni

students, college student training, and systematic volun-

Charity Union was officially established, in the hope thatteer teaching. In addition, the Foundation has more thanlittle acts of kindness would make a great difference to1,500 volunteers. Among them, some social elites offer

others. Inspired by the Charity Union, Fan Huishen andguidance to team members, who will grow into qualified

Wang Xiaohui, alumni from CEIBS EMBA 2002 Shanghai

mentors or coaches. This is what CEDAR refers to as aClass 1, also established a class charity association. After

sustainable educational charity ecosystem, where benefi-

striking acquaintance with Mr. Zhang Junda from Zheji-

ciaries are ready to help others.

ang Xinhua Education Foundation, they started funding
senior high school students in poverty-stricken areas,
particularly those who were “especially excellent,extremely poor, and grateful to others”. Chen Yao, Ric
Luo and Shi Li, Co-founders of the Charity Union, began
shifting their focus onto education, which was in keepingwith the identity of CEIBS. Since 2010, the Charity Union
has started publicizing the financial aid project for seniorhigh school students on CEIBS Shanghai campus, callingon alumni, faculty and staff to make a donation. This
project soon captured much attention from the CEIBS
alumni and as of today, CEIBS Prof. Wu Jinglian, Prof.
Ding Yuan, Prof. Xu Xiaonian and Prof. Katherine Xin are
all donors and goodwill ambassadors of the Charity
Union.
In April 2012, the Charity Union chaired a meeting with therecipients of financial aid in Shanghai. A total of 54
college freshmen, who had been subsidized at senior highschool, attended the meeting. Surprisingly, when asked
about how they felt studying in the city, most of themstared down and burst into tears. Though far away fromtheir poor hometown, they were still facing formidable
challenges in the city. When Shi Li was recalling the sceneof the meeting, her tone implied she was deeply stirred by
the plight of needy students. She had just rounded off her
global strategic planning for Bayer in Germany. This
experience was a turning point in her career, because she
was well aware that student aid alone could not heal thegrowing pains of poor students once and for all. Therefore, she made up her mind to work full-time on publicwelfare.

Liu Rumeng in Volunteer teaching“For students moving from a poverty-stricken area into a
big city like Shanghai and Beijing, the biggest challenge
ated by college scholarships and grants to some extent,

Financial Aid Project for Senior High School Students—
As You Study Hard, I Promise to Fund You Until You Graduate from Senior High School

but from the fact that they lag far behind their classmates

In partnership with senior high schools in poverty-stricken

better, communicate with students more efficiently, andareas, CEDAR subsidizes three-year tuition fees andimprove educational quality so as to drive the develop-

accommodation fees for poor students, and raises funds

ment of the school. From 2016 to 2018, this project subsi-

externally to cover their living expenses so that they candized a total of 4,345 students from 91 classes at 30

get through school. While providing necessary financial

schools in 11 provinces, most of which are located insupport, CEDAR requires school leaders and head teachers

China’ western regions, including Yunnan, Guizhou andsign up for its courses on “coach-type teachers” to pickNingxia.1

does not stem from financial burden, which can be allevi-

on all fronts. First, without an IT education, they are weakin information search and processing; second, with afeeling of inferiority about personal background andfamily circumstances, they are unable to communicate
well with others; third, the current education system inpoor areas is in no position to provide students withaccess to essential-qualities-oriented education that aims
to spark students’ curiosity and creativity.”

up coaching skills required to understand themselves

Three co-founders conceived the CEDAR Highrise as a

Born into a poor family in a remote area,
I study hard in relentless pursuit of
my dreams.

charity project that aimed to prepare needy students wellfor society. Then, they clarified its purpose: awakening
college students’ passion for dreams, improving theircompetence, vocational skills, and ability to deliver
services, and sharpening their sense of self-reliance,
self-confidence and self-improvement so as to cultivatethem into top talent who owe a debt of gratitude to thecommunity. The project derived its name from a frequently-quoted Chinese saying, which explains that “it takes
ten years to grow trees, but a hundred years to rearYour aid will make a great difference tomy family and my life.

people”. Just like the cedars shooting upward, the nameimplies metaphorically that with the support of people
from all walks of life, teenagers will grow into pillars ofsociety after going through trials and tribulations to giveback to family and community.
1076｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

Data as of October 2018.

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜077

Systematic Volunteer Teaching—
CEDAR’s Exploration of New Volunteer Teaching Models

To promote career development;
To deliver innovative services to others;
To cultivate children into top talent required forexcellent companies.

Liangshan Yi Autonomous Prefecture is home to China’s

Volunteer teachers are selected through a rigorous

largest community of Yi people. Owing to geographicalprocess. In 2018, CEDAR received 1,390 applications for

restrictions, Liangshan is cut off from the outside world.

volunteer teaching, and picked out 56 applicants. There-

Before the liberation, local people had to persevere

after, they attended the national leadership training camp,through the lifestyle of a slave-type of environment:

followed by a three-week pre-service training, to improve

suffering from poverty, ignorance, grave illnesses, andtheir teaching ability.

drugs. In light of the local education system, teacher

To spare time
to tune in to needy students’ concerns;

shortage is the knottiest problem. According to statistics,

To share experience
as a volunteer of CEDAR Charity;

secondary schools in Liangshan. Due to local toughTo sharpen children’s volunteering spirit andmake them more independentand high turnover, none of the children from villages of Yi

6,000 teaching posts need to be filled for primary andconditions, teachers’ limited capabilities, heavy workload,
nationality have entered college, with few of them finishingsenior high school or technical school.

College Student Training—
Thinking, Learning and Sharing to Co-Create a Win-Win Result
In 2012, CEDAR launched a college student training

Mr. Chen Haigang is an alumnus of CEIBS EMBA 2000

project to help freshmen adapt to college life. This projectand Director of CEDAR’s college student training project.

aims to awaken college students’ passion for dreams,

In 2012, he learned about the financial aid project for

improve their competence, vocational skills, and ability tosenior high school students from his classmates who haddeliver services, and sharpen their sense of self-reliance,

graduated many years before. For the first time, he raised

self-confidence and self-improvement so as to cultivate

funds for a senior high school class in the city of Baoshan,them into top talent who owe a debt of gratitude to

Yunnan Province. Meanwhile, he engaged in CEDAR’s

community. On April 30, 2015, Shanghai CEDAR Charity

mentoring program to coach college freshmen. “For me,

Foundation was registered at Shanghai Civil Affairs

public welfare means giving others an opportunity to

Despite its short history, CEDAR has become a darkhorse in China’s volunteer teaching community. In 2017and 2018, it was the only public welfare organization to
win the gold award at the CSTD National Corporate
Learning Design Contest, in which many large commercial institutions competed. Presently, there are more than
200 volunteer teaching groups in Liangshan. The Liangshan Prefecture Government and the local education

Presently, volunteer teaching is usually organized in theauthorities awarded a license for volunteer teaching tosummer vacation or on a short-term basis in China.

CEDAR, among others, thinking highly of its project as “aBased on her own observation, Shi Li notes that due toradical departure from China’s traditional volunteer teach-the simple folk custom in poor areas, local children growing model”. With a complete organizational system anddeeply attached to well-meaning volunteer teachers. As aan optimal talent training system, CEDAR is well-placed

result, they may feel heartbroken when their teachers bid

to elevate China’s volunteer teaching to a new level.

farewell to them in a very short time. Besides, somepeople went into volunteer teaching when they had afailed relationship, lost a job, or wanted to experience life.
These mixed motives produced a negative impact on
local education.

Ms. Gao Liping, a special advisor to CEDAR’s volunteer
teaching project, set an example. Ms. Yang Xiaodan, amember of the project team, was responsible for teaching
management in her second year at CEDAR. To her
surprise, CEDAR laid down tougher working standards

Bureau to facilitate fundraising and recruitment ofalter their destiny. As volunteers need to devote time

CEDAR comes to grips with structural problems in volunteer

full-time staff. Since then, the college student training

and effort to public welfare, it is critical to arouse theirteaching in a systematic way. It has funded a number ofsession, she was so stressed-out that she cried bitterly inproject has been gathering momentum. By the end ofsense of participation,” said Mr. Chen, “Therefore,

senior high school students from poor areas. Familiar withthe restroom. In fact, CEDAR never relaxes its stringent

2018, project team members spread across 30 provinces,public welfare needs to be inclusive and flexible enoughlocal conditions, they are very caring and compassionate.

demand on team members. Therefore, each of themmunicipalities and autonomous regions delivering training

to keep pace with the times”.

CEDAR has encouraged the first group of funded students,

works hard in the hopes of earning the project a brand

who graduated from college in 2014, to engage in volun-

reputation. Finally, as expected, Mr. Yang and her projectteer teaching, a move that can also alleviate their pressure

team won the gold award at the CSTD Contest again.

to enter the workplace. In order to achieve a win-win

When facing the painful choice between applying for a

result, CEDAR provides them with training on collabora-

postgraduate entrance examination and engaging intive learning in line with management trainee standards topublic welfare, she firmly stepped out of her comfort zone

make them not only qualified for one or two years of

to devote herself to volunteer teaching. She said, “I did

volunteer teaching, but also competitive in the future

feel confused. But as an adult, I must take responsibility

workplace. It has been the third year since the volunteer

for my choices. What’s more, I have no regrets as volun-teaching project was launched in September 2016. Up toteer teaching has brought me gains and pleasure.”3

2

to more than 10,000 college students.
The college student training project consists of six
modules: mentoring program, coaching program, publicwelfare events, lectures, company visit, and a company

Mentoring
programCoaching
programPublicwelfareeventsinternship. Following the “316” training rules and “127”learning rules, all courses are underpinned by the coreideas of “leading by example” and “thinking, learning andsharing to co-create a win-win result”. Students need to

Lectureslearn not only on their own, but also through collaborationand practice to gain hands-on experience.

2

The journal Cedar Charity (#3).

078｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

Company
visitCompany
internshipthan many large companies did. After a debriefing

108 volunteer teachers have taught at 10 schools, exertinga positive influence on 8,000 students of Yi nationality.
3“CEDAR’s Volunteer Teaching Project Offers You an Opportunity to Break Out of Mediocrity”, sohu.com, 2018-03-29. http://www.sohu.com/a/226697610_284153.

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜079

Making Public Welfare Sustainable:
Passing on the Virtue of Philanthropy and Leading by Example

Training System—
CEDAR’s Training CampsAs CEDAR perseveres in conducting public welfare in a

grasp it. We need to nourish our minds to seize a golden

systematic manner to tackle social problems, training

opportunity when it occurs. In order to help CEDAR

CEDAR is an acronym for “Creative” “Efficient” “Disci-matters a great deal to each project. When developing themarshal resources from all sides, the training camp setsplined” “Ambitious” and “Responsible”. The CEDAR

college student training project, CEDAR found college

a high bar for trainees, providing them with opportuni-

Highrise provides not only poverty relief, but also nurtur-

students were poor at communication and projectties. At the camp, each of us needs to forge ahead

ance. Take CEDAR’s volunteer teaching as an example.

Fundraising is the biggest challenge for sustainable

management. Under the leadership of Dr. Zeng Enming,

because we shoulder a great mission. I hope CEDAR’s

Children funded by CEDAR have committed themselves

operations of public welfare institutions, especially

Director of CEDAR and Chief Designer of Talent Develop-

training camp will work out a new way for Chinese

to volunteer teaching after college graduation. Whilenon-government organizations. The network of CEIBS

ment System, CEDAR began exploring its unique talentcollege students to improve themselves.”4

doing good, they have managed to rekindle the passion ofalumni gives CEDAR a unique advantage. Director Shi

cultivation system. The leadership training camp was
initiated by CEDAR in 2016, with technical support from
Shangshan 100 Charity Association. The training campteachers in poor areas for work. In addition, CEDAR

said without the generosity of CEIBS alumni, CEDAR

Based on the national training camp, CEDAR has set upprovides volunteer teachers with coach-type mentoring

Highrise would not get off the ground. She said, “CEDAR

regional and urban training camps for its team members.

so that they can bring out their best in the future workplace.

was initiated by CEIBS alumni. When marshalling social
resources for public welfare projects, we contacted

Meanwhile, it has tried grooming funded college gradu-

follows Principle “316”, namely, 30% online learning,

Embodiment of CEIBS Spirit—
Alumni’s Engagement in Public Welfare

ates as mentors for college training camps, organized

Mr. Fan Huishen, Vice Chairman of CEDAR and an alumnus

alumni from all over the country. Since its inception, 700

senior high school training camps to improve students’of CEIBS EMBA 2002, summarized, “The CEDAR spirit

or 800 alumni, including their businesses, have beencapabilities, and assisted regional education authorities inspurs beneficiaries on to lend a helping a hand todirectly or indirectly involved in the CEDAR Highrise.”At the 2017 CSTD Contest, Dr. Zeng elaborated on the

launching rural training camps for rural teachers. To

others. We have two core competencies: linking andsignificance of the leadership training camp. “We often

expand the positive social impact of education charity,empowering others. The former means providing public

Since 2008, in response to the call of the CEIBS Alumni

feel aggrieved that we have no chance at all. In fact,

CEDAR has not only subsidized children in poor areas,

welfare by linking senior high schools, colleges, gradu-

Charity Union, alumni and alumni companies have raisedeven if an opportunity arises, we are in no position to

but also given them training.

ates, volunteers, local secretariats, and CEIBS alumni;

more than RMB 50 million to subsidize over 6,000 senior

the latter means organizing activities, including leader-high school and primary school students. Since theship training camps, mentoring programs, coaching

establishment of Shanghai CEDAR Charity Foundation inprograms, and professional competence development.”

2015, CEIBS alumni have donated more than RMB 22

10% offline training, and 60% practice relating to publicwelfare.

million to fund over 1,880 senior high school and primary
Donations from CEIBS alumni accounted for 45%, 34%Marketing and staff recruitment

us a starting point from which to conduct public welfare.”and 33% of all charitable funds CEDAR received fromIn order to achieve sustainable development, public

2016 to 2018. Besides, 400 CEIBS alumni have served as

welfare organizations need to perform a balancing act

a mentor for CEDAR’s college student training program,among all stakeholders, including the government,coaching over 10,000 students from more than 100

donors, recipients, volunteers and the public. Whilecolleges. For CEIBS alumni, the integration of public

clarifying the mission and purpose, they need to build awelfare and business through innovation is the order of

product and service system that can meet social needs.

the day. CEDAR’s practice provides CEIBS faculty andBasic skills

Mentoring skills

Leadershiptraining
camp

Capabilities

CEDAR
LandscapeTechnological PK

Future leadership

Profile of CEDAR

Mission statement

Learning on one’s own

CEIBS EMBA 2002, often says, “People’s pain points give
Customer experience management

school students, and 35 volunteer teachers from CEDAR.

Regional training camps—Training camps for key staff
Annual plan; organizational operations

Ms. Chen Yao, Director of CEDAR and an alumna of

Event planning and review

Training camps for senior high school students—training camps forvolunteer teachers at rural schools—CEDAR’s volunteer teaching

Passing on the virtue of philanthropy
and nurturing talent

Public welfare events

Thinking, learning and sharing toco-create a win-win result

Leading by example

students with deep insights into how to develop publicwelfare projects for underdeveloped areas.

Motive—Action—Good habits
Life—Virtue—Charity education
Perception—introspection—Connectivity—Action
Example—Direction—Discussion—Sharing—One-year practice—Review“127” Schedule
Leadership training camps—Regional training camps—Training camps for key staff—
Staff recruitment and leadership reelection—One-year practice—Mentors for training camps
4

CEDAR’s Leadership Training Camp Opened in Zhengzhou, dahe.cn, 2017-07-25. https://4g.dahe.cn/mip/news/20170725108484478.
Dr. Zeng at the training camp

080｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CSR Practices of CEIBS Alumni Companies · CEIBS CSR Report 2018｜081

Challenges Ahead

Further Explorations

Most founders of non-government public welfare organi-

Ms. Shi notes that along with the nationwide implementa-zations have a sharp sense of social responsibility, buttion of a 12-year compulsory education, the number ofcharity needs financial support. Despite the backing offinancial aid projects for senior high school students will

CEIBS alumni, CEDAR was in financial straits. Ms. Shi

taper off after senior high school tuition fees will be

Lianqun, Secretary-General of CEDAR, points to a gap inabolished by 2020. She says, “Public welfare organiza-

support from people from all walks of life across China fortions are transforming such projects towards essen-

non-government public welfare organizations. For one

tial-qualities-oriented training. Though donations willthing, few channels are available for the public to know

remain a significant chunk of such projects in the next

about non-government public welfare projects; for anoth-

two or three years, we will make essential-qualities-ori-

er, under tremendous pressure, companies do not haveented training accessible to more senior high schoolenergy or capital to invest in public welfare. In 2018,students. For example, we are considering inviting

CEDAR began trying to expand the influence of projects

some successful entrepreneurs to deliver a speech inthrough more channels. For example, within three months

backward areas.”

after its launch, the charity sale on Taobao.com raised
RMB 1.968 million for CEDAR’s (one-year) financial aid
project for senior high school students, nearly double theoriginal target of RMB 1 million.

In addition, the establishment of CEDAR’s training system
will open up new possibilities for organizational development. When it comes to CEDAR’s advantages, Ms. Shi
says, “Compared with other volunteer teaching teams,

Secretary-General Shi admits that it is more tough for

CEDAR is well-placed to deliver volunteer teaching

CEDAR to raise funds for its college student training

services in an innovative, systematic and methodical

project. As the financial aid project for senior high schoolmanner. At a senior high school, our team provided

students involves the donation of funds, donors can knowteaching services for more than 1,000 students andclearly the flow of funds and the background of beneficia-

faculty members, exerting a more profound influenceries. As the college student training project aims to help

than any other mentoring product.” Given the necessary

strengthen college students’ personality, most volunteer-

costs of the training project, including the site fees anding services are invisible. Besides, some public welfaretransport fares incurred by coaches, CEDAR is discussing

institutions that deliver intangible services find them-

the possibility of incubating it into a social enterprise. Thisselves at a disadvantage because few people are willing

new model will enable CEDAR to feed profits, if any, backto contribute administrative fees. Ms. Shi says thatto the foundation or other public welfare programs, while

addressing these problems, which are not unique toensuring the operations of entrepreneurial projects.

