Archive Page 2

My Fortune China blog: “Sustainable Development is the Main Principle” — ie, Blogging the “hard truth”

When I moved to Qingdao in 2002 after finishing undergrad, I lived in one of China’s earliest and largest national-level economic and technological development zones. Pervading The Zone were massive billboards displaying 10-meter high bust shots of the octogenarian Deng Xiaoping. Deng Xiaoping is widely recognized as laying the thoughts that have steered China to economic success over the last 30 years of “reform and opening up”. His steady, posthumous gaze seemed to be guiding the construction of infrastructure in The Zone. His vision shone upon the future bridge connecting The Zone to old Qingdao, and upon the various refineries and factories. His plan penetrated the department stores full of mannequins, sales staff and no customers. This was an eerie, eye-opening time, and The Zone had major impacts in how I have subsequently come to view the world.

My strongest impression of Life in The Zone was one of Deng’s key quotes emblazoned everywhere on those giant billboards or in neon signs at the major entrances to the zone: . (Chinese isn’t working for me in WordPress….most of the signs had “fazhan cai shi ying daoli” instead of the pictured “fazhan shi ying daoli“)

The English translation: “Development is the main principle.” Since I could could not read or speak a lick of Chinese when I crash landed there in Shandong Province, only after many more years of studying Chinese would I realize the more literal and telling translation of most of these signs (but not the sign pictured, if you want to get technical): “Development is the only hard truth.”

Development is the Main Principle at the entrance to the Qingdao Development Zone, 2002
This hard truth had a profound affect on my psyche and my priorities. One of the most mind-boggling aspects to my young American mind undergoing its first China experiences then was just how much I had taken for granted that different levels of development have profound effects on peoples’ lives. Life in The Development Zone left the indelible impression that my rather self-involved American priorities were in need of a tune-up. Soon I was no longer the cynical postmodernist my education and culture had taught me was fine to strive for. I decided to devote hours and hours every day to studying Chinese and learning the mechanisms to explain China’s economic miracle.

I also fretted that all this economic growth would lead to unprecedented environmental destruction and decided to learn enough about the situation to (hopefully) make a difference.

I figure that a new paradigm combining the pragmatism and razor insight of Premier Deng with the advances in science, business strategy, and human ingenuity that development brings is one of the best strategies for steering our planet toward ecological, social, and economic sustainability.

When Fortune China‘s editor-in-chief asked me to blog for his magazine after he saw me speak at a American Chamber of Commerce in Hong Kong event organized by my friend Ed Ahnert on “corporate responsibility policy in China: opportunities for competitive advantage,” I decided to take him up on the offer.

Blogging for Fortune China, Celebrating 30 years of “Reform and Opening Up”

Corresponding with the thirtieth anniversary of Deng’s “reform and opening up” policy celebrated this month, I decided to call my bilingual Fortune China blogSustainable Development is the Main Principle” .

To my mind, Deng’s greatest insight was the importance of taking practical measures to deepen the world’s level of economic and social interdependence. Corporations, inter-government organizations, and international nonprofit organizations are the main globalizers of our age. “Sustainable Development is the Main Principle”  focuses on how these organizations are contributing to sustainable development, with a special focus on how multinational corporations can gain and maintain competitiveness in this fast-changing environment.

Sustainable Development is the Main Principle–first blog posts

  1. Stakeholder engagement in Chinese history and what it means for business today: the story of Yang Jisheng and the earliest example of “stakeholder engagement” I’ve been able to find in Chinese history;
  2. The power and point of TED: branding, strategy and good ideas: all about how TED presentations can help with work, presentation skills, and changing the world. This post especially profiles the presentation by the World Wildlife Fund’s Jason Clay on his work with global corporations and improving the sourcing of global commodities to reduce negative environmental impacts.

More soon to come! I hope you enjoy reading “Sustainable Development is the Main Principle“!


