THE LIFEWORTH REVIEW OF 2008

Informal

The business sector in Asia is very diverse and in some countries less regulated than in the West, by either government or private standards, and likewise many of the social and environmental activities of business are informal. Informality also derives from high level of family ownership, described above. This characteristic can lead to an unsystematic approach to assessment of social and environmental aspects of business. This is highlighted by a high variability in what social and environmental issues companies address. Evidence from a 2008 EIRIS report suggest that the range of performance on social and environmental issues is more variable in Asia than the West. For instance, over 80% of Japanese companies were assessed as having either an advance or good management response to environmental issues, better than for Europe, North America and Australasia. However, amongst companies with a very high or high risk exposure on climate change only 17% of Japanese companies have developed a good response, according to EIRIS. “This seeming “lag” on climate change may be due to the fact that it is only relatively recently that companies have been exhorted to deal directly with climate change and we would expect a dramatic increase in these figures in coming years.” explained Mr Hine from EIRIS.64

In one study of the corporate responsibility reports in China in 2009, Guo Weiyuan found their approaches varied widely, and their quality “leaves much to be desired.” There are a variety of ways that companies can identify issues and stakeholders and prioritise them, some focusing most on near-term financial implications, others looking at the importance of a businesses activities to society in making their judgement about what to prioritise.

Jia Feng, deputy director of the Publicity and Education Center of the Ministry of Environmental Protection, in China, explained when looking at the study, that the way to develop a strategy “is not whether a cause is worthy but whether it presents an opportunity to create mutual value. That is, a meaningful benefit for society that is also valuable to the business.” Without systematic approaches to the identification and prioritisation of issues, companies may not be as strategic or effective in either delivering societal or financial value through their efforts at responsible enterprise. For instance, an analysis of the most urgent issues addressing the region, where the chance for effective action diminishes with time and the issue affects the most number of people, would likely identify deforestation in Borneo at a top issue for many companies with supply chains using wood, minerals or palm oil. The impacts on biodiversity, climate, air quality and water supplies are massive.65

The informal sector is a major part of economic activity in Asia. This poses particular challenges for social protection, as domestic workers, for instance, are vulnerable to employment abuse (see: Glassed: Women and CSR). One implication is that encouraging public awareness and respect for informal sector workers through social marketing may be necessary to improve practice in this sector. Another is the importance of working with migrant labourer organisations to improve their ability to educate, engage and represent migrant workers.

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(The references are available in the pdf download and hard copy versions of this annual review, available from Lifeworth’s bookstore.)

This section can be referenced as:

Bendell, J., and C Ng, ‘Introduction’, in J. Bendell, N. Alam, S. Lin, C. Ng, L. Rimando, C. Veuthey, B. Wettstein (2009) The Eastern Turn in Responsible Enterprise: A Yearly Review of Corporate Responsibility from Lifeworth, Lifeworth: Manila, Philippines. (Page numbers for this section are available in the pdf download and hardcopy.)

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