[CSR Briefing 1] Corporate Social Responsibility is Essential to Becoming a Global Company 2

[CSR Briefing 1]

1. Global company executives must be interested in CSR / Corporate social responsibility is essential to becoming a global company / Potential pressure for CSR in Korea is high

2. Chinese citizens' perception of corporate social responsibility

Perception of corporate social responsibility among Chinese citizens

In the case of China, which is experiencing rapid growth, the perception of corporate social responsibility (CSR) management follows a typical developing country pattern. While developed countries tend to demand strict ethical standards and high moral integrity 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 perceive 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). While this is not as high as the average of 86 points in the UK, US, Mexico, and Indonesia, it is clearly a high score. On the other hand, Chinese citizens are passive in recognizing 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 strongly perceived as not being corporate social responsibilities.

The reason why Chinese citizens perceive the scope of corporate social responsibility management as relatively narrow appears to be due to the trust and expectations placed on companies driving economic growth. When asked if large corporations are 'making society better 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 give high marks to companies' efforts to ensure transparency in their social and environmental responsibilities. A significant 48% of Chinese citizens strongly agree with the statement that 'large corporations are openly disclosing their social and environmental responsibilities.' This shows exceptionally high trust compared to Korea (5%), Mexico (1%), not to mention the US (28%), UK (25%), and Indonesia (36%).

The pro-business sentiment among Chinese citizens leads to strong expectations for corporate social activities. When asked, 'I wish my company would 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, there were many positive responses to the question, 'I would participate if my company organized an event to support local development' (very much so: 59%). This indicates that pro-business sentiment is 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 enforce 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 compulsion for realizing social responsibility, Chinese citizens tend to believe that corporations should be made to fulfill their social responsibilities, even through legal enforcement.

Ultimately, it is clear that the cost for Chinese companies to invest in CSR management is not high at present, 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 also offers implications for our companies operating in China.■

[Figure 1] Perception of Corporate Social Responsibility in Major Countries