CEDAR, requires the efforts of multiple stakeholders andpeople’s heightened awareness of public welfare.

Since its inception, CEDAR has been committed toextending love to more individuals in more regions. Overthe past two years, it has kick-started the transformationof the organization to iron out the problems plaguing
public welfare organizations across China. CEDAR’s
well-proven model serves as the template for soundmanagement of charity organizations. It will continue topush forward organizational innovation so as to offer new
perspectives on the operations of public welfare projects.

082｜CEIBS CSR Report 2018 · CSR Practices of CEIBS Alumni Companies

CEIBS
CSR ResearchSelection of Published Papers

Corporate social responsibility and employee
engagement: The moderating role of CSRspecific relative autonomy and individualism
Deborah E. Rupp1 / Ruodan Shao2 / Daniel P. Skarlicki3 / Elizabeth Layne Paddock4 / Tae-Yeol Kim5 / Thierry Nadisic6
The importance of work engagement for both employees’

We focus on employees’ perceptions of their organiza-

well-being and organizational productivity is well estab-tion’s CSR activities rather than objective organizational

lished. Defined as a “positive, fulfilling, work-related state

CSR actions. Also we define CSR perceptions as employ-of mind that is characterized by vigor, dedication, andees’ perceptions of the extent to which their employer

absorption”, work engagement has been shown to beengages in various CSR activities. Although direct andenhanced when job characteristics that are challenging

indirect evidence of the CSR perceptions-work engage-and meaningful are provided to individuals with qualities

ment relationship is mounting, we question whether theseknown to thrive in such environments. Recent advances

effects are universal and whether there might be bothwithin the corporate social responsibility (CSR) literature

person and situation (and person × situation) variables

have uncovered sources of meaningfulness for employ-that act as boundary conditions on this relationship. In theees that extend beyond their daily, required job tasks.

present research, we consider whether the link between

That is, employees’ perceptions of their employers’ CSR

employees’ CSR perceptions and their work engagement

relate positively with their work engagement.

occurs as a function of employees’ contextualized

CSR refers to “actions on the part of the firm that appear
to advance, or acquiesce in the promotion of some social
good, beyond the immediate interests of the firm and its
shareholders nd beyond that which is required by law”.
Common CSR initiatives include corporate philanthropy;“green” initiatives; employee assistance plans; community-based corporate volunteerism programs; the setting of

motivation for complying with, advocating for, and/or
participating in CSR activities. We also consider whether
this moderating effect is further bounded by employee-level differences in individualism. Figure 1 presents
our theoretical model.
Controlling for:First-Party Justice Perceptions

voluntarily high standards/codes of conduct around

Moral Identity

working conditions (across the supply chain); and productAge, Gender, Education, Tenure

quality/safety initiatives, among others.

Employer Type and National Culture

Studies have begun to explore the psychology of CSR
from the perspective of employees, and initial empiricalresearch on this topic has been promising. Other research

CSR-Specific
Relative Autonomy

Employee
Individualism

has evidenced relationships between CSR perceptions
and work engagement more broadly. Together, thesefindings compliment even broader research showing CSR
perceptions positively predict applicants’ job pursuit

Employee CSR
Perceptions

Work
Engagement

intentions and perceptions of organizational attractiveness, as well as employees’ identification and commitment.

FIGURE 1 Theoretical model

Department of Psychological Sciences, Purdue University, West Lafayette, Indiana, U.S.A.
Department of Business Administration, Asper School of Business, University of Manitoba, Winnipeg, MB, Canada
3
Sauder School of Business, University of British Columbia, Vancouver, BC, Canada
4Work and Organizational Psychology, MTEC, Department of Management, Technology and Economics, ETH Zürich, Zürich, Switzerland
5
China Europe International Business School (CEIBS), Shanghai, P. R. China
6
Emlyon Business School, Paris Campus, France
1
2

CEIBS CSR Research · CEIBS CSR Report 2018｜085

THEORY AND HYPOTHESES
Employee CSR motivation
The more internalized an individual’s motives for specificbehavior, the more autonomous the person is expected to

In contrast, those who see the CSR context as a mecha-

of individualists are argued to be, to a large degree, deter-nism to create positive social change through their own

mined by these unique personal attributes. As a result,agency are more likely to derive energy, mental resilience,individualists have a strong preference for autonomy anda sense of significance, enthusiasm, and inspiration from.

are less likely to feel satisfied when their actions are

When employees take part in CSR activities of their own

dictated by social norms.

—Employee Views CSR Context as Self-Determined—

volition (i.e., bottom-up CSR management), they are more

Intrinsic Motivation

likely to find meaning in their work, which contributes tobe in enacting the behavior. As such, according to thisContext is inherently rewarding

their work engagement. In summary, we expect theperspective, motivation is often couched in terms of

Example: An environmentalist working toward slowing
climate change through involvement in his/her
employer’s zero-carbon emissions program

relationship between employees’ CSR perceptions andrelative autonomy. In organizations, relative autonomy isassociated with heightened performance and morework engagement to be stronger among employees who
perceive higher CSR-RA.

positive attitudinal outcomes as compared with more
controlled or extrinsic forms of motivation. In the present

Identified Regulation

paper, we are specifically interested in how employees’

Aspects of the situation are seen as personally valuable

perceived CSR-specific relative autonomy moderates

Example: CSR initiative providing professional
development and leadership opportunities for
employees(amplifies) the association between employee CSR
perceptions and their engagement.

This construct, labeled hereafter as CSR-RA, is illustrated
in Figure 2. As shown, CSR-RA can range from being

Employees’ CSR-RA moderates the positive
relationship between employees’ CSR perceptions and work engagement such that the relationship is stronger when employees perceive higher(as opposed to lower) CSR-RA.

We build on the SDT/OIT framework to consider employees’ perceived relative autonomy within the CSR context.

Hypothesis 1.

Introjected Regulation
Desire to avoid guilt or shame, or to enhance one’s self-image
Example: Use of a CSR “leaderboard”—where CSR
participation is tracked and reported publically—
creating peer pressure and competitivenessAs discussed above, when an organization’s CSR context
is perceived as providing employees with CSR-RA,
employees have more volition to enmesh themselves in
CSR activities, which serves as source of work engagement. We expect this to be true more so among thosehigher in individualism, in that such individuals prefer andstrive for autonomy and independence. Thus, we expect
the amplifying effect of CSR-RA on the CSR perceptions-work

engagement

relationship

to

be

more

pronounced among employees higher (versus lower) inindividualism.
In contrast, employees lower in individualism demonstrate less concern for agency and autonomy. They

The role of employee individualism

instead tend to value deference (admiring and following
an authority), similance (imitating and emulating others),

Data collected from over 1,000 employees working in 17

affiliation (forming associations), and blame avoidance. It

regulation is illustrated by an employee “volunteerism”

countries revealed that the relationship between employ-

follows that for employees with lower individualism, theirprogram where an employee perceives a risk to his or her

ees’ CSR perceptions and their affective commitment

perceptions of being deprived of autonomy within thewas stronger in cultures with higher humane orientation,

CSR domain may not hinder them from reaping CSR’s

institutional collectivism, ingroup collectivism, and future

psychological benefits (e.g., work engagement) because

orientation, as well as those with lower power distance.

conforming to (imposed) CSR regulations might instead

This research suggests the importance and relevance ofbe a way to satisfy these preferences. That is, those lower

considering culture when examining the effects ofin individualism may indeed be more positively respon-

employees’ perceived CSR on workplace attitudes andsive to CSR (in the form of work engagement) when their

behaviors. To extend this line of inquiry, in the present

CSR motivation is externally regulated rather thanresearch, we also consider the role of culture (specifically,

self-determined because they value deference and blame

individualism) in the effects of employees’ perceived

avoidance, and thus, conforming to external regulations

CSR. We focused on individualism in particular because it

can be perceived as the necessary and right thing to do.

has a strong theoretic connection with the degree to

Therefore, among employees lower in individualism, we

which individuals value autonomy, which as discussed

would not expect CSR-RA to amplify the effects of CSR

above, is key to CSR-specific motivation.

perceptions on work engagement.

externally regulated to intrinsically motivated. External

performance review by not participating. Introjected
regulation is illustrated by the use of a “leaderboard”
within the context of an CSR initiative—where participation is tracked and reported publically, creating a great
deal of peer pressure and competitiveness around CSR
participation. Identified regulation is exemplified by what
is referred to in the literature as “internal CSR” initiatives,
which include such offerings as professional develop-

External Regulation
Strict institutional regulations and threats of punishment
Example: An employee “volunteerism” program,participation in which shows up as a performance
review criterion—Employee Views CSR Context as Under Complete
Control of Upper Management—
FIGURE 2 CSR-specific relative autonomy (CSR-RA)

ment and leadership opportunities for employees, which
can be viewed by employees as personally valuable.
Finally, intrinsic motivation is illustrated by situations
where employees’ involvement in CSR is inherently
rewarding in and of itself, such as an environmentalist
working toward slowing climate change through involve-

Employee perceptions of CSR-RA stand to set an important boundary condition on the extent to which employee
CSR perceptions lead to employee engagement. Employee engagement is likely to the extent that CSR is a sourceof meaningfulness. From an SDT perspective, it is unlikely

Individualism refers to the extent to which individuals’

that employees viewing their CSR context as providing noidentities are formed through individual accomplishments

personal agency for driving positive social change (i.e.,

versus group affiliation. Numerous studies show that

Importantly, these dimensions are all “as perceived” byautonomy) will find CSR meaningful in a way that will

individualists emphasize attention to oneself versus

the employee. That is, they do not necessarily reflect ancontribute to their overall work engagement. In other

others and appreciate and strive for their own uniquenessobjective incentive structure that might be present withinwords, employees who view CSR as yet another task thatfrom others. Individualists highly value their own rights,

the organization. Nor do they reflect employees’ attribu-

they have to do to avoid guilt, shame, and retribution, aretend to be independent, self-autonomous, and self-con-tions surrounding the organization’s motives for putting

unlikely to be those employees for whom CSR is a source

tained, and hold the belief that they have a unique combi-

CSR initiatives in place.

of absorption and dedication at work.

nation of personal attributes. Furthermore, the behaviors

ment in his/her employer’s zero-carbon emissions
program.

086｜CEIBS CSR Report 2018 · CEIBS CSR Research

Hypothesis 2.
A three-way interaction among employees’ CSR
perceptions, CSR-RA, and individualism predicts
work engagement, such that the amplification
effect of employees’ CSR-RA on the CSR perceptions–work engagement relationship is stronger for
those higher (as opposed to lower) in individualism.

CEIBS CSR Research · CEIBS CSR Report 2018｜087

Work engagement

METHODWork engagement was measured using the 17-item
Utrecht Work Engagement Scale, assessing the three

Participants and procedure

subdimensions of work engagement, namely, vigor,

Participants were full-time employees (N=673) enrolled in part-time MBA programs in Canada, Mainland China, France,
Hong Kong China, and Singapore. The pooled sample was 57% male and participants were on average 36 years of age.
Average tenure with current employer was 7.31 years, and the average participant had between a bachelors-andmasters-level college education. Data were collected via an employee survey, all surveys were administered on paper. All
participants were assured of confidentiality, that their participation was voluntary, and that the data would be used forresearch purposes only.
TABLE 1 Participant demographic information
Country/RegionnAverage age(SD)

Gender(percentage)

Average tenure(SD)

Education background(SD)

absorption, and dedication. Items were averaged to forman overall index of work engagement such that higherscores indicate more work engagement.

Organizational justice

RESULTS
Consistent with our expectations, CSR perceptions
positively correlated with employees’ work engagement.
We also found a significant negative correlation between
employees' individualism and their CSR perceptions.
To test our hypotheses, we conducted hierarchicalmoderated regression. Following Aguinis (2004) andColquitt’s (2001) measure was used to assess the extent

Aiken and West (1991), we centered all continuous

to which participants felt (personally) fairly treated.

predictor variables before entering them into the regres-

Following recent recommendations that justice measuression equation and before creating the interaction terms.

explicitly reference a source, 10 items pertaining to

We found that the two-way interaction between employ-

distributive and procedural justice referenced the organi-ees’ CSR perceptions and CSR-RA on work engagement

zation, and responses to them were combined to create

was not significant but was qualified by a significant

organization-focused justice scores; and eight items

three-way interaction among employees’ CSR perceptions, CSR-RA, and individualism.

Canada181

33.98 (SD=4.22)

125 Male (69%)

6.52 years (SD=3.10)

2.14 (SD=.56)

Mainland China

109

33.26 (SD=3.42)

57 Male (52%)

5.30 years (SD=3.09)

2.03 (SD=.60)

pertaining to informational and interpersonal justiceFrance13242.16 (SD=7.53)

76 Male (58%)

10.94 years (SD=7.51)

2.91 (SD=.50)

referenced the supervisor, and responses to them wereHong Kong China

106

30.03 (SD=4.58)

52 Male (49%)

4.58 years (SD=2.28)

2.22 (SD=.59)

combined to create supervisor-focused justice scores.

The results pertaining to participants lower on individual-

Singapore

145

39.12 (SD=13.07)

75 Male (52%)

8.48 years (SD=8.46)

3.12 (SD=1.17)

Response options ranged from 1 (strongly disagree) to 7

ism were somewhat counter to our expectations, in that

Pooled sample

673

35.95 (SD=8.67)

385 Male (57%)

7.31 years (SD=6.01)

2.50 (SD=.86)(strongly agree).

rather than our expected amplification effect of CSR-RA

Note. Education was coded as 1 = college diploma; 2 = undergraduate degree; 3 = master’s degree; 4 = PhD.

on the relationship between CSR perceptions and work

Moral identity
We employed the internalization dimension of moral
identity. Compared with the symbolization dimension,

Measuresinternalization is a stronger and more consistent predictor

CSR perceptions

CSR-specific relative autonomy

We adopted the definition of CSR by Waldman et al.,

We adapted the SRQ developed by Ryan and Connell

namely, “actions on the part of the firm that appear to(1989) to assess participants’ perceived CSR-RA. SRQs

advance, or acquiesce in the promotion of some social

are the means by which contextualized relative autonomy

good, beyond the immediate interests of the firm and its

is measured. This is traditionally done using items inquir-

shareholders and beyond that which is required by law.”ing about the behavioral domain of interest and whether

It is the discretionary citizenship measure that has been

actions are regulated via external, introjected, identified,broadly adopted within contemporary CSR research as

and/or intrinsic forces.

most fitting for measuring CSR perceptions consistent
with contemporary definitions. The measure contains fiveitems averaged to form an index of CSR perceptions.

Individualismof behavior and has been used more often in priormicro-CSR research. This five-item measure asks aparticipant to imagine a person who has nine moral traits(i.e., caring, compassionate, fair, friendly, generous,
helpful, hardworking, honest, and kind) and then tochoose the extent to which possessing these traits issignificant to the participant's self-construal.

Employee demographics

engagement to simply be weakened for those lower inindividualism (relative to those higher in individualism), we
actually see a positive CSR effect on work engagement
when CSR-RA was lower. Said differently, the effect of
CSR perceptions on work engagement was positive andsignificant for those lower in CSR-RA. This effect isconsistent with our theorizing, but surpassed our expectations, in that it suggests that employees lower in individualism actually derive the most meaning from the CSR
they perceive, when they view their compliance with,advocacy for, and participation in CSR as being externally(as opposed to autonomously) regulated.
What was completely unexpected were the high levels of

At the end of the survey, we asked participants to report

engagement reported for those lower in individualism andtheir birth year, gender, tenure with the current employer

higher in CSR-RA. These employees’ work engagement(in years and months), and their educational background.

remained at a relatively high level regardless of their CSR

Issues covered within the items include outside educa-

We used Triandis and Gelfand’s (1998) four-item horizontal

tional programs for employees, corporate philanthropy,

individualism scale to assess participants’ individualism.

green initiatives, community partnerships, and staff

Participants were asked to indicate the extent to which

Employer characteristics

work-life balance programs—all of which are consistentthey agreed with four statements. Sample items included

We also asked participants at the end of the survey towith the definition of CSR adopted herein.

“I’d rather depend on myself than others” and “Myreport their employer type (coded as for-profit vs.

personal identity, independent of others, is very important

non-profit). In addition, we created a variable in our

to me.” The response options ranged from 1 (never ordataset indicating whether the organization employing

definitely no) to 9 (always or definitely yes).

each participant was operating in a country considered byperceptions.

national indices to be relatively high or low on individualism.

