THE LIFEWORTH REVIEW OF 2008

The Rise of Asian Responsible Enterprise Challenges

Responsible enterprise challenges are emerging in Asia and in the rest of the world due to the activities of Asian firms. Such challenges arise because of the impacts of economic activity, but also because of changes in society that affect the way people view companies and their ability to engage them.

Within Asia, economic development has brought many gains as well as new problems. The environment has become a major concern across many parts of Asia in recent years. A report from the UN in 2008 mapped the scale of the pollution problem and its implications for human health. The brownish haze, sometimes more than a mile thick and visible from aeroplanes, stretches from the Arabian Peninsula to the Yellow Sea. The UN report identified 13 cities as brown-cloud hot spots, among them Bangkok, Cairo, New Delhi, Tehran and Seoul. It also demonstrated how “atmospheric brown clouds” are dramatically reducing sunlight in many Chinese cities and leading to decreased crop yields in rural India. The impact on public health is significant. “340,000 people in China and India die each year from cardiovascular and respiratory diseases that can be traced to the emissions from coal-burning factories, diesel trucks and wood-burning stoves,” reported the New York Times.23

Research done by marketing agencies during 2008 tell us that this pollution is leading to high levels of local environmental concern. Agencies of the WPP Group found that Chinese consumers see the environment as a higher priority than do their US and UK counterparts. 31 percent of Chinese consumers told them that the environment was a higher priority than the economy, compared to 28 percent in the UK. The French market research agency Institut Français d’Opinion Publique et d’études de marché (IFOP) found similar results, with a higher percentage of Chinese, Indian and Japanese respondents saying they were very concerned about environmental problems than people from the US or Western Europe (Figure 1). Sixty-nine percent of Chinese respondents to WPP’s research said that they expected to spend more on environmentally friendly products in the next year. Sixty percent said they think about the environment when they shop. IFOP found more Chinese consumers thought the environment is important or essential to consider when they shop than US, Italian or French respondents (Figure 2).24 The way different responents`unferstand the concept of ‘the environment’, for instance whether it relates to personal health or public good, would have an impact on responses, as well as cultural influences when being surveyed, and so more analysis is required.25 However, these research findings indicate that environmental awareness exists in Asia, and connections can be made to consumer behaviour, thus constituting a local business case to address sustainability issues within Asia.

The speed of economic development, as well as changes in traditional political systems and cultural norms, has contributed to a growth in corruption across Asia – a key responsible enterprise challenge (see: Olympian graft). The exporting of corruption across Asia, as businessmen bribe politicians in other Asian countries, reached extreme and blatant levels during 2008, with the exposure of arrangements that were being made between Chinese businessmen and the husband of the Philippine President Gloria Arroyo (see Foreign direct corruption).

Economic development has also brought changes in social life, generating problems typical in higher-income societies such as obesity. In Kuwait, almost three quarters of the population above 15 years old are overweight or obese, the 8th worst rate in the world. Not far behind are the United Arab Emirates, Saudi Arabia, Bahrain and Qatar, according to the World Health Organisation. The causes are increased wealth, so people have access to household help, motorised transport and a carbohydrate rich diet. The impacts of this affluence are costly. Only the Pacific island of Nauru has a higher diabetes rate than the United Arab Emirates. Already food companies are being asked to provide healthier options. For instance, food engineers at Al Islami Foods, a halal foods company based in Dubai, were reported in the middle of 2008 to have been working on reducing carbohydrates and fat in their chicken burgers, sausages and sandwiches.26

As mentioned earlier, estimates in the Economist suggest that sometime in 2008 the number of middle class people in Asia exceeded that in the West.27 The economic definition of middle class concerns the percentage of one’s expenditure that is entirely discretionary. A middle class can therefore be more discerning consumers, creating a direct driver of responsible enterprise. In addition, middle class people have more disposal income to donate to common causes, thereby supporting a professional civil society, and can consume more media services, thereby stimulating civil discourse. Recognising the growth in giving, RBS Coutts launched a philanthropy advisory service for Asian donors in 2008.28 The terrible Sichuan earthquake on May 12 led to many Chinese people giving to relief charities for the first time. In time the increased levels of philanthropy might lead to a more vocal civil society, in which case they may express opinions on matters of responsible enterprise that relate to their organisational mandates.

A range of Asian responsible enterprise challenges are arising due to the operations of Asian firms other parts of Asia and around the world.29 For instance, although Chinese investment in Africa is helping finance new infrastructure, it raises concerns about corrupt payments, and the knock on effects on effective and accountable governance (see: Beyond the Western financial crisis).

Western corporate responsibility professionals have been waking up to the global implications of a new era of Asian commercial power. They realise that unless Asian firms embrace their corporate responsibilities then in a global market the efforts to promote responsible enterprise in the West will be futile. At the first European conference of the corporate responsibility association, Net Impact, Simon Zadek told the audience that the important corporations on the world stage now include those from Brazil, Russia, India, and China and that engaging them is a central challenge for people interested in making an impact on corporate responsibility (see Movement East).

During 2008, Lifeworth conducted a survey of the 4,000 subscribers to our bulletin, asking about their view of the future of research needs on responsible business. Respondents considered that the most important regions for future research are in Asia. Other regions with emerging nations were also ranked highly, as shown by Figure 9, in the section ‘Movement East’.

» The Rise of Responsible Enterprise Initiatives within Asia

Figure 1: IFOP Research on Comparative Environmental Concern
Figure 2: IFOP Research on Comparative Consumer Environmental Concern

These figures and all 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.)

Comments

One Response to “The Rise of Asian Responsible Enterprise Challenges”
  1. Tony says:

    Its a start, lets hope they move forward.

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