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Interpretation to Corporate Social Responsibilities (CSR)

Origin of Social Responsibility Concept

Since the 20th century, CSR campaign has arisen in western developed countries in succession. With the accelerated industrialization at the beginning of the 20th century in US, people reflected that enterprises should take into consideration all other social interests in addition to increasing shareholders’ interests against the background of economic crisis resulting from such factors as pursuing maximum profits blindly. In this way, the concept of modern CSR came into being gradually. While the social problems caused by enterprises becoming increasingly protruding and multinationals imposing greater and greater influence to the world after entering the 21st century, the matters of CSR are more extensive and inclusive and have to do with the concept of sustainable development, including the protection of ecological environment and natural resources. An increasing number of enterprises begin to assume social responsibilities actively and take it as code of conduct to perform economic responsibilities, environmental responsibilities and social responsibilities.

Driven by international organizations, CSR campaign has been extending around the world gradually.

◎ In October 1997, the Council on Economic Priorities (CEP) first released the SA8000 International Standard – the first international standard of social responsibilities for third party certification in the world.

◎ In 1997, the Coalition for Environmentally Responsible Economies (CERES), a US non-governmental organization, and United Nations Environment Programme (UNEP) jointly launched the Global Reporting Initiative (GRI), aiming to formulate and promote sustainable development reporting guidelines and match the report on economic, environmental and social achievements with the level of financial report.

◎ January 1999, the UN Secretary General at the time Kofi A. Annan put forward the concept of “corporate social responsibility” (CSR) as well as the Global Compact for promoting CSR at the World Economic Forum held in Davos, Switzerland.

◎ July 2000, the UN headquarters officially launched the Global Compact initiative, calling on all companies to fulfill their social responsibilities and abide by ten basic principles regarding human rights, labor, environment and anti-corruption.

◎ 2002, Fortune magazine included CSR as a key benchmark in its selection of the World’s Most Admired Companies. The Dow Jones Sustainability Indexes (DJSI) also began to use environmental protection and the establishment of good customer relations and investor relations as its major evaluation criteria.

◎ In November 2010, International Organization for Standardization released the ISO26000 Guidance on Social Responsibility – an international standard for social responsibility guidelines.

CSR Policies in China

◎ January 2006, the new Company Law of the People's Republic of China clearly set forth in Article 5 that, “in conducting its business, a company must abide by laws, administrative rules and regulations, observe social morals and business ethics, act in good faith, subject itself to the supervision of the government and the public and fulfill social responsibilities.”

◎ October 2006, the resolution passed during the Sixth Plenary Session of the Sixteenth Central Committee of the CCP featured the decision to “increase the social responsibilities of citizens, companies and various organizations”.

◎ September 2006, the Guideline on CRS of Public Companies In the Shenzhen Stock Exchange was issued, which defined the detailed requirements regarding the social responsibilities of public companies in regard to protection of the rights and interests of shareholders and debtors , protection of the rights and interests of employees, protection of the rights and interests of suppliers, customers and consumers, environmental protection, sustainable development, public relations and commonwealth undertakings.

◎ April 2007, the Guideline on CSR of Financial Institutions of the Shanghai Banking Industry was issued by Shanghai Bureau of the CBRC, which set forth CSR requirements for financial institutions in Shanghai’s banking industry regarding the protection of stakeholder rights and interests, environmental protection, protection of public interests and corporate social responsibilities.

◎ December 2007, the Opinions of CBRC Office on Strengthening CSR of Banking Financial Institutions was announced, which defined the role and influence of banks in the promotion of social responsibility and set forth the direction and measures for the fulfillment of CSR. The Opinions required institutions to publish annual CSR reports to and establish clear approaches and objectives for CSR fulfillment.

◎ January 2009, the Shanghai Stock Exchange issued a guide for the preparation of CSR Fulfillment Report to all public companies, setting forth normative requirements for CSR fulfillment reporting, identifying the main focuses on social sustainability, environment and ecological sustainability, and economic sustainability, requiring the disclosure of the social contribution of each share and the calculation method were possible and suggesting third-party verification.

◎ January 2009, China Banking Association (CBA) distributed a notice regarding social responsibility guidelines to every organization member, stating that the CSR of financial institutions shall at least include economic responsibility, social responsibility and environmental responsibility. The guidelines also set forth specific requirements regarding social responsibility management.

◎ In July 2012, the China Banking Regulatory Commission (CBRC) issued the Supervisory Guidelines for Performance Appraisal of Banking Financial Institutions, in which the social responsibility index was set as one of the five indexes for performance appraisal of financial institutions in the banking industry. As an important non-financial factor, social responsibility index puts stress on that banking financial institutions should take sustainable development as their objective and achieve sturdy business operation and scientific development.

In June 2015, the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China and Standardization Administration of the People's Republic of China issued Social Responsibility Guideline (GB/T 36000-2015), Guide to Compile CSR Reports (GB/T 36001-2015), Guide to CSR Performance Classification (GB/T 36002-2015), which opened up the promotion of CSR at national level. It signifies that CSR steps into the implementation phrase from starting phrase in China.