088｜CEIBS CSR Report 2018 · CEIBS CSR Research

CEIBS CSR Research · CEIBS CSR Report 2018｜089

Research Projects in Progress

DISCUSSION
Summary
Few would dispute the mutual benefits of work engage-exist. This suggests that organizations should take efforts

ment for employees and employers alike. When employ-to publicize CSR programs (both formally and informally)

ees derive meaning from their work, they are healthier,among employees and actively create a context where

happier, and more productive. Whereas much of the work

employees can have a voice in the initiatives’ develop-

engagement research focuses squarely on the meaningful

ment, deployment, and evaluation. Formal communica-

characteristics of employees’ day-to-day job tasks,

tion mechanisms might include staff meetings, memos,

research has more recently argued for CSR as a uniqueand email announcements; and might help employees

source of meaningfulness for employees; and empiricalperceive more CSR activities and subsequently be more

support has been offered evidencing a connection

engaged.

between CSR perceptions and work engagement.

autonomous contexts will be more potent in strengthening

theories, we propose that the extent to which employee

the CSR perceptions-engagement link among employees

CSR perceptions influence work engagement will depend

who value individualism. This suggests that organizations

on the extent to which employees see their complianceand managers should consider employees’ cultural

with, participation in, and advocacy for CSR is autono-

values when introducing CSR initiatives to internal

mously regulated.

employees. For employees with higher individualism,
managers can emphasize self-discretion in employees’

From a practical perspective, our research shows that

CEIBS Professor

participation and involvement in CSR initiatives. Here, aResearch Topic
Does corporate engagement in public welfare lead to better

Wang, Qi

business performance in emerging markets?—Analysis on
Socially Responsible Investment Index Announcement with
event study methodology

That being said, our findings suggest that the creation ofThrough our application of motivation and cross-cultural

Practical implications

CSR Research Projects Fundedby CEIBS in 2018

Wang, Taiyuan
Lu, Wenzhen
Chng, Han Ming DanielZhao, Xiande

How does entrepreneurial orientation affect companies’ choiceon assuming social responsibilities
How to implement CSR: category, business model andsocial impact
Research on suppliers’decision-making mechanism ofenvironmental protection innovation

bottom-up approach to CSR might be most effective.

employees’ perceptions of organizations’ socially respon-

For those lower in individualism, who may prefer more

sible actions can pay off in terms of increased work

external forms of regulation, managers might emphasize

engagement, and that such an effect can be expected

explicit expectations surrounding employees’ complianceacross a wide range of cultural regions and among

with and participation in CSR activities. Here, a top-down

employees with varied cultural values. This finding notapproach to CSR management might be more effective in

only suggests a positive impact of perceived CSR thatstrengthening the CSR perceptions-work engagement

goes beyond the central goals of specific CSR initiatives

link. In sum, when implementing CSR initiatives, manage-(e.g., having a positive carbon footprint and providing aid

ment should not only consider approaches to enhance

to the local community), but it also highlights the impor-employees’ awareness of CSR activities but also consider

tance of making employees aware of CSR initiatives thatthe cultural diversity of the workforce in developing

exist within the organization. Research has shownstrategy around the CSR context. Such efforts are likely

considerable variance in what employees do and do not

to result in an engaged workforce through enhanced CSRknow about the objective CSR actions taken by theirperceptions and the culturally bound management of

employers. Not only does this suggest a lost opportunity

CSR initiatives.

Carney, Richard Wayne

Price, Lydia JeanThe fluctuation of CSR index and its impact on corporate value
How do CSR reports promote the green development ofChinese companies?

Rui, MengWhite paper on CSR of listed companies in China

Moran, Peter Francis
Lee, Byron Yee SingA micro-survey on the relationship between CSR

Kim, Tae-Yeol

and profits
The curvilinear relationship between individuals’
perception of CSR and job performance

to strengthen the workforce through work engagement, italso suggests that in cases where CSR awareness is low,
so too would be CSR-RA, in that employees are unlikely
to perceive autonomy in participating in CSR if they haveno awareness of what opportunities for participation even

Original paper “Corporate social responsibility and employee engagement: The moderating role of CSR-specific relative autonomy and individualism”,
published in Journal of Organizational Behavior, Special Issue Article, 2018 (39): 559-579. Visit https://onlinelibrary.wiley.com/doi/abs/10.1002/job.2282 forthe original paper and references.

090｜CEIBS CSR Report 2018 · CEIBS CSR Research

CEIBS CSR Research · CEIBS CSR Report 2018｜091

Research on CSR
Reports of A-Share
Listed Companies

2018 RESEARCH ON CSR REPORTS
OF A-SHARE LISTED COMPANIESCentre for Accounting and Financial Big Data Research, Shanghai University of Finance and Economics
Center for Wealth Management, China Europe International Business School

INTRODUCTION
Subjects
2017 Annual CSR Reports published by A-share listed companies between January and June in 2018.

Methods
The 2018 Research on CSR Reports of A-Share Listed Companies was compiled by referring to methodsof designing CSR indicators adopted at home and abroad and authoritative guides on compiling CSR
reports, looking into Chinese social concerns, and leveraging big data technologies, in order to build adistinctive CSR indicator system.

Data Sources
Most data in the research came 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 Genius Financial Database.

Data Processing
The research adopted the approach of combining big data technologies with manual correction.
1) Data collection: Distributed crawling was used to collect a large amount of raw data from websites ofcompanies and regulatory authorities, and mainstream search engines.
2) Data cleaning: The data were deeply cleansed by correcting erroneous values, eliminating duplicates andoutliers, and ensuring consistency according to predefined rules.
3) Data matching: The required information was accurately identified from a large number of social responsibility reports, news reports and announcements.
4) Data mining and visualization: Manual processing and machine learning were integrated to extract andmine needed data from mass data (such as text information) and visualize relevant findings.

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜095

CONTENTS
Abstract

ABSTRACT
According to Article 86 of the General Provisions of the Civil Law of the People’s Republic of China promulgated in March 2017, “A for-profit legal person who engages in business activities shall abide by businessethics, maintain transaction security, accept government and social supervision, and assume social
responsibility”. In October 2017, General Secretary Xi Jinping highlighted at the 19th CPC National

Overview of CSR Report Disclosureof A-Share Listed Companies

Congress that socialism with Chinese characteristics has entered a new era and the principal contraction
facing Chinese society is that between the people’s ever-growing needs for a better life and unbalanced
and inadequate development. His remarks on a series of important issues clarified the direction of practicing social responsibility for companies.

Analysis of Reporting Entitiesof 2017 CSR Reports

Disclosure of the corporate social responsibility report (hereinafter as CSR report) can help the company
maintain good relations with stakeholders, keep a favorable corporate image, maintain its reasonablevaluation, and make public its annual fulfillment of social responsibility. The research is carried out bylooking into the definition, reporting entities and indicators of the CSR report and its impact on stock prices

Analysis of Indicators
in 2017 CSR Reports

in the secondary market.
As an important piece of non-financial information released by a listed company, the CSR report can help
us analyze and track the company’s performance and understand how it maintains the corporate image.
The CSR report can also improve the company’s information environment, thereby providing investors with

Year-on-Year Comparisonof Indicators in CSR Reportssuggestions when they make investment decisions. Since CSR guidelines were issued in succession in2006 by the China Securities Regulatory Commission, the Shanghai Stock Exchange and the Shenzhen
Stock Exchange, an increasing number of companies have disclosed CSR reports, which have grownlonger and richer in content year by year. Companies that release CSR reports vary considerably in indus-

Analysis of Economic Valueof CSR Reports

try, region, organization type and listed segment. This research collects and evaluates the financial andnon-financial information released by listed companies to predict their development prospects, thus
helping investors make decisions based on the information in CSR reports.
The research classified the indicators in the CSR report into seven groups and had the following findings:

Appendix:
Top 50 Companies basedon 2017 CSR Reports(1) Social responsibility management: A low proportion of companies performed social responsibility
management practices that have higher execution costs. Due to the lack of mandatory requirements,
only a few companies engaged third parties for CSR report assurance;(2) Company operations and management: A growing number of companies have attached more importanceto strategic cooperation and sharing as the Belt and Road Initiative rolls out. The regulatory authority has
been tightening the grip on companies in terms of anti-corruption and compliance, especially in thefinancial industry which is susceptible to compliance risks;(3) Product quality and innovation: The number of patents and R&D expenditures rose slightly. Companies
in Central and East China were top performers in R&D and innovation;(4) Responsibility to employees: Companies are placing more focus on employees’ rights and benefits. Over
70% of the companies disclosed compensation incentives, among which private businesses were themost active and state-owned enterprises were more eager to disclose their supplementary benefits toemployees;

096｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜097

(5) Diversity and equal opportunities: The status and impact of female directors, supervisors and executives

OVERVIEW OF CSR REPORT DISCLOSURE

have yet to be improved. The non-discrimination policy was underappreciated and it varied greatly by
the organization type;

OF A-SHARE LISTED COMPANIES(6) Environmental responsibility: State-owned and foreign-funded enterprises were more active in fulfilling
this responsibility, while private enterprises had a weaker sense of environmental responsibility. The(7) Social contribution and charity: Listed financial companies and state-owned enterprises showed a stronger sense of social responsibility, with the highest degree of engagement and biggest investment in thiseffort. Only a few companies disclosed the social contribution value per share and its calculation criteria
should be further specified.
CSR reports are less reliable than information in financial statements because they feature the combinationof mandatory disclosure and voluntary disclosure and a low proportion of third-party assurance. But as akind of non-financial information, the CSR report is an effective supplement to financial information and has
a significant bearing on investors’ decisions. To examine the economic value of the CSR report, theresearchers constructed an investment portfolio according to the report information and checked its profitability.
The research found that after buying the companies with the highest CSR scores and selling the ones with

Number of Disclosed Reports:
The number grew steadily, but the proportion of disclosure remained low
CSR disclosure as a part of information disclosure by listed companies has received increasing concern from the management. As a result, the number of disclosed CSR reports increased year by year. Except for 2008 and 2009, when the market
was influenced by the Shanghai Stock Exchange’s new policy of making CSR disclosure mandatory for three types ofcompanies,1 the number of companies that published CSR reports for the first time remained stable in other years. In 2018,856 companies listed on Shanghai and Shenzhen Stock Exchanges disclosed 2017 annual CSR reports (including sustainability reports), 64 more companies than the previous year (8.08% of YoY growth). Among them, 78 companies published
CSR reports for the first time, an increase from last year’s 63. But it is noteworthy that only one fourth of A-share companies
released CSR reports and the rate of disclosure was still low.

the lowest scores according to their 2017 CSR reports, the portfolio earned an accumulative excess return2006–2017 Number of CSR Reportsof 3.46% in the following three months, i.e. an annualized rate of 13.84%. Moreover, among the factors that
Number of Disclosed CSR Reports

constitute social responsibility, four elements—social responsibility management, product quality andinnovation, environmental responsibility, social contribution and charity—played essential roles in boosting
the profitability of investment strategies.
This research has described and studied CSR reports in a systematic way, which can help regulatory
authorities have a better understanding of CSR disclosure in the capital market and enable investors,
intermediaries and securities analysts to improve their investment decisions by making full use of CSR
reports. This research aims to stimulate the efficiency of the overall economy by making resource allocation
more efficient in the capital market and provide references for decisions on critical issues such as pollution
control and economic transition.

642
530

671

856

704

743

792
Number of CSR Reports Disclosed
for the First Time

number of companies which admitted to being punished for environmental missteps was still small;

582

459
369

332

0

19
2006

42

34
2007

116
2008

2009

85

67

75

2010

2011

2012

42

51

55

63

2013

2014

2015

2016

78
0
2017

Number of Times of Disclosure:
Nearly a half disclosed at least 8 times; a few companies did so only once
Between 2007 and 2018, a total of 1,016 A-share companies disclosed annual CSR reports. The reporting quality varied
greatly and there was a pronounced gap in companies’ awareness of disclosure. To be specific: 1) A few companies madeinsufficient effort at CSR reporting. Except for the 78 companies that disclosed CSR reports for the first time in 2018, 65
companies disclosed only once between 2007 and 2018; 2) Nevertheless, a fair number of companies were active in CSR
disclosure. Nearly a half of the companies published reports at least 8 times in the same period; 3) A small number ofcompanies took the lead in CSR disclosure. 21 companies published CSR report 11 times, and 7 companies even madesuch effort on an annual basis for 12 years in a row.

1

098｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

In December 2008, the Shanghai Stock Exchange issued the Notice Concerning Listed Companies’ Preparation for 2008 Annual Reports, which mandated CSR
report disclosure for three types of listed companies (firms included in the SHSE Corporate Governance Index, firms with overseas listed shares and financial firms).

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜099

2006–2017 Number of Times of CSR Disclosure

ANALYSIS OF REPORTING ENTITIES

257
Number of Companies

OF 2017 CSR REPORTS
143
115
81
65

78

66

78
54

51

21

7

0
1

2

3

4

5

6

7

8

9

10

11

12

Number of Times

Moreover, the length of a CSR report can reflect the amount of disclosed information to some extent. We have found thatcompared with reports with fewer pages, reports with more pages cover more diversified forms of social responsibility andDistribution of Reporting Entities by Industry:
The manufacturing industry had the largest number of reports
but a low level of disclosure

more specific ways of fulfillment. The average number of report pages increased annually from 2012 to 2017. It reached 29
Of all the 856 CSR reports published in 2018, there were huge differences in the number of reports between different industries.2

pages in 2017, rising slightly from 28 pages in 2016.

The largest amount of reports came from the manufacturing industry, whose 428 reports accounted for 50% of the total.
According to statistics about the pages of CSR reports in 2012–2017: 1) The proportion of reports within 10 pages remained

But of all the A-share manufacturing companies, only 19% disclosed CSR reports, signifying a low level of disclosure. The

the largest for the first few years, but it decreased annually until it was overtaken in 2016 by the proportion of reports withfinancial industry showed the highest level of disclosure as 69 financial firms published CSR reports, making up 80% of

11–20 pages. 2) Despite the upward trend in the proportion of reports over 20 pages, reports below 20 pages still made up

A-share financial companies. This is mainly because financial firms are required by the Shanghai Stock Exchange tomore than 50%, and the report length in general was less than satisfactory. 3) The report length varied significantly fromdisclose CSR reports.

company to company. The longest report had 202 pages while the shortest only 2 pages.
2017 Distribution of CSR Reporting Entities by Industry
2012–2017 Length of Annual CSR Reports
31–50

over 50

19%

17%

15%

14%

13%

12%

15%

14%

14%

13%

11%

15%

11%

14%

13%

13%

13%

11%
2015 201720132015 201720132015 201720132015 2017

2013

80%

69
39%

Real Estate

49

Information Transmission, Software and IT Services

49

Wholesale and Retail Trades

46

Transport, Storage and Post

45

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

45

41%

Mining32

43%

Construction

26

Culture, Sports and Entertainment

21

Leasing and Business Services

11

0%
2013

28%
45%

27%
37%
22%

35

Others2015 2017

19%

20%

0

0%
Number of companies that
disclosed reports

2

100｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

19%

428

Finance

29%

29%

21–30

28%

29%

30%
26%

27%

10–20

24%

32%

30%

36%
Proportion

34%

within 10 pages

Manufacturing% of companies that disclosed reports
in this industry

Industrial classification of reporting entities is based on The Guidelines for the Industrial Classification of Listed Companies issued by China Securities Regulatory
Commission.

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜101

Distribution of Reporting Entities by Region:
The majority came from East China;
Yunnan had the highest rate of disclosure

Distribution of Reporting Entities by Organization Type:SOEs as the majority; proportions of private andforeign-funded enterprises on the rise

Of all the 856 CSR reports published in 2018, there were huge differences in the number of reports between different regions.

Of all the 856 CSR reports published in 2018, SOEs published 494 reports, accounting for 57.71%, a slight decrease from

(1) Companies in East China produced the largest number of reports (594) and those in Northeast China the smallest
number (41). About 24% of listed companies in each region disclosed reports, with small regional differences.

the previous year. Private enterprises published 320 reports and Sino-foreign joint ventures 38 reports, taking up 37.38%
and 4.44% respectively, both of which showed the upward trend.

2017 Distribution of CSR Reporting Entities by Region
2013–2017 Distribution of CSR Reporting Entities by Organization Type24.46%

24.15%

24.38%
23.43%

SOEs

Proportion

Number of companies

594

108
41

0.00%

0
East

CentralWest

62.59%

2014

61.65%

2015

61.24%

2016

60.10%

2017
Private enterprises

113

2013

Northeast

57.71%

2013

33.08%

2014

33.66%

201534.19%

2016

34.72%

201737.38%(2) Looking into the distribution by province,3 we can see that A-share companies in Beijing published the most reports

Sino-foreign

2013

3.58%

(119), followed by Guangdong and Shanghai. As for the disclosure rate, Yunnan Province topped the ranking as its 17

joint ventures

2014

3.98%

2015

4.04%

2016

4.29%

reporting entities accounted for 52% of local listed companies, followed by Fujian (47%) and Tianjin (42%).

20172017 Distribution of CSR Reporting Entities by Province
Others38%

119

Beijing

17%

101

Guangdong

33%

94

Shanghai

17%

74

Zhejiang
Fujian61

Jiangsu

59

47%
15%

Anhui

26

Sichuan

24

Tianjin21

Liaoning

20

Hubei

20

Yunnan17

Xinjiang

15

Hebei

15

Hunan

13

Jiangxi

12

Shanxi

11

0.71%

2015

0.54%

2016

0.88%

2017

0.47%
% of disclosed reports

25%
20%
42%
27%
20%
52%
28%
27%
13%
30%
23%

0

0%
Number of Companies

3

2014

41%

32

Henan

0.75%

0%
21%

41

Shandong

4.44%

2013

Proportion

For the sake of comparability, provinces with fewer than 10 reports are not included here.

102｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜103

Distribution of Reporting Entities by Board:
60% came from the SSE; a few from the ChiNext but the proportion was on the rise

ANALYSIS OF INDICATORSIN 2017 CSR REPORTS

Of all the 856 CSR reports published in 2018, 517 reports came from the companies listed on the Shanghai Stock
Exchange, 60% of the total; 339 reports or 40% came from the companies on the Shenzhen Stock Exchange, among which
139 were from the SZSE Main Board, 114 from the SME Board, and 56 from the ChiNext. In general, 36.08% of A-sharecompanies listed on the SSE and 16.09% of those on the SZSE disclosed CSR reports. Among the three boards of theSZSE, the Main Board had the highest proportion of disclosure at 29.96%, followed by the SME Board at 15.77% and the
ChiNext at 7.67%.