Advancing the Sustainability Practices of China’s Transnational Corporations

The International Institute for Sustainable Development (IISD) has published the final version of a paper I co-wrote with Simon Zadek and Long Guoqiang as part of a multi-year “sustainable trade strategy for China” with multiple stakeholders from China and abroad, supported by the Swiss SECO.

As IISD writes on its website,

“This paper examines how the Chinese business community can best use international sustainability standards to enhance its competitiveness in global markets, in so doing more effectively placing themselves on a sustainable economic path. We highlight the opportunity for Chinese businesses, supported by enabling public policies, to become a force in shaping the next generation of sustainability standards in global markets as a competitive strategy consistent with China’s broader interests. Doing this requires Chinese actors to engage more deeply in existing standards initiatives and take a more explicit role among the communities that have developed and now govern these standards. Effective engagement in such standards is a means of offsetting competitive disadvantages or creating competitive advantages when businesses and nations choose a more sustainable development path. This paper sets out both strategic options for businesses and policy options for the Chinese government to realize sustainable development and competitiveness goals.” IISD Publications Centre

This is the final version of a paper launched a year earlier by AccountAbility, which I posted about here.

Download the final paper here.


China and the future of voluntary standards systems and my ISEAL Alliance presentation

iseal alliance logoI spoke in June at the ISEAL Alliance annual conference, “Through the Looking Glass: The Future of Social and Environmental Standards,” in London on prospects for voluntary standards development in China and from a base in China. Here’s a bit of background and a summary of my presentation, now posted to the ISEAL Alliance website.

The ISEAL (International Social and Environmental Accreditation and Labeling) Alliance is a membership organization for international voluntary standards systems (VSS). ISEAL sets standards for standards groups and has been working on impacts codes. ISEAL members include the Forest Stewardship Council, the Marine Stewardship Council, Fairtrade Labeling Organization, UTZ Certified, Rainforest Alliance/Sustainable Agriculture Network, and many other standards groups that have been at the forefront of what Michael Conroy calls the ‘certification revolution.”

full iseal alliance member logosInternational voluntary standards systems (and ISEAL Alliance members in particular) are reshaping international markets through numerous ways. They help companies “compete up” on social and environmental impacts by offering credible market signals for what economic theory used to call externalities. These standards help governments enforce environmental regulations like the Lacey Act that prohibits importation of unsustainable wood in the US. They can hep companies and governments procure goods and services sustainably.

The conference was very interesting in that for the first time in my experience, multiple stakeholders from business, government, and the standards community were in the same room. Wal-Mart’s representative in charge of sustainable procurement had only heard the week before that standards organizations have such an important role. Standards groups had presentations on life-cycle analysis from leading actors like Greg Norris.

My presentation in London focused on China and voluntary standards. I got into this area through research on a “Sustainable Trade Strategy” for China with AccountAbility, the International Institute for Sustainable Development, the Chinese State Council’s think tank the Development Research Center. That researched focused largely on the role of voluntary standards in shaping the future competitiveness of China’s transnational corporations. The paper touched only lightly on the role China would have on voluntary standards systems. (Read more about that here). My presentation in London filled some of the gaps.

Here’s a link to my powerpoint on “International Voluntary Standards in China: Present Conditions and Future Possibilities”.

Here’s a quick summary of my presentation:

(I apologize that I write bare-bones powerpoints and I don’t have a transcript of my presentation).

1) Context: International voluntary standards developed largely at the “end of history” under US-dominated international market conditions and now face BRIC challengers.

2) China is doing a lot to develop its own standards and has the power to influence markets to benefit Chinese corporations and Chinese standards bodies (indeed, any other strategy would be illogical)

3) Prospects for the uptake of standards in China, ie, what Chinese consumers want, and which standards have already been taken up, etc.

4) Thoughts on MNC success in China and similar industry development, ie, the history of business registration in China, development of international accounting standards in China, and the recent rapid development of China’s Corporate Social Responsibility policy environment and company actions.

5) A common strategy for international VSSs: local interface/global consistency,

6) Priorities on achieving a move toward converging local and international standards in China so as to avoid setting back the development of standards in China.

