CSR in China: Strategies for SuccessBy Jerry Zhu
While CSR in China has evolved significantly over the past 10 years, it has still been slow in adoption. One reason is that many young businesses are focused primarily on increasing revenue and profitability. Rather than embrace CSR as an integral part of a successful growth strategy, they view it as an option for, and the responsibility of, established corporations. Another is that many companies equate CSR with simply giving to charity and, as a result, support multiple trendy causes. This approach is unrewarding for both employees and nonprofit/ NGO partners. It also makes CSR feel superfluous to the core business, which usually results in abandoning the program.
Chinese companies would do well to follow the examples set by PepsiCo, Nike, P&G and L’Oréal, whose programs are successful precisely because they follow a set of time-tested strategies that bring value to their brands and the communities they serve.
- Make CSR your business.
It’s the social responsibility of every company to serve its employees and customers by providing competitive compensation, safe and friendly work environments, and delivering high quality products and services. From this perspective, CSR should be considered the business of every business in China.
- Connect with your core competency.
Successful CSR programs make the connection between what the community needs and its core business. For example, PepsiCo supports farmers in Inner Mongolia by helping them plant potatoes. This program lifts farmers out of poverty, while ensuring the company receives a supply of high-quality potatoes to produce its chip products. Nike worked with the Chinese Ministry of Education to develop a physical education curriculum urgently needed by primary and secondary schools, while further promoting fitness among Chinese children.
- Stay focused for the long-term.
It’s essential that CSR programs be focused and engage partners for the long-term. This fosters maximum impact and ensures the relationship becomes an asset to the brand. The most effective programs adopt an overarching theme with corresponding goals that can be tailored to different markets and partners. This approach provides a consistent focus while keeping the program fresh. For example, P&G’s global theme for its CSR program is to help children “Live, Learn and Thrive.” Under this umbrella, it localized a strategy in China to fund Hope Primary Schools; a government-led school system that ensures poor children receive compulsory education. After 20 years of partnership with Hope, P&G has become its largest donor, made a significant impact in the lives of countless children and has earned a strong and positive reputation among Chinese consumers.
- Engage employees and business chain partners.
CSR programs have much greater impact if they leverage the efforts of employees and business chain partners. For example, P&G invites its employees, distributors and partners to participate in Hope School projects. BP is also a good example of having an effective mechanism for engagement. The company created the Employee Matching Fund to encourage volunteerism. It extends the impact of the program by calculating the monetary value of employee volunteer time and then donates those funds to its nonprofit/NGO partners.
- Integrate, integrate, integrate.
As CSR is still a young concept in China, many companies have yet to integrate their marketing and CSR initiatives. However, appropriate alignment can multiply impact, promote sales and build brand loyalty. L’Oréal’s “Be an Employee for a Day” program provides financial support to low-income students through a series of product charity sales held on campuses around the country. The company recruits socially minded university students to become volunteer salespeople at these events, providing them with product training and introducing them to the company culture. As a result, many of these students join L’Oréal after they graduate. Since 2003, this program has contributed millions of yuan to fulfill the needs of China’s poorest students, built a positive image among existing and potential consumers, and expanded its employee recruitment efforts.
Jerry Zhu is a partner and managing director in Allison+Partners’ Global China Practice.