Indicators in 2017 CSR reports fall into 7 categories: (1) social responsibility management, (2) company operations andmanagement, (3) product quality and innovation, (4) responsibility to employees, (5) diversity and equal opportunities, (6)environmental responsibility, and (7) social contribution and charity. This research will evaluate the CSR awareness andperformance of reporting entities by analyzing each indicator in the above categories.
It is worth noting that different from CSR indicators released by other institutions, these indicators are based on various big

2017 Distribution of CSR Reporting Entities by Board

data research methods and data processing procedures including data collection, cleansing, and mining. For instance, we
SSE A Share517

SZSE A Share

36.08%

339

1) SZSE Main Board

139

2) SZSE SME Board

144

3) ChiNext

company news from their websites, websites of regulatory authorities, and mainstream search engines. We cleansed these

16.09%
29.96%
15.77%

56

technologies were also used for data mining and visualization. In conclusion, the big data thinking and methods have been
quality and safety disputes, (3) patents, (4) R&D expenditure, (5) share of R&D personnel, (6) disputes concerning staff healthand safety, (7) female executives, (8) female directors, (9) all-male directors, supervisors and executives, (10) environmental

0%
Number of companies

data according to predefined rules and identified needed information from vast CSR report texts and news reports. Big data
adopted throughout the research and applied specifically in the following areas: (1) accounting irregularities, (2) product

7.67%

0

adopted distributed crawling to acquire CSR reports of listed companies, their annual reports, penalty information and% of companies listed on each board

According to 2013–2017 statistics, A-share companies listed on the SSE contributed an increasing proportion of annual
CSR reports over the years while the SZSE saw a slight decline in its share of reports, except for the ChiNext, where theproportion of companies disclosing CSR reports increased from 4.32% in 2013 to 6.54% in 2017.

penalty, (11) donations, and (12) layoffs.

CSR INDICATOR SYSTEM
Social responsibility
management(1) dedicated column on website(3) leading team(2) education and training(4) report assurance(5) report inclusivenessCompany operations
and management(1) strategic cooperation and sharing (3) business integrity(5) governance commendation(2) anti-bribery and anti-corruption(4) governance commendation(6) financing disputes(1) quality management(4) customer satisfaction(7) R&D expenditure(2) quality commendation(5) product quality andsafety disputes(8) share of R&D personnel

2013–2017 Distribution of CSR Reporting Entities by Board
SSE A ShareSZSE SME Board

2013

57.97%

2014

58.81%

2015

59.49%

2016

59.72%

201760.40%

2013

ChiNext(3) after-sales service

18.32%

2015

16.96%

2016

17.68%

2017

16.82%

2013(9) share of technical personnel(6) patents

19.37%2014

SZSE Main Board

Product quality
and innovation

Responsibility toemployees(1) compensation incentives(4) communication with employees(2) supplementary benefits(5) staff caring(3) on-the-job training(6) safety management system(7) training on safe production(8) occupational health andsafety certification(9) disputes concerning staff
health and safety

18.33%

2014

18.32%

2015

17.63%

2016

16.79%

201716.24%

Diversity andequal opportunities

Environmental
responsibility

4.32%

2013
2014

4.55%

2015

5.92%

2016

5.81%

2017

6.54%

Social contribution
and charity

0%% of disclosed reports

104｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies(1) female executives(3) all-male directors, supervisorsand executives(4) vulnerable groups(2) female directors(1) environmental benefit(4) circular economy(7) environmental certification(2) energy saving(5) green office(8) environmental commendation(3) reduction of the three wastes(6) environmental protection
and public welfare(9) environmental penalty(1) donations(4) contribution to education(7) contribution to employment(2) social contribution value per share (5) volunteering(3) charitable activities(6) international aid(5) equal opportunities(8) contribution to economic
growth(9) layoffs

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜105

(4) Report assurance: 29 companies had their 2017 CSR reports assured by the third party, accounting for only 3.39%

Social Responsibility Managementof the total. Due to the lack of mandatory requirements, only a few companies had third-party assurance. Of the 29 companies,
14 were from the financial industry, taking up nearly a half of the companies with assured reports; 22 were SOEs, accounting

This part includes (1) dedicated column on website, (2) education and training, (3) leading team, (4) report assurance,

for 75.86%. All the CSR reports that received third-party assurance were from the companies in East China.

and (5) report inclusiveness. These 5 indicators are used to evaluate the reporting entity’s awareness and performanceof social responsibility management.

2015–2017 Report Assurance

Among the 856 companies that disclosed 2017 CSR reports4:

Companies

By industry–2017
Finance

14

Transport, storage and post

4

Manufacturing

4year-on-year. Broken down by industry, 69.23% of companies in the construction industry5 set up a dedicated column on

Real estate2

website, representing the highest proportion. By organization type, 49.39% of SOEs disclosed such effort, which was theWholesale and retail

2

Mining1

Production and supply of electricity, heat, gas and water

1

Construction

1(1) Dedicated column on website: 392 companies set up a CSR column on the official website to display their fulfillment

31

31

29

of social responsibility, accounting for 45.79% of all the companies that disclosed CSR that year, up by 4.12%

highest proportion and 10% higher than private enterprises. By region, a higher proportion of companies in East and West
China had a CSR column than in Northeast and Central China.

(2) Education and training: 241 companies offered CSR training in areas such as anti-corruption, compliance and0
2015

awareness of social responsibility, accounting for 28.15% of the total, up by 5.04% year-on-year. By industry, the financial

2016

By organization type–2017

By region

Companies

SOEs

East

22

PrivateEast

5

Sino-foreign joint ventures

East

2

2017

industry had the highest proportion of companies offering CSR training at 40.58%, due to its emphasis on anti-corruption
and compliance. By organization type, 30.77% of SOEs had such training, which was the highest proportion and 6.71%
higher than private enterprises. By region, a higher proportion of companies in Central and West China offered CSR training
than in East and Northeast China.

(3) Leading team: 152 companies set up a leading team dedicated to CSR management, accounting for 17.76% of thetotal, a mild increase from the previous year. 42.31% of construction companies set up a CSR leading team, the highest
rate among all industries. 23.68% of SOEs disclosed such arrangement, the highest among of all types of organization and
15% higher than private enterprises. East China had the highest rate among all regions at 19.36% and Northeast China thelowest at 4.88%.

(5) Report inclusiveness: 84.70% of 2017 CSR reports covered a full range of information about social responsibility,
thanks to the Guidelines for the Preparation of the “Report on Performance of Corporate Social Responsibility” promulgatedby the Shanghai Stock Exchange. More foreign-funded companies passed muster in terms report inclusiveness than SOEs.
The proportion of the companies with inclusive reports was similar in East, Central, and West China, which was higher thanthat of Northeast China.

2015–2017 Dedicated Column on Website, Education and Training, and Leading Team
website column
41.32%

education and training

45.79%

41.67%

19.11%

0%

2015–2017 Report Inclusivenessleading team

87.08%

17.55%

20162017

Website Education
columnLeadingteam

By organization type–2017

WebsitecolumnEducation

Leading
team

Finance49.28%

40.58%

31.88%

SOEs

49.39%

30.77%

23.68%

Construction

69.23%

38.46%

42.31%

Sino-foreign joint ventures

47.37%

28.95%

21.05%

Mining56.25%

37.50%

31.25%

Private enterprises

39.69%

24.06%

8.44%

Manufacturing45.09%

31.31%

14.02%

Wholesale and retail45.65%

28.26%

15.22%

Leasing and business services

54.55%

27.27%

9.09%

By region–2017

31.11%

24.44%

24.44%

WebsitecolumnEducation

Transport, storage and post

Leading
team

Information transmission, software and IT services

24.49%

18.37%

12.24%

West China

48.15%

32.41%

16.67%

Real estate

55.10%

16.33%

14.29%

Central37.17%

31.86%

15.04%

Production and supply of electricity, heat, gas and water 57.78%

13.33%

26.67%

East

47.31%

26.94%

19.36%

33.33%

0.00%

4.76%

Northeast

41.46%

24.39%

4.88%

5

Proportion

Sino-foreign joint ventures

92.11%

Private enterprises

85.94%

SOEs

83.60%

17.76%

By industry–2017

4

By organization type–2017

By region–2017

2015

Culture, sports and entertainment

84.70%

28.15%

23.11%
16.02%

89.14%

0%
2015

2016

ProportionWest

86.11%

East

85.69%

Central82.30%

Northeast

73.17%

2017

The samples for analysis are the 856 companies that disclosed 2017 CSR reports; it will not be repeated hereinafter.
The industries that disclosed fewer than 10 CSR reports are excluded from industry comparison (the same below).

106｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜107

Conclusion and Analysis of “Social Responsibility Management”

Company Operations and Management

The above “social responsibility management” indicators can reveal how much a company values social responsibility.

This part includes the following six indicators that reveal the reporting entities’ positive performance and negative

Sound social responsibility management is not only the prerequisite for a high-quality CSR report, but also the guarantee

attention they received in terms of company operations and management: (1) strategic cooperation and sharing, (2)for the company’s active role in addressing social concerns and its fulfillment of responsibility.

anti-bribery and anti-corruption, (3) business integrity, (4) governance commendation, (5) accounting irregularities, and(6) financing disputes.

Three of these indicators, ranked by the execution cost from low to high, are “dedicated column on website” “educationand training” and “leading team”. The share of companies fulfilling the indicator decreases as the execution cost rises. Thatshows companies tend to take cost into consideration and choose practices of lower cost to perform social responsibility.

(1) Strategic cooperation and sharing: 34.46% of companies disclosed in their 2017 CSR reports that they had worked
with business partners to set up the strategic sharing mechanism and platform, such as the long-term strategic cooperationagreement, joint experiment base and shared database, up by 4.79% from the previous year. In terms of industry, driven by

It is noteworthy that SOEs deliver the best performance on these three indicators. CSR is inseparable from business owner-

the Road and Belt Initiative, more listed transport companies have cast their eyes on the international market and begun toship and control. Therefore, companies of different types and with different stakeholders vary greatly from each other in thego global for in-depth strategic collaboration. 57.78% of transport companies disclosed their strategic cooperation withidea and management of social responsibility. Since SOEs are held to higher expectations in terms of social responsibility

partners, representing the highest rate of disclosure. By organization type, there were small differences in the disclosure

by the government and the general public, they choose to take on social responsibility voluntarily as a part of the strategic

rate between different types of companies and private enterprises had a slightly higher rate. By region, the disclosure ratevision. The strong performance of SOEs, pioneers of social responsibility management, reflects their deep commitment in

was higher in East China than in the West.

this area. In contrast, private enterprises show the weakest awareness of social responsibility management as they rank atthe bottom on these three indicators.

(2) Anti-bribery and anti-corruption: 48.71% of companies revealed in 2017 CSR reports their measures againstcommercial bribery and corruption and precaution against non-compliance. By industry, 59.42% of financial companies

Indicator “report assurance” has the lowest proportion of fulfillment in this part. Due to the lack of compulsory requirement

disclosed anti-corruption measures, representing the highest proportion of disclosure, which was largely attributed to theand the high execution cost, only a few companies (mostly SOEs) engaged a third party to audit their CSR reports while overstrict requirements for compliance in the financial industry. By organization type, 54.66% of SOEs disclosed such

90% of reports were published without third-party assurance, whose credibility was dubious. External audit, as a special

measures, higher than that of private enterprises, reflecting the strong execution of SOEs in the national campaign against

way of economic control, serves as the effective supervisory and safeguard mechanism in corporate governance. As thecorruption. By region, Northeast China had a lower disclosure rate while other regions shared similar figures.

auditing culture grows more sophisticated, non-financial information is incorporated into the audit scope. Given that thequality of the CSR report, an important piece of non-financial information, has received growing attention from the public,
it will be an inevitable trend for listed companies to have their CSR report audited.
Indicator “report inclusiveness” has the highest proportion of fulfillment, thanks mainly to official guidance on CSR. The(3) Business integrity: 83.41% of companies disclosed their adherence to business integrity and fair competition both inbusiness philosophy and practice, similar to that of the previous year. Construction companies showed strong performanceon this indicator, with 96.15% of them stressing the importance of business integrity. There were only mild differences
between companies of different types and in different regions.

Shenzhen Stock Exchange released the Guidelines for Social Responsibility of Listed Companies; the Shanghai Stock2016–2017 Strategic Cooperation and Sharing, Anti-bribery and Anti-corruption, Business Integrity

Exchange issued the Notice on Strengthening Listed Companies’ Assumption of Social Responsibility and on Issuing theStrategic cooperation and sharing“Guidelines on Listed Companies’ Environmental Information Disclosure”, and the Guidelines for the Preparation of the“Report on Performance of Corporate Social Responsibility”. According to these documents, listed companies are encour-Business integrity

29.67%
30.81%

2016

aged to build a sound social responsibility system and check its implementation on a routine basis. The authorities haveAnti-bribery and anti-corruption

84.85%

also improved CSR regulations through these guidelines to provide better references for listed companies and help them

34.46%

cover a wider range of information when preparing the CSR report.

48.71%

201783.41%

Listed companies still have a long way to go in social responsibility management and SOEs have played an exemplary roleso far. Future progress is dependent on the general awareness of social responsibility as well as the guidance and regulation by supervisory authorities.

108｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

0%Strategic
cooperationand sharing

Anstibribery andcorruption

Business
integrity

Transport, storage and post

57.78%

48.99%

77.78%

Private enterprises

35.00%

40.31%

83.44%

Construction

57.69%

50.00%

96.15%

SOEs

34.21%

54.66%

83.00%

Leasing and business services

54.55%

36.36%

54.55%

Sino-foreign joint ventures

34.21%

47.37%

89.47%

Culture, sports and entertainment

47.62%

33.33%

71.43%

Real estate32.65%

46.94%

77.55%

Information Transmission, Software and IT Services

32.65%

51.02%

83.67%

Finance31.88%

59.42%

84.06%

Manufacturing31.31%

47.66%

85.75%

East

36.36%

49.66%

82.83%

Production and supply of electricity, heat, gas and water

31.11%

51.11%

86.67%

Northeast

31.71%

31.71%

82.93%

Wholesale and retail trades

28.26%

52.17%

86.96%

Central30.09%

49.56%

84.96%

Mining28.13%

46.88%

81.25%

West

29.63%

49.07%

85.19%

By industry–2017

AntiBusiness
By organization type–2017 Strategiccooperation bribery and integrity
and sharing corruption

By region–2017

Strategic
AntiBusinesscooperation bribery and integrity
and sharing corruption

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜109

(4) Governance commendation: 176 companies, 20.56% of CSR reporting entities in 2017, were commended for good
governance or honored with awards such as the Best Board Award for Listed Companies and the Best Corporate Gover-Conclusion and Analysis of “Company Operations and Management”

nance Practice Award. By organization type, 23.89% of SOEs and 15.95% of private enterprises were commended forgovernance, representing the highest rate and the lowest rate respectively. By region, listed companies in the East had theCompany operations and management is the foundation for a company to assume social responsibility and better corporate

highest rate of receiving commendation at 23.06% and the Northeast the lowest at 12.20%.

governance can ensure better fulfillment of social responsibility. According to Article 86 in the General Rules of the Civil Lawof the People’s Republic of China promulgated in 2017, “A for-profit legal person who engages in business activities shallabide by business ethics, maintain transaction security, accept government and social supervision, and assume social
Governancecommendation

responsibility.” Listed companies, as the backbone of for-profit legal persons, are closely watched by the general public in

SOEs

23.89%

terms of operations, management, and performance of social responsibility. The indicators in this part have offered valuable

Sino-foreign joint ventures

18.42%

references concerning company operations and management:

Private enterprises

15.94%

By organization type–2017

2017 Governance Commendation

Governancecommendation

By region–2017

20.56%
0.00%

100.00%23.06%

opportunities and challenges. General Secretary Xi pointed out at a symposium marking the fifth anniversary of the Belt andWest

15.74%

Central15.04%

Road Initiative that the world is undergoing major development, changes and adjustments. We should have strategic andNortheast

12.20%

nies disclosed accounting irregularities in 2017, accounting for 9.11% of the total, down by 1.24% year-on-year. 14.49% of
financial companies committed accounting irregularities, the highest rate of all industries. By organization type, private
enterprises had the highest rate at 11.56% and SOEs the lowest at 7.29%.

had financing disputes in 2017, accounting for 10.05% of the total and increasing by 0.83% from the previous year. 23.19%
of financial companies disclosed financing disputes, the highest among all industries. 20.37% of companies in West China
had such disputes, higher than other regions.

in the hope of linking Chinese dream with the global dream and blazing a trail of peaceful development and win-win cooperation. In this context, a growing number of listed companies have jumped at the opportunity to work with business partners
and share fruitful results. The transport industry, in particular, is blessed with new opportunities introduced by BRI-related
policies. Several transport companies have entered into strategic cooperation with upstream and downstream companies“Anti-bribery and anti-corruption” is both a hot topic in the society and a major concern of the government. Since the 18th
National Congress of the Communist Party of China, especially after the Second and Third Plenary Sessions of the 18th
Party Congress, the CPC Central Committee has strengthened the initiatives to improve Party conduct and ensure clean“eight-point decision” and over ten prohibitions to address the practice of formalities for formalities’ sake, bureaucratism,

Accounting
irregularities

Financing
disputes

Finance14.49%

23.19%

Real estate

8.16%

14.29%

cracked down on corruption with growing intensity in recent years. The investigation of several senior executives for serious

Mining6.25%

12.50%

violations of laws and regulations caused quite a stir in the society. We can tell from the indicator “anti-corruption and

Manufacturing

9.11%

9.35%

Wholesale and retail trades

13.04%

8.70%

anti-bribery” that the proportion of SOEs disclosing anti-corruption measures was significantly higher than that ofInformation Transmission, Software and IT Services

12.24%

8.16%

Production and supply of electricity, heat, gas and water

2.22%

6.67%

Culture, sports and entertainment

4.76%

4.76%

Transport, storage and post

2.22%

4.44%

By organization type–2017

Accounting
irregularities

Financing
disputes
10.31%

By industry–2017

financing disputes

10.35%
9.22%
9.11%
10.05%
0%
By region–2017transformation unprecedented in a century. China keeps abreast with the times by proposing the Belt and Road Initiative,

government and the campaign against corruption. For the sake of Party conduct, the authority has introduced the

2016–2017 Accounting Irregularities and Financing Disputes

2017

global vision and stay alert to risks while keeping an eye on historic opportunities so as to navigate through this profoundto strengthen their business chain and they are eager to go global for international collaboration.