After my presentation, I had two major takeaways:

1) International standards bodies know that China is a game-changer and they take it as a given that they must adapt quickly and in a coordinated way.

2) International stakeholders recognize that China is one of the few developing countries that can actually achieve relatively high success in getting international organizations and corporations to respect local norms, customs, and business environment. Or, in one participant’s words, (I paraphrase), “lots of developing countries ask companies to respect local development priorities, but only China can actually make this happen.” We were discussing this in the context of Google’s recent actions in the China market.

There’s a lot more work to be done in this area and the landscape is shifting fast.


The World Guide to CSR

Worldguide to CSRI co-wrote the China chapter of this new compendium of corporate social responsibility.

The World Guide to CSR:
A Country-by-Country Analysis of Corporate Sustainability and Responsibility

Edited by Wayne Visser and Nick Tolhurst


How Chinese government officials are innovating provincial/regional responsible competitiveness

Golden Bee 2010 Responsible Competitiveness panel

Fifth annual Golden Bee Conference: Regional Responsible Competitiveness Panel, image courtesy of WTO Tribune

Here is a summary of my remarks at the fifth annual Golden Bee conference in Beijing, speaking on a panel about how governments, companies, and civil society are working together to shift markets to reward responsible business action and make development more sustainable.

The session was chaired by the head of the Sino-German CSR Project, Rolf Dietmer, and had representatives from four provincial and district CSR initiatives, including Shandong, Shanghai Pudong, Jiangsu and Sichuan, plus a representative form China Unicom. My work with Chinese provincial economics planners has centered on the textiles and medicines sectors in Zhejiang through Responsible Competitiveness work with AccountAbility.

WTO Tribune wrote an article here (“Government duty-bound “responsibility”….in Chinese: ??“?”???) about the session here and captured some of my main points, but which I summarize here. (The entire transcript of my remarks in Chinese can be found here.

My main points:

1) Shifting markets to reward responsible business action requires a level playing field that no single sector (civil society, government, or business) can provide;

2) Chinese government officials at the provincial level are unsurpassed globally in their level of innovation and activity to promote new ways ;

3) Each provincial system is unique and there is need for coordination amongst local governments, the center and international stakeholders;

4) This unique approach to promoting sustainable development is both an asset and a liability, because if Chinese stakeholders do not coordinate properly, their market signals will be ignored by international buyers, ie, Chinese standards may not be recognized;

5) Chinese government officials, working with businesses, and using the power of the government bureaucracy, the media and civil society to promote  good company practices and punish the bad, have the chance to clarify the way voluntary sustainability standards (such as the SA8000, GRI, ISO, AA1000, CSC9000T, FSC, etc) mature at the national and international levels;

6) Rather than create additional hoops for companies to jump through, governments can achieve economic, social environmental objectives by leveraging existing market mechanisms such as voluntary sustainability standards.

I add a point 7) International voluntary sustainability standards systems should see the power of Chinese stakeholders to pick winning standards as a wake-up call to be more serious about engaging in China and as an opportunity to scale up the impacts of their standards, since China plays such an integral part in so many global supply chains.


Fortune China CSR Survey and Cover Story: “The Dawn of Consumer-Driven CSR in China”

Fortune China AccountAbility cover story March 2010This year’s survey and cover story on Chinese managers’ attitudes toward corporate social responsibility focuses on the role of consumers in driving sustainable consumption in China–and, increasingly, the world. Written by myself and AccountAbility’s Kate Ives, and Shi Yi.

This issue also has great inside shots of a BYD car factory floor.

Read the English version here and the Chinese version here.

Read the 2009 version and 2008 version.


Responsible Competitiveness in China

Responsible Competitiveness in China 2009: Seizing the low carbon opportunity for green development

On November 30, I joined colleagues at the EU China Business Summit in Nanjing, Jiangsu, which dovetailed with the EU-China political meeting.

That day in Nanjing, under support from the Sino-Swedish Corporate Social Responsibility cooperation, AccountAbility launched the report Responsible Competitiveness in China 2009: Seizing the low carbon opportunity for green development.

