[CSR Public Opinion Brief No. 1] Socially Responsible Management is Essential to Become a Global Company 2

[CSR Public Opinion Brief No. 1]

1. Global company executives must be interested in CSR / Socially responsible management is essential to become a global company / Potential pressure for CSR in Korea is high

2. Chinese citizens' perception of corporate social responsibility

Chinese perception of corporate social responsibility

In China, which is experiencing rapid growth, a typical developing country pattern of perception regarding corporate social responsibility management is observed. While developed countries tend to demand strict ethical standards and high morality from corporations, developing countries tend to limit the scope of corporate social responsibility primarily to the economic interests of individual consumers.

First, like citizens of Korea and other countries, Chinese citizens recognize product quality, price, and product safety, which are directly related to consumer interests, as areas of corporate responsibility. Converting the average scores of these three items to 100 points, China scored 75 points, similar to Korea (74 points). Although this is lower than the average of 86 points for the UK, US, Mexico, and Indonesia, it is clearly a high score. On the other hand, Chinese citizens are less inclined to recognize moral and philanthropic items such as 'global human rights protection' or 'application of universal ethical standards' as corporate social responsibilities. China (50 points) showed a significant difference compared to Korea (61 points) or the average of the other four countries (73 points). Furthermore, in China, items that are distant from direct consumer interests, such as 'poverty or illiteracy issues,' are less likely to be considered corporate social responsibilities.

The reason why Chinese citizens perceive the scope of socially responsible management that corporations must undertake as relatively narrow appears to be due to the trust and expectations placed on corporations driving economic growth. Regarding the question 'Are large corporations creating a better society for everyone?', 45% of Chinese respondents answered 'Very much so.' This contrasts sharply with respondents in Korea (3%), the US (9%), and the UK (11%), who hold critical views of corporations [Figure 2]. Moreover, Chinese citizens also give high marks to corporations' efforts to ensure transparency in their social and environmental responsibilities. A substantial 48% of Chinese citizens strongly agree with the statement 'Large corporations are openly disclosing their social and environmental responsibilities.' This shows exceptionally high trust compared to Korea (5%), Mexico (1%), and even the US (28%), UK (25%), and Indonesia (36%).

The pro-business perception of Chinese citizens leads to strong expectations for corporate social activities. To the question, 'I would like my company to provide educational opportunities for employees to become citizens who fulfill their social and environmental obligations,' 64% responded 'Very much so.' This is nearly three times higher than the 23% in Korea. Furthermore, regarding the question, 'I would participate if my company organized an event to support local development,' there were many positive responses (Very much so: 59%). Pro-business perceptions are being expressed as a willingness to actively participate in corporate social activities.

However, it is important not to overlook that the majority of Chinese citizens (70%) agree with the statement 'The government should legally mandate corporate social responsibility for a better society.' Unlike the US (41%), Korea (47%), and the UK (55%), which prefer autonomous and indirect enforcement mechanisms over external, legal mandates for realizing social responsibility, Chinese citizens tend to believe that corporations should be compelled to fulfill their social responsibilities, even through legal enforcement.

Ultimately, it is clear that at the current stage, the cost for Chinese companies to invest in socially responsible management is not high, thanks to the favorable perception and trust Chinese citizens have towards corporations. However, the fact that the majority of the public prefers legal enforcement as a method of implementation provides a potential reason for Chinese companies to consider their social responsibilities, and it offers implications for our companies operating in China as well.

[Figure 1] Perception of Socially Responsible Management in Major Countries