(6) Financing disputes: By referring to litigation and penalty information in open databases, we find that 86 companies

2016

certain industries. As the Belt and Road Initiative (BRI) is rolled out, Chinese listed companies are confronted with both

East(5) Accounting irregularities: By referring to violation and penalty information in open databases, we find that 78 compa-

accounting irregularities

Indicator “strategic cooperation and sharing” saw better performance than last year, thanks to the strong contribution fromAccounting
irregularities

Financing
disputes

West

8.33%

20.37%

Northeast

7.32%

14.63%

Private enterprises

11.56%

East

9.26%

8.42%

Sino-foreign joint ventures

10.53%

5.26%

Central

9.73%

7.08%

SOEs

7.29%

10.21%

110｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

and privilege seeking and to stamp out extravagance with public funds. Corruption is also a huge obstacle to company
development. Anti-corruption and clean governance is the foundation for a company’s competitiveness. SOEs haveforeign-funded and private enterprises, reflecting the importance that state-owned enterprises attached to this issue.

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜111

The financial industry topped all industries in terms of the rate of disclosing anti-corruption measures as well as the proportion of companies with accounting irregularities and financing disputes, which should be attributed to huge compliance

Product Quality and Innovation

risks and increasingly stringent regulation in the industry. According to the 2017 data released by the China Banking Regulatory Commission, the banking regulatory departments at all levels issued a total of 3,452 tickets to punish 1,877 institu-

This part includes 9 indicators to reflect the reporting entity’s awareness and performance in the following aspects: (1)tions and 1,547 responsible persons and fined them for nearly RMB 3 billion in all. The number of institutions subject toquality management, (2) quality commendation, (3) after-sales service, (4) customer satisfaction, (5) product quality andpenalty nearly tripled and the amount of fines increased over tenfold compared with that of 2016. Such heavy-handed

safety disputes, (6) patents, (7) R&D expenditure, (8) share of R&D personnel and (9) share of technical personnel.

regulation made 2017 the “year of regulatory tempest”. The securities sector and the insurance sector adopted the same
tough approach. Throughout 2017, China Securities Regulatory Commission made 224 decisions about administrative
punishment, imposed RMB 7.479 billion of fines (up by 74.74% YoY) and banned 44 people the entry into the securities
market (up by 18.91% YoY). The number of administrative punishment decisions, the amount of fines, and the number ofpeople banned from the market all hit a record high. China Insurance Regulatory Commission issued 37 regulatory lettersin 2017, doubling the number in 2016 (16 letters). China Insurance Regulatory Commission also issued 47 tickets and local(1) Quality management: In 2017, 469 companies disclosed in their CSR reports the measures they had taken to improve
product/service quality, such as establishing quality management systems, accounting for 54.79% of the total, basically thesame as that in the previous year. Given the high standards and strict requirement on construction quality, the constructionindustry showed the highest level of disclosure as 69.23% of the construction companies described their quality management systems or measures in the reports; the mining industry came second, at 65.63%.

insurance regulatory bureaus issued 878 tickets; these 925 tickets in total imposed over RMB 100 million of fines. The(2) Quality commendation: In 2017, 567 or 66.24% of the companies disclosed in their CSR reports that they were

stringent regulation across the financial industry has prompted financial companies to put more emphasis on compliancecommended or accredited for product/service quality. Decided by the industry features, the construction industry showed

operations as part of business strategies, make full use of the corporate governance structure, raise employee compliancethe highest level of disclosure as 92.31% of the companies listed their quality certificates or honors; the manufacturingawareness, and improve the compliance system.

industry came second, at 70.33%.

In conclusion, company operations and management is not only a key factor affecting business development, but also asolid bedrock for the fulfillment of CSR. Companies should keep up with the times and improve corporate governance so

2016–2017 Quality Management and Quality Commendation

as to better perform CSR.

Quality Management

Accounting
irregularities

Financing
disputes

Construction

69.23%

92.31%

Mining65.63%

56.25%

Manufacturing64.25%

70.23%

Wholesale and retail trades

60.87%

65.22%

Real estate

53.06%

67.35%

Information Transmission, Software and IT Services

36.73%

63.27%

Transport, storage and post

35.56%

55.56%

Finance31.88%

66.67%

Production and supply of electricity, heat, gas and water 31.11%

46.67%

28.57%

52.38%

By industry–2017

Quality Commendation

55.18%
62.63%

2016

54.79%

2017

66.24%

0%

Culture, sports and entertainment(3) After-sales service: In 2017, 361 companies disclosed in their CSR reports the measures they had taken to improveafter-sales service, such as perfecting after-sales feedback systems, accounting for 42.17% of the total, a slight increase
from the previous year. 59.42% of the companies in the financial industry disclosed their improvement in after-sales service,representing the highest proportion of disclosure by industry, and reflecting the importance they attached to customer
experience. By organization type, foreign-funded enterprises had the highest proportion of disclosure at 57.89%, and SOEs
the lowest at 41.09%.

(4) Customer satisfaction: In 2017, 300 or 35.05% of the companies disclosed in their CSR reports the customer
satisfaction investigation they had organized. By industry, the financial industry had the highest proportion of disclosure at
59.42%; by organization type, foreign-funded enterprises had the highest proportion of disclosure at 44.74%, and private
enterprises the lowest at 27.50%.

112｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜1132016–2017 After-sales Service and Customer Satisfaction
After-sales service

After-sales
service

Customersatisfaction

Finance59.42%

59.42%

Manufacturing49.07%

35.75%

Wholesale and retail trades

41.03%

32.61%

Transport, storage and post

40.00%

31.11%

Information transmission, software and IT services

36.73%

34.69%

Mining31.25%

50.00%

Production and supply of electricity, heat, gas and water

31.11%

26.67%

Real estate

28.57%

32.65%

Construction

19.23%

23.08%

Leasing and business services

18.18%

9.09%

After-sales
service

Customersatisfaction

By industry–2017

Customer satisfaction

39.27%

201629.17%
42.17%

201735.05%

By organization type–2017

0%

Sino-foreign joint ventures

57.89%

44.74%

Private enterprises

42.50%

27.50%

SOEs

41.09%

39.47%

2016–2017 Average Number of Patents

2016–2017 Average R&D Expenditure(RMB 10,000)
53,043.87

124

108

2016–2017 Average Share of R&D Personnel

47,905.89

0

0
2017
By region–2017

Average number ofpatents

13.68%

2017

2016

0%
2017

2016

13.37%

2016

Average R&D
expenditure

Average share oftechnical personnel

Average share of
R&D personnel

East

153.8563,195.96

14.14%

19.71%

Central

69.99

35,185.60

13.72%

17.04%

West

51.38

28,075.28

8.95%

14.20%

Northeast

33.83

16,095.80

11.46%

15.10%

Total

124.0953,043.87

13.37%

18.44%In terms of the four indicators above, the construction industry reported 436 patents on average and RMB 2478.94 million(5) Product quality and safety disputes: By sorting the litigation and punishment information from public databasesof R&D expenditure on average, topping all industries in these two indicators. The industry of information transmission,and news reports from mainstream financial media, we have collected and summarized the incidents related to productsoftware and IT services had the highest shares of R&D personnel and technical personnel, at 39.62% and 49.13% respec-

disputes. Of the companies with CSR reports disclosed, a total of 40 companies were involved in product disputes between

tively, far above the average. The shares of R&D personnel and technical personnel of SOEs were roughly the same as those2015 and 2017, most of which came from the manufacturing industry; in 2017 alone, 15 companies were involved in productof foreign-funded enterprises; the R&D expenditures of SOEs averaged RMB 720.50 million, topped all types of organiza-

disputes.

tions and was strikingly higher than that of the foreign-funded enterprises (RMB 566.91 million); but the average number ofpatents of SOEs was lower than that of the foreign-funded enterprises. Private enterprises had relatively high shares of R&D

2015–2017 Product Quality and Safety Disputes
14

15

11

0
2015

2016

By industry–2015–2017

Product quality andsafety disputes

Manufacturing

30

Finance3Wholesale and retail trades

3

Real estate

1Construction

1

Culture, sports and entertainment

1

personnel and technical personnel, but their average R&D expenditure and the number of patents were the lowest.
By industry–2017

Average number ofpatents

Average R&D
expenditure

Average share of
R&D personnel

Average share oftechnical personnel

Construction

436.31

247,893.66

15.85%

29.20%

Mining277.7598,098.20

6.09%

12.33%

Manufacturing

181.7053,992.62

13.79%

18.71%

53.53

34,683.93

39.62%

49.13%
16.87%

Leasing and business services

1

Information transmission, software and IT services

Total

40

Production and supply of electricity, heat, gas and water

30.82

5,375.75

5.22%

Transport, storage and post

22.00

11,288.45

3.15%

8.17%

Culture, sports and entertainment

17.43

11,982.39

7.61%

13.47%

Wholesale and retail trades

13.52

26,852.51

3.90%

11.78%

Finance

9.82

14,828.55

1.37%

4.36%

Real estate

4.86

2,464.19

6.48%

22.04%

Leasing and business services

3.00

6,762.91

3.55%

9.23%

Average number ofpatents

Average R&D
expenditure

Average share of
R&D personnel

Average share oftechnical personnel

2017(6) Patents: Compared with the previous year, the average number of patents increased to 124 in 2017; East China topped
all regions with 154 patents on average, of which, Guangdong province came first with 350 patents.

(7) R&D expenditure: The R&D expenditures averaged RMB 530.44 million in 2017, which was RMB 51.39 million higher
than the previous year. East China reported the highest R&D expenditures of RMB 631.96 million, of which, Beijing topped

By organization type–2017

with RMB 1350.00 million on average.
Sino-foreign joint ventures

149.41

56,691.36

10.68%

17.14%(8) Share of R&D personnel: In 2017, the average share of R&D personnel reached 13.37%, basically unchanged from

Private enterprises

134.2572,050.11

10.88%

17.28%

the previous year. East China had the highest share of R&D personnel at 14.14%, of which, Anhui province topped at

SOEs

106.9328,931.94

17.16%

20.48%

19.96%.

(9) Share of technical personnel: In 2017, the average share of technical personnel was 18.44%. East China had thehighest share of technical personnel at 19.71%, of which, Beijing topped at 22.60%.

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Conclusion and Analysis of “Product Quality and Innovation”
With rapid economic and social development, continuous advancement of modern technology and upgrading of people’s

We observed the indicators related to R&D input, such as “R&D expenditure” “share of R&D personnel” and “share of

consumption philosophy, product quality and innovation have increasingly become the lifeblood of corporate development

technical personnel”, as well as the indicator related to R&D output such as “the number of patents” so as to gain a clear

and a major indication of companies’ core competitiveness. Responsibility for product quality is a fundamental part of CSR,

picture about the listed companies’ performance on R&D innovation. All the four indicators in 2017 have been improved toand responsibility for product innovation is a key guarantee of CSR.

varying degrees compared with the previous year. East China with relatively developed economy outperformed otherAs an integral part of CSR, product and service quality has drawn increasing attention of the general public. Companies, as
the most common organizational form in society, provide people with various products and services to satisfy their clothing,food, housing and transportation needs. Excellent products will be granted honorable title and exempted from inspection
once they win the recognition and trust of society; companies with product quality problems will be condemned andopposed by society, thus suffering huge economic and reputation losses. It is a basic requirement of CSR for companies toattach high importance to their product/service quality.
In this part, the indicators related to product/service quality are ranked from the highest disclosure proportion to the lowest
as follows: “quality commendation” “quality management” “after-sales service” and “customer satisfaction”. The listedcompanies were more inclined to disclose external reviews rather than internal measures, and gave lower attention to theafter-sales feedback of products and services. More specifically, the construction industry topped all industries with theregions in terms of “R&D expenditure” “share of R&D personnel” and “share of technical personnel”, and also had thehighest average number of patents. By province, Beijing disclosed the largest amount of R&D expenditure but its average
number of patents was lower than that of Guangdong. By industry, the information transmission, software and IT services
industry boasted the highest share of talented personnel, while the construction industry topped in terms of R&D expenditure and the average number of patents. By organization type, SOEs had the highest amount of R&D expenditure, followed
by foreign-funded enterprises, but foreign-funded enterprises had a greater average number of patents than SOEs, indicating their difference in efficiency of R&D input and output.
Product and service quality and innovation are an important part of CSR with large room for improvement as indicated by
the data above. Companies should give more attention to this aspect so as to enhance their core competitiveness andsense of social responsibility.

highest disclosure of “quality commendation” and “quality management”. Construction quality is not only decisive to thenormal operation of a project and its return on investment, but also critical to the safety of people’s life and property. Any
quality problem can directly impair the interests and safety of people. Good performance on these indicators reflects thegreat importance the construction industry has attached to quality and safety. The financial industry showed the highest
disclosure of “after-sales service” and “customer satisfaction”. As service providers, financial companies are frequently
engaged in direct communication and interaction with customers. The experience and feedback of customers are a major
source of information for financial companies to improve their service quality. Continuous improvement in after-sales
feedback and customer satisfaction investigation enables financial companies to listen to and understand the voices ofcustomers and improve service quality accordingly. In 2017, the number of companies involved in product quality andsafety disputes was basically the same as that of the previous year. Comparatively speaking, companies publicly disclosing
these disputes accounted for a minority percentage and few such events were covered by mainstream media.
In August 2016, the State Council issued the 13th Five-year Plan on National Scientific and Technological Innovation, explicitly putting forward the general requirement, development objectives, strategic tasks and reform measures for China’s
scientific and technological innovation for the next five years. Product and service innovation, as an integral part of CSR, isclosely related to the healthy development of companies. For companies in the modern times, technological innovation is amajor source of core competitiveness for survival in increasingly fiercer market competition. By performing their responsibility of technological innovation, companies can build up their core competitiveness and become better prepared to takemore CSR practices.

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(6) Safety management system: In 2017, 66.24% of companies disclosed in their CSR report that they adopted safety

Responsibility to Employees

management system. Compared with the previous year, the proportion of disclosure in this regard was increased; Companies in the mining industry had the highest proportion of disclosure at 93.75%.

This part includes (1) compensation incentives, (2) supplementary benefits, (3) on-the-job training, (4) communication
with employees, (5) staff caring, (6) safety management system, (7) training on safe production, (8) occupational health(7) Training on safe production: In 2017, 68.57% of companies disclosed in their CSR report that they conducted

and safety certification and (9) disputes concerning staff health and safety. These 9 indicators are used to evaluate thetraining on safe production. Compared with the previous year, the proportion of disclosure in this regard was increased;

reporting entity’s awareness and performance regarding staff compensation and benefits, improvement and caring,Companies in the mining industry had the highest proportion of disclosure at 90.63%.

safety and occupational health, and disputes concerning staff health and safety, etc.
2016–2017 Staff Safety and Occupational Health

Safetymanagement
systemTraining
on safeproduction

Mining93.75%

90.63%

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

88.89%

73.33%

Transport, Storage and Post

80.00%

75.56%

Manufacturing

76.87%

79.91%(2) Supplementary benefits: In 2017, 46.73% of companies disclosed in their CSR report that they offered employees

Construction

73.08%

80.77%

supplementary benefits, like supplementary pension funds and supplementary medical insurance; 56.88% of SOEs offered

Wholesale and Retail Trades

71.74%

78.26%

Leasing and Business Services

54.55%

36.36%

Real Estate

46.94%

48.98%

Culture, Sports and Entertainment

38.10%

33.33%

Information Transmission, Software and IT Services

30.61%

42.86%(1) Compensation incentives: In 2017, 76.75% of companies disclosed in their CSR report that they established

Safety management systemcompensation incentive mechanism or launched equity incentive plan, aiming to encourage employees to take an active
part in the company’s business operation; 83.44% of private enterprises had taken incentive measures for employees,
representing the highest proportion of disclosure, while SOEs had the lowest proportion at 72.67%.

66.24%

2017

employees supplementary benefits, representing the highest proportion of disclosure, while private enterprises had the68.57%

57.20%

2016

62.50%

lowest proportion at 32.19%.
2017 Compensation Incentives

2017 Supplementary Benefits

76.75%
0.00%

46.73%

100.00%0.00%

By industry–2017

Training on safe production

0%Compensation
incentives

Supplementary
benefits

Private enterprises

83.44%

32.19%(8) Occupational health and safety certification: In 2017, 21.96% of companies disclosed in their CSR report that

Sino-foreign joint ventures

78.95%

34.21%

they passed the certification with regards to occupational health, up by 5.67% year-on-year. Companies in the manufacturingSOEs

72.67%

56.88%

industry had the highest proportion of disclosure at 32.71%.

By organization type–2017

100.00%(3) On-the-job training: In 2017, 95.56% of companies disclosed in their CSR report that they provided on-the-job

2015–2017 Occupational Safety Certification

Occupationalsafety certification

By industry–2017

training for employees, up by 1.75% year-on-year, indicating that companies continued to value the improvement of

Manufacturing

32.71%

employees’ vocational skills. Broken down by organizational type, the proportion of disclosure between different types ofConstruction

26.92%

Information Transmission, Software and IT Services

18.37%

Transport, Storage and Post

15.56%

Wholesale and Retail Trades

15.22%

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

11.11%

Real Estate

10.20%

Mining

9.38%

Leasing and Business Services

9.09%

Culture, Sports and Entertainment

4.76%

2017

21.96%

companies differed slightly. More specifically, SOEs had the highest proportion of disclosure, followed by private enterprises and foreign-funded companies.