This from AccountAbility:

Businesses in China are increasingly working with government and civil society to shift markets to reward sustainable development. These responsible business practices are becoming more and more embedded in the country’s emerging green industrial policy and low carbon development pathways. In some areas, China is set to leapfrog into the elite group of global green innovators.

These are some of the highlights from the report ‘Responsible Competitiveness in China 2009: Seizing the low carbon opportunity for green development’, launched at the 5th annual EU-China Business Summit as part of the Swedish EU presidency on 30 November in Nanjing, China.

The analysis presented in this report shows that China is developing a distinctive low carbon, responsible pathway, namely that:

  • Low carbon industrial policies offer Chinese businesses and consumers huge opportunities
  • Responsible business ventures in China are now impacting global markets relaunching China’s brand
  • Strong government leadership, incentives and supportive policies are playing key roles

The report was independently researched and written in a unique collaboration between AccountAbility and the China WTO Tribune, with support from the Sino-Swedish CSR Cooperation Project. Learn more about the report’s key findings.

The Joint Statement of the 12th EU-China Summit specifically “decided to strengthen high-level dialogue and exchanges between think-tanks from both sides, and to promote and support regular exchanges.” Read the Joint Statement in full. AccountAbility’s partnership with the China WTO Tribune is an example of this kind of knowledge and collaboration exchange.


Hopes for Obama’s first China trip

Great Hall of the PeopleI took Obama’s visit as a chance to write about how company action should play a more prominent role in the trust building and competitiveness equation of the Sino-US relationship. My Guardian article, A green call to arms, (link to Chinese version here) centers on climate change. Meanwhile, my ChinaDialogue piece, Obama’s China moment (and the Chinese version) addresses wider issues of corporate social responsibility. I focus especially on sustainability standards and other global “rules of the game” that the US and Chinese governments should encourage companies to improve jointly.

Guardian: A green call to arms (Chinese)

ChinaDialogue: Obama’s China moment (Chinese)


Advancing Sustainable Competitiveness of Chinese Transnational Corporations

cover of Advancing Sustainable Competitiveness of Chinese Transnational CorporationsA Paper by Long Guoqiang, Simon Zadek, and Joshua Wickerham

AccountAbility’s Managing Partner, Simon Zadek, launched this report at the Boao Forum this year in Hainan and at the China Entrepreneur Club’s Daonong Green Companies Forum in Beijing. This paper is part of a two-year study with the State Council’s Development Research Center on “China’s sustainable trade strategy” working with several central-level Chinese research organizations and three international think tanks.

This paper examines how the Chinese business community can best use international sustainability standards to enhance their competitiveness in global markets and more effectively place themselves on a sustainable economic pathway.

It highlights the opportunity for Chinese businesses, supported by enabling public policies, to become a force in shaping the next generation of sustainability standards in global markets as a competitive strategy consistent with China’s broader interests. Doing so will require deeper engagement in existing standards initiatives, and a more explicit role amongst the communities that have developed and now govern them. Effective engagement in such standards is a means of off-setting competitive disadvantages, and creating competitive advantages when businesses and nations choose a more sustainable development path.

This paper sets out both strategic options for businesses and policy options for the Chinese government to realise sustainable development and competitiveness goals.

Download the full English version, full Chinese version, or the bilingual executive summary.

AccountAbility DRC _ China Sustainable Trade Strategy_Press Release_Chinese and English the press release.

Mentioned in the Harvard Business Review blog here.

Video interview with me on NetEase discussing link between sustainability and Chinese competitiveness (in Mandarin Chinese).


3rd Annual Fortune China CSR Survey and Cover Story: “China’s CSR Change Makers”

Fortune China March 2009 cover ??????????? 2009?3?This is Fortune China’s 3rd annual survey of Chinese business leaders. This year Fortune surveyed 20,000 people using a survey designed by AccountAbility. The cover this year is much more uplifting than last year’s.

Download the full English version here.

The Chinese version is on Fortune China’s website here.