New Environmental Law May Be a Game Changer for CSR in China

Research by Chris Marquis of the Harvard Business School and Yang Chen at Shanghai Maritime University showed that China’s CSR policy has led to an increased number of companies issuing CSR reports, but it has not resulted in better behavior, due to lack of effective monitoring and verification. The researchers found that only companies that were monitored eventually implemented substantive reporting. Most Chinese firms are still reluctant to submit to independent evaluation.

However, the situation may be set to change with China’s new environmental law that came into force on January 1. Penalties imposed on domestic companies have increased dramatically since then. Guo Peiyuan, co-founder of CSR consulting firm SynTao, said during a recent talk at the American Chamber of Commerce that energy-focused inland provinces had seen the most fines imposed. Guo said that local authorities with the political will can simply shut down offending plants or factories to bring about change.

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Vikas is a staff writer for the Sustainable Development news and editorial section on Justmeans. He is an MBA with 20 years of managerial and entrepreneurial experience and global travel. He is the author of "The Power of Money" (Scholars, 2003), a book that presents a revolutionary monetary economic theory on poverty alleviation in the developing world. Vikas is also the official writer for an international social project for developing nations "Decisions for Life" run in collaboration between the ILO, the University of Amsterdam and the Indian Institute of Management.