2016

16.29%(4) Communication with employees: In 2017, 50.12% of companies disclosed in their CSR report that they createdchannels for communication between the management and employees, e.g. regular conversation mechanism and general2015

16.29%

manager mailbox; Compared with the previous year, the proportion of disclosure in this regard was increased, implying thecompanies’ constant attention on staff opinions. Broken down by organizational type, SOEs had the highest proportion of
disclosure at 53.85%, while private enterprises had the lowest proportion.

0%(9) Disputes concerning staff health and safety: We collected and summarized disputes concerning staff health and(5) Staff caring: In 2017, 92.64% of companies disclosed in their CSR report that they had staff caring schemes. For

safety by means of searching litigation and penalty information in public database and reporting of mainstream finance andinstance, they organized physical checkup for employees and also cared about employees’ mental health. Compared withbusiness media. Among the companies disclosed their CSR report, 10 had disputes with employees between 2015 andthe previous year, this indicator was on a steady increase, showcasing that the companies placed more focus on humanis-

2017 and most of them were in the industries of manufacturing and mining. For 2017 alone, three companies had disputes

tic care for employees. Broken down by organizational type, the proportion of disclosure between different types of compa-

concerning staff health and safety.

nies differed slightly. Foreign-funded companies had relatively higher proportion of disclosure.

2015–2017 Disputes with Employees

2016–2017 Staff Improvement and Caring
On-the-job training

Communication with employees
45.71%

2016201750.12%

4
Staff caring

93.81%
89.14%
95.56%
92.64%

3
By organizational type–2017

On-the-job
training

3

Communication Staff
with employees caring

SOEs

96.96%

53.85%

93.12%

Private enterprises

93.75%

44.38%

91.88%

Sino-foreign joint ventures

92.11%

52.63%

94.74%

By industry–2015–2017
Manufacturing

2015

2016

Disputes with employees
7

Mining

3

Total

10

2017

0%

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Conclusion and Analysis of “Responsibility to Employees”
Employees are an integral part of a company and a major force that supports business development. For the fulfilment of

Besides, taking on responsibilities to employees and emphasizing the happiness and improvement of employees could help

CSR, one of the priorities for the companies is to safeguard employees’ rights and benefits, because employees could

a company cultivate a good corporate image. A good corporate image is the company’s intangible huge fortune and could

directly impact sustainable development of the company, and even exert influence on the development and stability of ourhelp boost the company’s competitiveness; Meanwhile, proactively taking on responsibilities to employees is quite meaningfulsociety. During the course of taking on responsibilities to employees, companies became more people-oriented and placed

to our society as it could also help address social issues, improve life satisfaction of people from across the country, andmore focus on employees’ rights, benefits and development.

maintain social stability.

According to Opinions of the CPC Central Committee and the State Council on Building Harmonious Labor RelationshipAll in all, safeguarding the rights and benefits of employees and fulfilling the responsibilities to employees can have areleased in 2015, employers shall safeguard basic rights of employees in accordance with the laws, including the rights topositive impact on the company itself and the society. The companies and the government need to work together to drive

get paid, take rest, take leave, be protected for safety and hygiene, enjoy social insurance and accept on-the-job training.

the development of both employees and the companies in the context of a harmonious society, thereby making sure theIn this part, indicators such as “compensation incentives” “supplementary benefits” “safety management system” “training

companies’ fulfillment of CSR concerning employees.

on safe production” “occupational health and safety certification” “disputes concerning staff health and safety” and“on-the-job training” reflect how the companies value and safeguard the rights and benefits of employees. With regards tocompensation and welfare, private enterprises put more emphasis on “compensation incentives”, while SOEs, on “supplementary benefits”. This indicates that different types of companies have different overriding focuses. And the findings arein line with our common understanding of SOEs and private enterprises. As for employee safety, known for high risks at theworkplace, companies in the mining industry had the highest proportion of disclosure in terms of “safety management
system” and “training on safe production”; statistics show that in 2017, 219 mining accidents occurred in China, resulting
in 375 deaths, down by 12% and 28.7% respectively year-on-year. In 2016, however, there were additional 30 mining
accidents and 151 deaths. Though the situation is getting better, it’s undeniable that mining remains the industry where
employees’ safety risks are the highest. Speaking of occupational health, not many listed companies disclosed in their CSR
report that they passed occupational health certification. Companies in the manufacturing industry had the highest proportionof disclosure in this regard. Nevertheless, in 2017, most disputes concerning staff health and safety stemmed from theindustries of manufacturing and highly risky mining. When it comes to employees’ improvement, “on-the-job training” wasthe indicator most frequently mentioned by the companies disclosed their CSR report, demonstrating those listed companied
valued employees’ skills. Employees constitute the core competitiveness of the company, and on-the-job training could
contribute to increased competitiveness of the company, thus driving efficient business development.
It was also stressed in Opinions of the CPC Central Committee and the State Council on Building Harmonious Labor
Relationship that employers shall improve democratic management system, as well as the mechanism regarding the mediationof labor disputes, thereby creating a pleasant work environment featuring harmonious labor relationship. Moreover, employers
shall enhance communication with employees and place more focus on humanistic care for employees. In this part, theindicator “communication with employee” embodied the communication mechanism between the management andemployees. On the whole, nearly half of all the companies disclosed their communication channels, however, the proportion
was still no that large. Broken down by organizational type, SOEs had the highest proportion of disclosure, reflecting that
SOEs paid great attention to communication with employees. “Staff caring” ranked second only to “on-the-job training” interms of the proportion of disclosure. A steadily increasing number of companies fulfilled staff caring with each passing
year, indicating the greater importance that companies attached to humanistic care for employees.

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(3) All-male directors, supervisors and executives: In 2017, 46 companies didn’t have any female directors, supervi-

Diversity and Equal Opportunities

sors and executives, accounting for 5.37% of all the companies that disclosed CSR reports that year; Broken down byindustry, 24 companies in the manufacturing industry didn’t have any female directors, supervisors and executives, repre-

This part includes (1) female executives, (2) female directors, (3) all-male directors, supervisors and executives, (4)senting the highest proportion, followed by companies in the industries of finance, mining and transport; by organizational

vulnerable groups, and (5) equal opportunities. These 5 indicators are used to evaluate the reporting entity’s awareness

type, 30 SOEs didn’t have any female directors, supervisors and executives, representing the highest proportion, followed

and performance regarding diversity and equal employment opportunities.

by private enterprises and foreign-funded companies.

(1) Female executives: In 2017, 59.46% of companies had female members on their executive team, i.e. 347 companies
didn’t have any female member on their executive team; Average number of female executives per company was merely

2015–2017 All-male Directors, Supervisors and Executives

0.95, less than 1, and there were only 17 companies had over three female executives; Broken down by industry, only

43

37.5% of companies in the mining industry had female executives and average number of female executives per mining

By industry–2017

46

40

The number of companies
that have no female directors,
supervisors and executives

Manufacturing

24

company was 0.53, representing the lowest proportion of any industry; by organizational type, 56.68% of SOEs had female

Finance5executives and average number of female executives per SOE was 0.89, representing the lowest proportion of any organi-

Mining

4

Transport, Storage and Post

4

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

1

Real Estate

1Construction

1

Scientific research and technical services

1

Agriculture, forestry, animal husbandry and fishery

1

Wholesale and Retail Trades

130

Irrigation works, environment and public facility management

1
1
1

0

zational type.

2015

2016

2017

2015–2017 Female Executives
The proportion of female executives

By industry–2017

The
proportionof femaleexecutives

Average numberof femaleexecutives
per company

Mining37.50%

0.53

SOEs

Transport, Storage and Post

51.11%

0.73

Private enterprises

15

Culture, Sports and Entertainment

Construction

50.00%

0.77

Sino-foreign joint ventures

1

Information Transmission, Software and IT Services

Production and Supply of Electricity, Heat, Gas, and Water 51.11%

0.80

Finance59.42%

0.91

Manufacturing58.64%

0.91(4) Vulnerable groups: In 2017, 90 companies disclosed that they adopted the non-discrimination employment policy

Culture, Sports and Entertainment

71.43%

1.10

concerning vulnerable groups (disabled persons and those who had undergone reformation through labor) in their CSR

Average number of female executives per company
0.98

0.95

60.98%

0%59.46%

2016

0

2017

By organizational type–2017

The number of companies
that have no female directors,
supervisors and executives

The proportionof femaleexecutives

Average numberof femaleexecutives
per company

Information Transmission, Software and IT Services

71.43%

1.20

SOEs

56.68%

0.89

Real Estate75.51%

1.22

Private enterprises

62.19%

1.02

Wholesale and Retail Trades

58.70%

1.26

non-discrimination employment policy was most frequently mentioned by Sino-foreign joint ventures yet least frequently

Sino-foreign joint ventures

73.68%

1.18

Leasing and Business Services

90.91%

1.45

mentioned by private enterprises.

By organizational type–2017(2) Female directors: In 2017, 70.44% of companies had female members on the board of directors, i.e., 253 companies
didn’t have any female director, while the average proportion of female directors was merely 13.55%, and only for fivereport, accounting for 10.51% of all the companies that disclosed CSR reports that year, up by 2.18% year-on-year;

2016–2017 The Employment of Vulnerable Groups
10.90%

companies, more than half of all the directors were female; Broken down by industry, 7.10% of companies in the mining

10.51%
8.33%

industry had female directors, representing the lowest proportion. Companies in the industries of construction and transportranked second from the bottom; by organizational type, 11.58% of SOEs had female directors, representing the lowest
proportion. Foreign-funded companies ranked second with 12.99% had female directors, while 16.67% of private enter-0%

prises had female directors, representing the highest proportion.
2015–2017 Female Directors
By industry–2017

The proportion of companies that have female directors

The average
proportion of
female directors

The average proportion of female directors
68.94%

13.38%
0%2016

70.44%

13.55%
20172017 Average Proportion of Female Directors
11.58%

SOEs

16.67%

Private enterprises
Sino-foreign joint ventures
0%

12.99%

2015

2016

By organizational type–2017

Proportion

Private enterprises

8.13%

SOEs

11.74%

Sino-foreign joint ventures

15.79%

2017(5) Equal opportunities: In 2017, 182 companies stressed equal opportunities between different nationalities, religions
and countries in their CSR report, accounting for 21.26% of all the companies that disclosed CSR reports that year, up by

Mining7.10%

1.69% year-on-year; Equal opportunities were most frequently mentioned by Sino-foreign joint ventures yet least frequently

Construction

7.85%

mentioned by private enterprises.

Transport, Storage and Post

9.83%

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

12.11%

Finance13.36%

Manufacturing

13.91%

Information Transmission, Software and IT Services

14.61%

Wholesale and Retail Trades

14.85%

Leasing and Business Services

15.22%

Culture, Sports and Entertainment

15.61%

Real Estate

15.96%

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2015–2017 Equal Opportunities
21.27%

0%2015

19.57%

2016

21.26%

By organizational type–2017

Proportion

Private enterprises

15.94%

SOEs

24.09%

Sino-foreign joint ventures

31.58%

2017

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Conclusion and Analysis of “Diversity and Equal Opportunities”
With the advancement of modern society, diversity and equal opportunities have become one of the much-talked-about

Offering equal opportunities is a key indicator of a company’s values of equity and justice, as well as its fulfilment of CSR.

topics of our times. Equality is one of the cornerstones for the competition and development of any company. Hence,

According to the Report to the Eighteenth National Congress of the Communist Party of China, we should “establish in due

companies should adopt an inclusive attitude towards talent, allow them to compete equally, and take on CSR regarding

course a system for guaranteeing equality in society featuring, among other things, equal rights, equal opportunities andequal opportunities. This is commonplace in developed countries and regions, and should not be ignored in China, espe-

equal rules for all; and foster an equal social environment and ensure people’s equal right to participation in governance andcially when the country is going through a rapid development process.

to development.” Nowadays, social conflicts have become more prominent, “equal rights, equal opportunities and equal

Females play a non-negligible part in corporate governance and the fulfilment of CSR. Research shows that a company’s
fulfilment of CSR cannot be achieved without the implementation of an array of decisions made by executives anddecision-makers. And one important mechanism to facilitate a company’s fulfilment of CSR is to adopt effective corporate
governance. The diversity of executives and the board of directors, who lie at the core of corporate governance anddecision-making, has been an important topic in relevant research. Gender diversity is undeniably a topic hotspot. Somerules for all” proposed by the Eighteenth National Congress of the Communist Party of China were in line with public
opinions and thus won favor among the general public. In response to “equal rights, equal opportunities and equal rules forall”, companies may offer equal opportunities for different nationalities, religions and countries. The indicator “equal opportunities” shows that around 20% of companies emphasized equal opportunities, with foreign-funded companies accounted
for the highest proportion and private enterprises accounted for the lowest proportion. This situation needs to be improved.

research shows that compared with males, females usually have higher moral standards, so a diversified board of directors

The creation of a more inclusive and equal society calls for the support of each and every individual. At present, it iscomprising a specific number of female directors could contribute to a more balanced decision-making mechanism that

common that the listed companies in China don’t attach great importance to the fulfilment of CSR in this regard. In their

could ultimately facilitate the fulfilment of CSR.

CSR report disclosed, most of the content concerning equal opportunities is recapitulative text, lack of substantial informa-In this part, indicators including “female executives” “female directors” and “all-male directors, supervisors and executives”
measure the say females have in the management team of the listed companies that disclosed their CSR report. In 2017,tion and quantified data. The government, the public and the company itself should pay more attention to it and set higher
requirements accordingly.

relevant indicators show that the average number and proportion of female executives/directors per company remained
small (the average number is around 1), basically no difference when compared with that of the previous year. Females werestill in a disadvantage position in the listed companies that disclosed their CSR report, and they didn’t have much say overthe company’s decisions. Take female directors for example, indicators show that among the companies that disclosed
their 2017 CSR report, nearly 30% didn’t have any female director, and most of them only have one to two female memberson the board of directors. As a result, female directors could only play an insignificant role. Some scholars called this “symbolic effect”—female directors in the extreme minority usually would not actively participate in the board of directors’
discussions, because they felt their opinions were not valued, which in turn led to their growing unwillingness to share theirideas. Under the circumstances, the decision-making of the board of directors and corporate governance could be negatively affected. To put it another way, females could not give full play to their potential regarding corporate governance andthe company’s fulfillment of CSR.
Non-discrimination and caring toward vulnerable groups is also significant to a company’s fulfillment of CSR. Non-discrimination employment policy pertaining to vulnerable groups is an important way to help those people get accustomed to thissociety effectively and strive to be stronger and more independent. Providing vulnerable groups including the disabled
persons with suitable jobs can not only alleviate the pressures on the government and the society, but also set a good
example for the company’s staff to learn from. Therefore, this measure could be crucial to the cultivation of a healthiercorporate culture and work atmosphere. Not to mention, the company itself has the obligation and responsibility to adopt
a non-discrimination attitude toward vulnerable groups. According to The Law on the Protection of Disabled Persons ofPeople’s Republic of China and The Regulations on the Employment of Disabled Persons, etc., employers have the obligation and responsibility to employ a specific proportion of disabled persons. But the indicator “vulnerable groups” show that
only nearly 10% companies disclosed their employment policy pertaining to vulnerable groups including disabled persons
in their CSR report. Worse still, the implementation of their employment policy could not be quantified, so we didn’t knowwhether they met the specific proportion stipulated in the laws and regulations.

124｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜125

(3) Reduction of the three wastes: In 2017, 56.91% of companies disclosed their efforts on reducing the three wastes.

Environmental Responsibility

93.75% of companies in the mining industry disclosed their relevant actions, representing the highest proportion of disclosure and great efforts they took to reduce pollution. In general, compared with companies in the light industry, companies

This part includes the following nine indicators, reflecting the concerned companies’ performance regarding environmental responsibility: (1) environmental benefit, (2) energy saving, (3) reduction of the three wastes (waste gas, waste waterin the heavy industry attached more importance to the three wastes.

and industrial residue), (4) circular economy, (5) green office, (6) environmental protection and public welfare, (7) environ-(4) Circular economy: In 2017, 29.71% of companies disclosed their efforts regarding circular economy. 40.63% of

mental certification, (8) environmental commendation, and (9) environmental penalty.

companies in the mining industry disclosed their relevant actions, representing the highest proportion of disclosure anddemonstrating their recycling efforts. In general, compared with companies in the light industry, it is more characteristic of(1) Environmental benefit: In 2017, 46.73% of companies disclosed that they exploited or utilized environmentally bene-companies in the heavy industry to emphasize circular economy.

ficial products, services, equipment or technologies. Companies in the construction industry represented the highest
proportion of disclosure, with 76.92% claiming that they applied environmentally friendly material and equipment in the2017 Reduction of the Three Wastes

2017 Circular Economy

56.91%

29.71%

process of construction to build new green buildings. Companies in the industry of production and supply of electricity andheat, etc. ranked second, and they usually focused more on clean and renewable energy.

