Analysis of corporate social responsibility reporting in China

Abstract

CSR Reporting has already been in the mainstream as a common practice of 21st–century business. The benefits of CSR reporting go beyond obtaining license to operate. It also enhances the competitiveness of companies and fosters investor confidence. CSR reporting in China has been growing very fast in recent years due to the increasing pressure from the regulators as well as companies’ stakeholders including buyers, investors as well as local communities. Some of them recognized the benefits and importance of CSR reporting while some merely fulfilled the minimum statutory requirements to publish CSR reports. The CSR reports published by the Chinese companies listed in Hong Kong were examined in this study to assess their quality. When compared to the selected CSR reports by Hong Kong leading companies/organization, the reports published by Chinese companies were of relatively low quality in general with a few outstanding examples. The weakest areas included the way to determine report content and report assurance. This often led to information bias that the companies omit negative and sensitive CSR issues. It is recommended to fully adopt international reporting guidelines such as Global Reporting Initiative (GRI) sustainability reporting guidelines, and thus the report content will be more relevant and comparable. Another major part of this study was a questionnaire survey targeting CSR specialists in Hong Kong to identify their views on CSR reporting in China. The result echoed with the findings from the report benchmarking that the specialists reckoned that the CSR reports produced by Chinese companies have room for improvement. Introducing mandatory CSR disclosure requirement was widely supported. Nevertheless, clear guidance and sufficient support in capacity building for the companies are recommended before launching mandatory CSR disclosure requirements to ensure report quality so that the reports will consist of meaningful and significant CSR information to their stakeholders.