Coca-Cola and Procter & Gamble the best reputations for corporate social responsibility in the fast moving consumer goods category in China, while Volkswagen and First Automotive Works come first in the auto industry, according to a new CSR Index produced by international public relations firm Ruder Finn and Beijing’s Tsinghua University.
However, Chinese companies are faring well in the food and drink sector—Coca-Cola and Pepsi are the only non-Chinese multinationals in the top 10—the situation is very different for hygiene products and the auto industry: Longliqi and Jahwa are the only Chinese companies in the top ten among hygiene products, while FAW and Chery (second and third respectively) are the only Chinese companies among the automotive leaders.
The authors of the report say that corporate social responsibility was a low priority in China until the 1990s, but has become a major boardroom priority in recent years. The CSR Index asked consumers about their perceptions of the CSR performance of leading companies and sought to measure the impact of CSR on consumer behavior.
Responses to the survey suggest that in the FMCG sector, more than two thirds (68.7 percent) of the 3,000 consumers interviewed would refuse to buy or reduce their purchase of products from companies deemed irresponsible, while 73.2 percent would prefer to purchase products from companies with outstanding CSR performance. For the automotive industry, the corresponding numbers are 62.9 percent and 72.1 percent respectively.
When interviewed about the CSR performance of domestic companies, about half of the consumers rated it “average” (49.5 percent and 51.9 percent in the FMCG and auto industries respectively) and less than a third expressed satisfaction (30.6 percent and 32.3 percent respectively). Only 11.2 percent (FMCG) and 14 percent (auto industry) of consumers think that the CSR performance of Chinese companies is better than that of their foreign counterparts.
According to Professor Zhao Shuguang, head of Tsinghua Media Survey Lab, “Foreign companies have advantages over domestic companies in terms of management, technology, capital and resource allocation to CSR. There is a long way to go for Chinese companies to catch up with foreign companies in terms of CSR performance.”
Consumers' top three concerns regarding the CSR performance are product quality, environmental protection, and management integrity. At the other end of the spectrum, the three criteria considered least important by Chinese consumers are intellectual property, fair competition and—ranking last—employee rights and interests. The CSR Index incorporates three other criteria: philanthropy and public welfare; production safety and occupational health; business ethics.
According to the authors: “It is not surprising to find product safety dominating the list of priorities of Chinese consumers, considering the history of recent product safety and quality scandals that reached a climax with the 2008 Chinese milk scandal. More surprising is the strong second position of environmental protection, a sign of the growing environmental awareness of Chinese consumers; and the relative weak position of philanthropy and public welfare.”
Adds Jean-Michel Dumont, chairman of Ruder Finn Asia, “Although donating money and philanthropy are part of CSR, it does not necessarily represent its most important element and CSR is about much more than that. Consumers are demanding healthy and safe products, and are calling for a trustable market environment. This in fact is the most fundamental part of CSR."