0.00%2017 Environmental Benefit

46.73%
0.00%

100.00%By Industry–2017
Construction

76.92%

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

68.89%
68.89%
68.12%

Finance63.27%

Real Estate
Leasing and Business Services

45.45%

Manufacturing

41.12%
37.50%

Mining32.61%

Wholesale and Retail Trades

28.57%

Culture, Sports and Entertainment

16.33%

Information Transmission, Software and IT Services

0.00%
Proportion

By Industry–2017

Proportion

Transport, Storage and Post

100.00%100.00%
Proportion

By Industry–2017

Mining93.75%

Mining40.63%

Construction

76.00%

Manufacturing

36.45%

Manufacturing

67.52%

Construction

34.62%

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

66.67%

Real Estate32.65%

Transport, Storage and Post

64.44%

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

31.11%

Wholesale and Retail Trades

50.00%

Transport, Storage and Post

29.55%

Leasing and Business Services

45.45%

Wholesale and Retail Trades

17.39%

Real Estate

28.57%

Finance11.59%

Finance26.47%

Culture, Sports and Entertainment

9.52%

Culture, Sports and Entertainment

19.05%

Leasing and Business Services

9.09%

Information Transmission, Software and IT Services

18.37%

Information Transmission, Software and IT Services

6.12%(5) Green office: In 2017, 36.37% of companies disclosed environmentally friendly measures they took in day-to-day(2) Energy saving: In 2017, 44.63% of companies disclosed their energy-saving performance. Companies in the transportindustry represented the highest proportion of disclosure, with 60% disclosed their energy-saving measures and effectiveness in the report. Companies in the industries of production and supply of electricity, heat, gas, and water, as well as

work, like water-saving and power-saving measures and paperless office. 75.36% of companies in the finance industry
disclosed their relevant actions, representing the highest proportion of disclosure. Compared with 2015 and 2016, thisindicator doesn’t make much difference.

mining, ranked second. On the whole, compared with companies in the light industry, companies in the heavy industry(6) Environmental protection and public welfare: In 2017, 17.06% of companies disclosed that they took part in activ-

attached more importance to this indicator.

ities concerning environmental protection and public welfare, like forest planting and garbage clearing. The Proportion
raised 1.40% percent, compared with 2016, showcasing companies gave greater importance to environmental protection.

2017 Energy Saving

44.63%
0.00%

100.00%By Industry–2017

36.36% of companies in the field of leasing and business services disclosed their relevant actions, representing the highest

Proportion

proportion of disclosure.

Transport, Storage and Post

60.00%

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

57.78%
56.25%

2015–2017 Green Office,Environmental Protection and Public Welfare

By industry–2017

MiningGreen
officeWholesale and Retail Trades

47.83%

Green officeFinance75.36%

26.09%

Manufacturing

45.79%

Information Transmission, Software and IT Services

69.39%

16.33%

Leasing and Business Services

45.45%

Culture, Sports and Entertainment

52.38%

28.57%

Real Estate44.90%

Wholesale and Retail Trades

50.00%

19.57%

Leasing and Business Services

45.45%

36.36%

Transport, Storage and Post

42.22%

20.00%

Construction

38.46%

26.92%

Real Estate

34.69%

26.53%

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

33.33%

20.00%

Manufacturing

25.29%

11.92%

Mining18.75%

25.00%

Finance36.37%

2017

17.06%

42.03%

Construction

38.46%

Information Transmission, Software and IT Services

22.45%

Culture, Sports and Entertainment

14.29%

38.01%

2016

15.66%
37.95%

2015

12.92%
0%126｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Environmental protection and public welfare

Environmental
protection andpublic welfare

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜127

(7) Environmental certification: In 2017, 25.12% of companies disclosed that they got environment management
system certification, e.g. ISO14001. 36.92% of companies in the manufacturing industry disclosed their achievements inConclusion and Analysis of “Environmental Responsibility”

this regard, representing the highest proportion of disclosure.

(8) Environmental commendation: In 2017, 25.15% of companies disclosed that they were cited for environmental
protection efforts and earned the honor of “green enterprise” and “demonstration enterprise in energy saving and emission
reduction”, etc. 61.54% of companies in construction industry disclosed their environmental commendation, representing
the highest proportion of disclosure.

part of ecological civilization construction. In addition, the Communist Party emphasized that companies should adhere to
the principle of “respecting nature, conforming to the iron laws of nature and protecting nature”, pursuing “modernization
without ecological civilization improvement, and above all, play a pioneering role in ecological civilization construction.

Environmental
certification

Environmental
commendation

Construction

23.08%

61.54%

economic losses caused by a destroyed ecosystem have also been on the increase with each passing year. Undeniably,

Real Estate

8.16%

36.73%

Mining21.88%

31.25%

environmental pollution has become a major issue that affects economy and people’s wellness. Reducing pollution and

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

4.44%

28.89%

Manufacturing

36.92%

28.34%

on social environment whilst the business of companies impacts all aspects of our society, particularly our ecological

Wholesale and Retail Trades

19.57%

19.57%

environment. Nowadays, as sustainable development is valued more by our society, companies are expected to shoulder

Transport, Storage and Post

6.67%

13.33%

more responsibilities with regards to environmental protection.

Leasing and Business Services

9.09%

9.09%

Information Transmission, Software and IT

22.45%

8.16%

To cope with environmental issues and take on greater environmental responsibilities, it is necessary for companies toCulture, Sports and Entertainment

28.57%

4.76%

produce environmentally beneficial products, save energy and reduce emissions, promote circular economy and green

By industry–2017

25.12%
100.00%2017 Environmental Commendation

25.15%
0.00%

ed on “ecological civilization construction” in the 19th National Congress, stressing that companies should be an integral

on the basis of harmonious coexistence of human and nature” as healthy economic development cannot be achieved

2017 Environmental Certification

0.00%“Environmental responsibility” has been a topic that draws great public attention. The Communist Party of China expound-

In recent years, the losses incurred by the ecological environment degeneration resulted from pollution have been huge, andadopting sustainable development has become an imperative for all of us. The development of companies somewhat relies

office, and participate in more activities regarding environmental protection and public welfare. In this part, compared with

100.00%the disclosure rates for “circular economy” “green office” and “environmental protection and public welfare”, that for “enviFor the eight above-mentioned indicators, SOEs ranked first by four indicators and got the second place by three indicators, foreign-funded companies ranked first by four indicators and got the second place by two indicators; while privatecompanies ranked the bottom one in terms of five indicators, indicating their relatively weak environmental awareness.
By Organizational type–2017

Environmental
benefit

Energy-saving
performance

Reductionof the threewastesCirculareconomyGreen
officeEnvironmental
protection andpublic welfare

Environmental
certificationronmental benefit” “energy-saving performance” and “reduction of the three wastes” are higher. In terms of industry, forthose with severer pollution, the disclosure rate of indicators concerning clean production, energy-saving performance andemission reduction is higher, while for the service industry, the disclosure rate of indicators concerning green office andenvironmental protection and public welfare is higher. In terms of Organizational type, SOEs demonstrated rather good

Environmental
commendation

SOEs

51.21%

49.80%

62.47%

30.02%

36.51%

17.61%

20.65%

25.56%

Private enterprises

40.00%

34.69%

48.59%

27.81%

36.25%

15.00%

31.25%

25.31%

Sino-foreign joint ventures

44.74%

60.53%

55.26%

42.11%

34.21%

28.95%

34.21%

21.05%

performance by environmental indicators, followed by foreign-funded companies. However, the performance of privatecompanies was unsatisfactory.
Environmental certification and commendation is to recognize and encourage companies to address environmental issues
and shoulder greater environmental CSR. As some companies changed the format of their 2017 CSR report, the number ofcompanies that got environmental certification was reduced dramatically compared with the previous year. In accordance(9) Environmental penalty: We collected and summarized incidents regarding environmental penalty by means ofsearching litigation and penalty information in public database and reporting of mainstream finance and business media.
Among the companies disclosed their CSR report, 10 were involved in environmental penalty between 2015 and 2017 andmost of them were in the manufacturing industry. For 2017 alone, four companies were involved in environmental penalty.
The number is larger than the previous year.

4

1
2016

relating to environmental protection, pollution prevention and control, and environmental responsibility. Third-party organizations that inspect, accredit or evaluate a company’s environmental information, such as environmental information
inspection organizations, accreditation agencies, evaluation agencies and index companies, should encourage the compakind of information.

5

2015

released by China Securities Regulatory Commission, companies are encouraged to voluntarily disclose information

ny to disclose relevant information. Nonetheless, judging from the annual CSR report, not many companies disclosed such

2015–2017 Environmental Penalty

0with article 44 of the notice. The Content and Format for Information Disclosure of Companies that Issue Securities Publicly

The number of companies

There are few cases about environmental penalty in 2017 can be found in public database. Companies in the industries of

Manufacturing

9

manufacturing and mining are more likely to be subjected to environmental penalty. Given current mainstream media expo-

Mining1

sure of the listed companies’ negative news is still not sufficient, the mainstream media should pay more attention to such

Total

10

information and report the news timely, thereby better supervising and speeding up companies’ implementation of CSR.

By industry–2017

2017

128｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜129

On average, donations of the mining industry were ahead of all other industries with RMB 26,387,000, but their median was

Social Contribution and Charity

merely RMB 1,790,600, indicating a huge gap between companies within the industry; the financial industry had the highest
median at RMB 8,448,000 and their average donations amounted to RMB 18,538,300, second only to the mining industry,

This part includes (1) donations, (2) social contribution value per share, (3) charitable activities, (4) contribution toindicating a smaller intra-industry gap.

education, (5) volunteering, (6) international aid, (7) contribution to employment, (8) contribution to economic growth,bution and corporate charitable activities.

(1) Donations: In 2017, 775 companies disclosed their donations, and the mean and median of donations are RMB
6,706,600 and RMB 658,900 respectively, much higher than the corresponding RMB 5,730,000 and RMB 415,000 in 2016.
2016–2017 Companies Making Charitable Donations

2016–2017 Amount of Charitable Donations
Mean of donations (RMB 10,000)

Number of companies disclosing donations
760

Median of donations (RMB 10,000)

775
670.66573.14

65.89

41.50
0

0

2017

2016

2017

2016

Mean of donations

Median of donations

Mining2,638.70

179.06

Finance

1,853.83

844.80

Health and social work

1,774.71

191.11

Production and supply of electricity, heat, gas and water

1,610.31

77.67

Real estate

1,234.05

170.67

By industry–2017

and (9) layoffs. These 9 indicators are used to evaluate the reporting entity’s awareness and performance of social contri-

Culture, sports and entertainment

999.1127.75

Construction

804.07126.00Agriculture, forestry, animal husbandry and fishery

797.6550.45

Wholesale and retail trades

439.21

90.32

Leasing and business services

359.7889.64

Water conservancy, environment and public facilities management

338.04169.33

Manufacturing264.94

51.03

Information transmission, software and IT services

168.9614.00

Transport, storage and post

115.22

35.00

Comprehensive

108.5991.75

Scientific research and technical services

57.52

36.11

(2) Social contribution value per share (SCVPS)

In terms of the distribution of donation amount: 1) 94 or 12.13% of the companies made no donations; 2) more than half ofthe companies donated less than RMB 500,000 each; and 3) 105 companies donated more than RMB 10 million each, 19of them donated RMB 50 million each and the highest donations annually reached RMB 516.2 million.

2015–2017 Number of Companies Disclosing SCVPS

1) Number of companies disclosing SCVPS: Social contribution value per share, brought up by the Shanghai Stock
6

123

124

130

2015

2016

2017

Exchange, measures companies’ overall contribution tosociety with economic benefits. In 2017, the number ofcompanies disclosing their SCVPS reached 130, roughly the2017 Distribution of Donation Amountsame as that in 2015 and 2016, accounting for 15.19% of the172

0

total CSR reporting companies.

156

Of these companies, 124 were listed on the SSE, accounting for 95.38% of the total; only 6 or 4.62% were from the SZSE,
including 4 from the Main Board and 2 from the SME Board. The manufacturing industry topped all industries with 58

100

94

85

companies disclosing their SCVPS; the financial industry was the top in terms of the proportion of companies making the

63

54

disclosure (28.99%).
32

0

B

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RM

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1
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2017 Number of Companies Disclosing SCVPSmSZSE SME Board
2 (1.54%)>R

Markets
Second Board
SSE A Share

By industry–2017

Proportion of Number ofcompanies
companies

Finance28.99%

20

Mining28.13%

9

Leasing and business services

27.27%

3

Transport, storage and post

20.00%

9

Real estate

18.37%

9

Wholesale and retail trades

17.39%

8

On average, donations of SOEs topped all types of organizations with RMB 8,040,300, but their median was lower at RMBSZSE SME Board

Culture, sports and entertainment

14.29%

3574,000 only. Donations from West China topped all regions with RMB 9,251,900 on average and RMB 891,300 by median.

SZSE Main Board

Manufacturing

13.55%

58

Water conservancy, environment and public facilities management

12.50%

1

Construction

11.54%

3

Production and supply of electricity, heat, gas and water

8.89%

4

Information transmission, software and IT services

6.12%

3

Mean ofdonationsMedian of
donationsSOEs

804.03

57.40

Sino-foreign Joint Ventures

667.39

Private enterprises

480.99Other enterprises

65.42

By organization type–2017

Mean ofdonationsMedian of
donationsWest925.1989.13

197.78East

682.01

69.40

72.22

Northeast

512.15

19.14

35.34

Central419.7350.66

By region–2017

130｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

SSE A Share
124 (95.38%)

6

Calculation of SCVPS: SCVPS = (economic contribution + social contribution – other social costs such as environmental 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.

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜131

By industry, the financial industry showed the strongest performance by topping all the three indicators at 78.26%, 91.30%

2) Mean of SCVPS
The mean of SCVPS disclosed in 2017 stood at RMB 2.46, which was RMB 0.16 higher than the previous year. By industry,
the financial industry showed the highest mean at RMB 4.23, significantly outperforming other industries; the manufacturingindustry had the highest number of companies disclosing the value, and the mean of their SCVPS was merely RMB 2.08.

0

2.46

2.30

2015

2016

enterprises showed the largest proportion of participation in charitable activities and contribution to education, SOEs weremost active in volunteering while private enterprises showed poorer performance; by region, companies in East China
played the most active part in charitable activities and volunteering, and companies in West China made the largest contribution
to education.

2015–2017 Mean of SCVPS

2.29

and 78.26% respectively, reflecting financial companies’ emphasis on public welfare; by organization type, foreign-funded

By industry–2017

Mean

Finance

4.23

Mining3.20

Construction

2.92

Information transmission, software and IT services

2.70

Wholesale and retail trades
Manufacturing

Charitable
activities

Contribution
to education

volunteering

Finance78.26%

91.30%

78.26%

Leasing and business services

54.55%

63.64%

36.36%

2.64

Construction

46.15%

84.62%

65.38%

2.08

Real estate

42.86%

57.14%

55.10%

Leasing and business services

1.96

Wholesale and retail trades

36.96%

58.70%

65.22%

Culture, sports and entertainment

1.96

Culture, sports and entertainment

33.33%

76.19%

33.33%

Real estate

1.93

Information transmission, software and IT services

26.53%

55.10%

28.57%

Production and supply of electricity, heat, gas and water

1.51

Manufacturing

25.70%

56.54%

42.06%

Water conservancy, environment and public facilities management

1.27

Mining25.00%

78.13%

65.50%

1.26

Transport, storage and post

22.22%

46.67%

55.56%

Production and supply of electricity, heat, gas and water

15.56%

60.00%

57.78%

Charitable
activities

Contribution
to education

Volunteering

Transport, storage and post2017

By industry–2017

SOEs had the highest mean of SCVPS at RMB 2.59, and the foreign-funded enterprises the lowest at RMB 2.10. Companies
in East China had the highest mean of SCVPS at RMB 2.81, and those in Northeast China the lowest at RMB 1.39.
By organization type–2017

Mean of SCVPS

By region–2017

Mean of SCVPS

Sino-foreign joint ventures

2.59

East

2.81

Private enterprises

2.10

Central

1.83

SOEs

2.01

West

1.54

Northeast

1.39

By region–2017
By organization type–2017

Charitable
activities

Contribution Volunteering
to education

East

35.69%

60.44%

52.86%

Sino-foreign joint ventures

44.74%

65.79%

47.37%

Central28.32%

61.95%

38.94%

Private enterprises

36.56%

60.00%

37.50%

West

26.85%

68.52%

44.44%

SOEs

29.35%

60.93%

57.29%

Northeast

17.07%

43.90%

43.90%(6) International aid: In 2017, 58 companies offered international aid, accounting for 6.78% of the total, up about 1% fromthe previous year; the construction industry showed the most active participation in international aid as 42.31% of construction(3) Charitable activities: In 2017, 32.71% of the companies launched either independent charitable programs such as
dedicated charitable foundations, or charitable activities in collaboration with other organizations, representing an increase

companies disclosed their international aid behavior; 13.16% of foreign-funded enterprises participated in international aid,
accounting for the highest proportion and private enterprises the lowest at 3.13%.

of 6.83% from the previous year.

2015–2017 International Aid(4) Contribution to education: In 2017, 60.86% of the companies made contributions to education, including funding theestablishment of schools, Hope Project and the schooling of poverty-stricken students, representing an increase of 4.93%

4.85%

5.81%

By industry–2017

from the previous year.

(5) Volunteering: In 2017, 49.53% of the companies organized volunteer activities such as visiting elderly care centers and0%orphanages, and this proportion was basically the same as that of the previous year.

2015

By organizational type–2017

2015–2017 Performance of Social Contribution
Charitable activities

Contribution to education

Volunteering
60.86%

55.93%

2017
Proportion

Construction

42.31%

Mining28.13%

Leasing and business services

18.18%

Wholesale and retail trades

8.70%

Finance

7.25%

Transport, storage and post

6.67%

Manufacturing

4.67%

Production and supply of electricity, heat, gas and water

2.22%

Sino-foreign joint ventures

13.16%

Real estate

2.04%

SOEs

8.70%

Information transmission, software and IT services

2.04%

Private enterprises

3.13%

Culture, sports and entertainment

0.00%

49.53%

49.24%

48.99%

2016

Proportion

6.78%

43.07%
32.71%
25.88%
20.19%

0%

2015

2016

132｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

2017

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜133

(7) Contribution to employment: In 2017, 40.54% of the companies disclosed their contribution to employment by
creating more jobs. 50.00% of the foreign-funded enterprises disclosed their contribution to employment, accounting forConclusion and Analysis of “Social Contribution and Charity”

the highest proportion and private enterprises the lowest at 38.75%; 45.37% of the companies in West China disclosed theircontribution to employment, accounting for the highest proportion and companies in Central China the lowest at 38.94%.

(8) Contribution to economic growth: In 2017, 25.23% of the companies disclosed that their business operations
facilitated local economic development or their corporate policies (e.g. localized procurement policy) stimulated local economy.
By organization type, SOEs had the highest proportion of disclosure at 28.74%; by region, companies in West China had
the highest proportion of disclosure at 34.26% and companies in Northeast the lowest at 17.07%.
2017 Contribution to Employment

Chinese government has been promoting charitable activities among businesses in recent years. In the Charity Law ofChina promulgated in 2016, the Article 5 says that “the government encourages and supports natural persons, legal
persons and other organizations in legally carrying out charitable activities that represent the core values of socialism andpromote the traditional morals of the Chinese nation.” And the Article 76 specifies that “natural persons, legal persons orother organizations that donate property for charitable activities are eligible for tax benefits.” The Opinions of the StateCouncil of the CPC Central Committee on Building a Healthy Growth Environment for Entrepreneurship and Encouraging
Entrepreneurs to Play a Better Role (“The Opinions”) was officially launched in September 2017, and it was the first time for2017 Contribution to Economic Growth

the CPC Central Committee to make clear the status and value of entrepreneurship by issuing such an official document.
According to The Opinions, it is important to encourage entrepreneurs to take the initiative to fulfill their social responsibilities,
to grow a stronger sense of mission and honor regarding CSR, and to play an active part in charitable donations. These laws

40.54%
0.00%

and regulations play a positive role in promoting the CSR practices of companies.

25.23%
100.00%Companies are the most important participants and leaders of charitable activities nowadays. They can take advantage of

0.00%

100.00%their human, material and financial resources to make charitable activities more successful and influential. Charitable activities
thus organized can play an inestimably significant role in relieving disadvantaged groups and alleviating the economic

Contribution
to Employment

Contribution toeconomic growthSOEs

40.89%

28.74%

Private enterprises

38.75%

Sino-foreign joint ventures

50.00%

By organization type–2017

Contribution
to Employment

Contribution toeconomic growthWest45.37%

34.26%

20.94%

East

39.73%

24.58%

18.42%

Central38.94%

23.01%

Northeast

43.90%

17.07%

By region–2017

burden of the country. While running or participating in charitable activities, companies can not only promote the conceptof charity, but build up their image as responsible corporate citizens and further improve their brand value and reputation.
As beneficiaries of social development, companies have the responsibility to give back to society.
Looking into the donation amount of listed companies with CSR reports disclosed, we can find that there are still some“penny pinchers” making no donations at all in 2017. Despite a high mean of donations, more than half of the companies(9) Layoffs: We have collected company news on layoffs from mainstream financial media. Of the companies with CSR

donated less than RMB 500,000 each. SOEs performed best in terms of donations, reflecting their substantial contribution

reports disclosed, 59 were involved in layoff-related news releases between 2015 and 2017. Among them, 12 companies

and leadership in promoting charity. The SCVPS, which was initially put forward by the SSE in 2008, is not subject to

had related media coverage in 2017, a slight decrease from 2016, and most were from the manufacturing industry.

mandatory disclosure and its calculation standards are vague. As a result, only a few companies, more specifically, mainlycompanies listed on SSE, disclosed their SCVPS. To this end, more detailed description and mandatory requirements
should be put in place to ensure the comparability of data. In 2017, the performance of listed companies in various charity

2015–2017 Number of Companies Laying off Employees

and social contribution indicators is ranked from highest to lowest ratio as follows: “contribution to education” “volunteering”

26
21

By region–2017
12

0

2015

2016

Number of companies
laying off employees

West

7

East

2

Central2

Northeast

1

2017“contribution to employment” “charitable activities” “contribution to economic growth” and “international aid”. Financial
companies showed the strongest performance and played an exemplary role in fulfilling social responsibilities. In the meantime,
according to some negative news from open sources, a few listed companies laid off employees in 2017. But the numberof companies doing so was smaller than that in the previous year.
Charity work makes up an important part of CSR. Charity stands for a long-term undertaking which is an integrated embodimentof benevolence and attitude towards wealth. Charitable contributions can bring about “multiple benefits” to companies,
though they may be marked as expenditures in the short run. In the longer run, by making charitable contributions, companies
can increase their overall competitiveness, gain social recognition, and highlight their corporate culture and values, all ofwhich will in turn build up their “soft strengths” and foster a more favorable social environment for their steady and sustainable
development.
To sum up, although some listed companies have played an exemplary and leading role in fulfilling social responsibilities,
there is still a long way to go before all Chinese listed companies can be highly dedicated to charity and public welfare.
Listed companies must integrate CSR into their corporate culture and values, always bear CSR in mind in their daily operating
and production activities, regard charity work as an inseparable part of their social responsibilities.

134｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜135

(2) Indicator Score by Category

YEAR-ON-YEAR COMPARISON

In 2017, the category Responsibility to Employees had the highest score of 64.78%, while Environmental Responsibility,

OF INDICATORS IN CSR REPORTS

Social Contribution and Charity, and Social Responsibility Management had much lower scores at around 35%, reflecting
the differences in the degree of fulfillment of different groups of CSR indicators. Environmental Responsibility even showednegative change, whose score was 3.71% lower than in 2016. The detailed analysis is as follows:(1) Overall Indicator Score
Indicator Category

In 2017, the average overall CSR indicator score was 43.71 (out of 100), which was 2.19 higher than 2016 and up by 5.27%.

2016 Score

2017 Score

Difference

Environmental responsibility

35.12%

38.83%-3.71%

Social responsibility management

35.96%

35.08%

0.88%

Diversity and equal opportunities

39.08%

38.19%

0.88%

Compared with 2016, the transport industry had a 12.92% increase in the overall indicator score, the highest of all industries

Product quality and innovation

49.12%

46.12%

3.01%

while IT services and manufacturing companies saw an increase of less than 5%, lower than the average. By organization

Company operations and management

42.00%

38.16%

3.83%

type, foreign-funded enterprises scored the highest at 47 and private enterprises scored the lowest. By region, companies

Social contribution and charity

35.71%

31.80%

3.91%

in East China had the highest average score at 45 and those in the Northeast had the lowest. When broken down by organization

Responsibility to employees

64.78%

56.98%

7.80%

The score is not very high, which means the overall level of CSR disclosure needs to improved. By industry, construction
companies scored the highest at 53.99 while culture, sports and entertainment companies scored the lowest at 31.83.

type and region, all of these companies had a modest increase in the overall score compared with 2016, with small differencesin the degree of increase.

Environmental Responsibility Score

2016–2017 Overall Indicator Score

41.52

0

2016

43.71

2017

By industry–2017

By organization type, foreign-funded enterprises scored the highest at 40.13% while private enterprises scored the lowest

2017

2016

East

45

43

West

43

41

at 29.31%. SOEs and companies in Central China saw a steeper decline in their score than their respective counterparts.

Central41

40

By industry, construction companies scored the highest at 46.63%. The scores of the mining and manufacturing industries

Northeast

38

34

dropped more sharply than other industries, down by 5.72% and 4.74% from 2016.

By organization type

2017

2016

Sino-foreign enterprises

44

47

SOEs

43

45

Private enterprises

39

41

By region

2016

2017

Percentagechangeat 32.27%. By region, companies in the East scored the highest at 36.95% while those in Central China scored the lowest

Due to the changes in the form of report disclosure, some environment-related indicators were no longer a must in the 2017
CSR report. Given the lack of disclosure requirements for such indicators, most companies disclosed their performance on
environment responsibility in a perfunctory manner, without providing relevant statistics or examples. As a result, the score
for this category of indicators was slightly lower than that of the previous year.
By organization type

2017

2016

By region

2017

2016

Information Transmission, Software and IT Services

35.25%

36.65%

3.98%

Sino-foreign enterprises

40.13%

41.54%

East

36.95%

39.84%

Manufacturing

42.69%

44.43%

4.08%

SOEs

36.41%

40.68%

West

32.64%

38.00%

Mining44.95%

47.02%

4.60%

Private enterprises

32.27%

35.45%

Northeast

31.10%

33.45%

Finance43.87%

46.01%

4.88%

Central29.31%

36.36%

Wholesale and retail trades

42.16%

44.32%

5.12%

Production and supply of electricity, heat, gas and water

41.17%

43.37%

5.33%

Real estate

38.08%

41.59%

9.23%

Mining40.23%

45.96%-5.72%

Construction

49.19%

53.99%

9.75%

Manufacturing

36.57%

41.31%-4.74%

Culture, sports and entertainment

28.86%

31.83%

10.27%

Finance

32.43%

36.48%-4.05%

Transport, storage and post

39.31%

44.39%

12.92%

Production and supply of electricity, heat, gas and water

38.89%

42.86%-3.97%

Wholesale and retail trades

32.07%

35.58%-3.51%

Construction

46.63%

49.04%-2.40%

Information Transmission, Software and IT Services

22.45%

23.89%-1.44%

Transport, storage and post

38.06%

39.29%-1.23%

Real estate

34.44%

35.37%-0.93%

Culture, sports and entertainment

23.21%

20.14%

3.08%

136｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

2017 Score

By industry

Difference

2016 Score

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜137

(3) Top 50 with the Highest Overall Indicator Scores

ANALYSIS OF ECONOMIC VALUE

Among the Top 50 companies with the highest overall scores in 2017 (see the Appendix), 24 were from the manufacturingindustry, four fewer than the previous year, and 7 from the finance industry, one fewer than the previous year. There were

OF CSR REPORTS

36 SOEs, 9 private enterprises, and 5 foreign-funded enterprises; the company distribution by organization type showedsmall differences from the previous year. 45 companies were from East China, accounting for 90% of the Top 50.
By industry

2017

2016

Manufacturing

24

28

Finance

7

MiningTransport, storage and post

The economic value of CSR reports is a major concern for investors in the capital market. This research looks into this issue
by constructing an investment portfolio according to the report information and checking its profitability. To be specific, the

2017

2016

SOEs

36

33

8

Private enterprises

9

11

ones with the lowest scores, and then examine the excess returns from this portfolio. The excess return is defined as the44

Sino-foreign joint ventures

5

6

stock’s return in excess of the corresponding market index. For instance, the excess return of the A-share in the Shanghai

42Real estate32Construction

3

1

2017

2016

Production and supply of electricity, heat, gas and water

2

2

East

45

41

Wholesale and retail trades

2

1

West

4

7

Information Transmission, Software and IT Services

1

1

Northeast

10Agriculture, forestry, animal husbandry and fishery

01

Central02

By organization typeresearchers classify the companies based on CSR information, buy the companies with the highest CSR scores and sell the

Stock Exchange is its monthly return minus the Shanghai Composite Index. The accumulative excess return analyzed in thisBy region

report is the total excess return during the three months since May 2018.

Excess Returns from the Arbitrage Portfolio based on Different Indicators between May–July 201813.84%Overall CSR Index

On the whole, the average score of Top 50 companies in 2017 was 75.43 (out of 100), which was 3.74 higher than in 2016,
growing by 5.22%. Top 50 companies had a much higher average score than that of all companies (43.7l), but they shared

11.95%(1) Social responsibility management

similar growth rates.
21.27%(2) Product quality and innovation

Among the Top 50 companies in 2016, 13 moved up in the ranking while 36 slipped down, 10 of which dropped out of theTop 50 in 2017. Of the companies that dropped in the ranking, 20 came from the manufacturing industry, 6 from the financial

14.74%(3) Environmental responsibility

industry and 3 the mining industry, which should be largely attributed to the declining scores of these three industries in thescores, the increase in their overall scores was lower than the average level, thus contributing to their fall in the ranking.
2016–2017 Overall Indicator Score on Average (Top 50)

71.69

75.43

8.43%

(4) Social contribution and charity

category of Environmental Responsibility. Since these three industries had the biggest drop in Environmental Responsibility0%Drop in the 2017 Overall Ranking (Top 50)
Others7

Real estate3
Construction
8

First of all, the research examines 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 buy thegroup with the highest scores and sell the group with the lowest scores. Given that listed companies had to release their2017 financial reports before May 2018, the researchers calculate the accumulative excess return in the three months
between May and July 2018, which turns out to be 3.46%, i.e. an annualized rate of 13.84% (assuming the cash dividends
are reinvested). The research also finds the result remains unchanged when the samples are divided into two, five or tengroups.

0

Specifically speaking, the overall CSR score is composed of seven groups of indicators, including social responsibility
2016

2017

Transport
20

Among the ten new companies that made it into Top 50, two were the companies that disclosed CSR reports for the firsttime in 2017. The companies that joined the Top 50 were mainly from the transport, construction and real estate industries.

management, company operations and management, product quality and innovation, responsibility to employees, diversity
and equal opportunities, environmental responsibility, and social contribution and charity. The research finds that thearbitrage portfolio can invariably earn positive accumulative returns whichever the indicator is adopted. The detailed analysis
is as follows.

The growth rates of these three industries’ scores were higher than the average level, which pushed them up the ranking.

138｜CEIBS CSR Report 2018 · Research on CSR Reports of A-Share Listed Companies

Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜139

(1) Classification by Social Responsibility Management

APPENDIX: Top 50 Companies Based on2017 CSR Reports

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 good quality of the CSR report. After classifying the companies by this score, the research finds Social Responsibility
Management has an obvious positive correlation with the accumulative excess return, which is 2.99% in three months, i.e.
an annualized rate of 11.95%.

(2) Classification by Product Quality and Innovation
This part includes quality management, customer satisfaction, patents and R&D expenditure, etc. They have a significant
bearing on the company’s economic value because of their critical role in helping the company retain customers andacquire competitive advantages. After classifying the companies by the Product Quality and Innovation score, the researchfinds the portfolio earns an accumulative excess return of 5.32% in three months, i.e. an annualized rate of 21.27%.

(3) Classification by Environmental Responsibility
This part shows the company’s fulfillment of environmental protection responsibility in areas such as environmental benefit,
energy saving and reduction of the three wastes, which is key to sustainable business development. After classifying theNo.

Stock Code

AbbreviatedCompany NameNo.

Stock Code

AbbreviatedCompany Name

1

600104

SAIC Motor

26

600028SINOPEC2601899ZIJIN MINING

27

600267HISUN

3600050China Unicom

28

601328BCM

4002202GOLDWIND

29000001PING AN BANK

5600619HIGHLY30

600098GDG

6600019BAOSTEEL

31

600684PEARL RIVER
ENTERPRISES

7002024suning.com

32

600221

HAINAN AIRLINES

8

601668China State Construction

33

000963ECPC

9000999

CR SANJIU

34000729YANJING BEER

10600196FOSUNPHARMA

35

601318PING AN11

600018SIPG

36000338Weichai Power

12000100TCL

37000050TIANMAMICROELECTRONICS A

13

601088China Shenhua

38

600887Yili

14000725BOE A

39001979CHINA MERCHANTSSHEKOU

15000002

Vanke A

40

002422KELUN

16002594BYD

41601398ICBC

17600332BYS

42601390CHINA RAILWAY

18601231

USI

43601238GAC GROUP

19

601288ABC

44601800China Communications
Construction

20

600062

CR DOUBLE-CRANE

45

600036China Merchants Bank

21

000039CIMC

46601111

AIR CHINA

22000878CHINALCO

47

000726

LUTHAI TEXTILE A

23

000858WULIANGYE

48002734

LIMIN CHEMICAL

24

601857

PetroChina

49

600323

Grandblue Environment

25

601939CCB

50600115China Eastern Airlines

companies by the Environmental Responsibility score, the research finds the portfolio earns an accumulative excess returnof 3.69% in three months, i.e. an annualized rate of 14.74%.

(4) Classification by Social Contribution and Charity
This part includes donations, charitable activities, and contribution to education, etc. After classifying the companies by theSocial Responsibility and Charity score, the research finds the portfolio earns an accumulative excess return of 2.11% inthree months, i.e. an annualized rate of 8.43%.

Apart from the above indicators, other indicators such as the social contribution value per share, the total amount of donations,and the number of patents also have a big impact on corporate value. The amount of donation signifies the direct outflow
of the company’s economic interest. When adopting this indicator, the portfolio earns an accumulative excess return of 4.26
% in three months, i.e. an annualized rate of 17.05%. The number of patents and R&D expenditure show the company’s
innovation capacity. When adopting these two indicators, the accumulative excess returns are 2.96% and 2.15% respectively
in three months, i.e. 11.85% and 8.61% annualized rates. Moreover, factors such as company operations and management, responsibility to employees, diversity and equal opportunities are all positively correlated with future excess returns.

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Research on CSR Reports of A-Share Listed Companies · CEIBS CSR Report 2018｜141

Afterword
Since day one, CEIBS has been fully aware that its mission and social responsibilities go
beyond imparting commercial knowledge. CEIBS has never locked itself away in an ivory
tower, but instead has always been an active participant in China’s social progress.
After six months of preparation, the CEIBS Corporate Social Responsibility Report 2018 is
now out. This report provides a roundup of the latest developments with CSR in China andinternationally in 2018 as well as its successes and best practices. It is a product of hard
work, dedication, creativity and a pursuit of excellence on the part of CEIBS staff and faculty.
Our sincere thanks go to the school’s management and the Alumni Association for theirconsistent and staunch support and to the Translation Department, Case Center and otherdepartments for their substantive assistance. Special thanks go to our alumni-owned
businesses—Poten Enviro, CHERVON, Jianye Group, First Respond®, Essilor and CEDAR
Charity—for their active implementation and practices of CSR as well as contributions to thisreport.
Going forward, we’ll keep current with the times and help address the nation’s most pressing
needs. As part of the commitment to our social responsibilities, we will work to facilitatecommercial progress in China and the world at large by promoting the CSR notion and examining the best practices and lessons learned.

Editorial Board of CEIBS CSR Report
June 30, 2019