Sune Skadegaard Thorsen says what affects business share prices most is variations in the surrounding economy. Provided to China Daily

Corporate social responsibility has a big role in propagating change, says Danish expert

There is a sudden, drawn look on Sune Skadegaard Thorsen's face when he speaks about why he turned his back on a successful career in corporate law, and ventured down a road less traveled.

"My parents were dying," he says. "They died quite early, both of them. That gives you a lot of time for reflection. I did that, and realized, everybody can make a change.

"It's not life is short, it's more that, everything is possible," he says.

Thorsen, who at one time ran one of the biggest international law practices in St Petersburg, Russia, was well acquainted with the way success in business could benefit an enterprising individual.

But in the crucible of personal tragedy, the now 51-year-old Dane forged a desire to explore the possibility that business could also play a role in widespread, positive social change.

Unlike many of his peers, being successful in corporate law had only ever been the means to achieve an end, not the end itself. Thorsen wanted to understand the business world from the inside, so he could help turn it on its head.

That was why in 1996, he put the big bucks and the boardrooms of corporate law behind him, and entered the then fledgling field of corporate social responsibility.

Thorsen was in Beijing recently for the launch of a new CSR initiative in China called the Danish Footprint Network. Contracted to lend his expertise to the Danish government-backed initiative, which aims to help the more than 480 Danish companies operating in China navigate new international CSR compliance requirements, Thorsen says the move from his nation's leaders is a sign of changing times.

European governments and foreign companies are increasingly using social responsibility as a means of strategically chasing a competitive advantage in China.

Sitting in a Beijing boardroom, Thorsen says there's one simple reason why choosing to implement good CSR in China is a decision foreign and local executives are making with their heads, rather than their hearts.

In the cutthroat world of business, it is now a matter of survival.

In 2011, after the international community did some soul searching of its own, the United Nations adopted a set of guiding principles that set a global benchmark for corporate social responsibility. The Chinese government, Thorsen says, was one of the most enthusiastic supporters of the game-changing development.

The dollar is still king, but social responsibility must be courted if a business wants to maintain its place at the top, he says.

"There's no doubt that CSR is now a must," Thorsen says. "Sustainability is a way to win markets. Increasingly, especially in the past few years where the compliance part has been defined (by the UN), we have a situation where you will soon lose your license to operate if you are not responsible. If you don't do anything, you'll be out of business within the next 10 to 15 years. There is no doubt about that."

Thorsen, who is widely regarded as a pioneer in the field of business and human rights, is the chief executive officer and founder of GLOBAL CSR. He is also affiliated with and lectures at a range of distinguished institutions, including Copenhagen Law Faculty, Columbia University in New York and Monash University in Melbourne.

On the frontline of pushing for reform, he witnessed a slow awakening in corporate culture; it was a realization CSR could yield big - if indirect - returns.

"The interesting thing is that what affects business share prices most is possibly the variations in the surrounding economy, more than whether they are sustainable or not," he says. "But there's definitely indications from most of the studies that you perform better over time, if you implement solid sustainability strategies. In my opinion, it's an expression of sound management."

Searching for an example among the tapestry of products surrounding him, Thorsen says that he draws inspiration from material things that are woven into the background of daily life.

Plucking at a single thread, he picked up a bottle of Coca Cola, and used it to emphasize a point about the evolution of CSR.

"They (Coca Cola) met a huge challenge in India, where they took ground water out to rinse their bottles and fill them up again with sugar, which of course had an impact on the right to clean water for the community," he says.

These days, Thorsen says, Coca-Cola is "working diligently" to implement the new CSR standards set out by the UN.

The chief research officer for the China National Textile and Apparel Council, Liang Xiaohui, says awareness of social responsibility in China has risen to the point where local and foreign companies now have no choice but to do the right thing.

"It's very important for companies from outside China to remember people are looking at them and expect good things from them," Liang says.

"In China we have many opportunities, and more businesses are competing not just for the bottom line, but competing in doing good things."

Ensuring a minimum wage and minimizing environmental and social impacts are now standard in terms of CSR in China, Liang says.

He adds that foreign companies that practice good CSR in China now are those most likely to benefit from stronger trade relations with the world's second-largest economy in the future.

It's a truth not lost on Denmark, which in 2012 saw bilateral trade with China reach an unprecedented $18 billion (13.6 billion euros).

Danish Ambassador Friis Arne Petersen says the new CSR initiative his country has implemented will actually help Danish companies develop a competitive edge in China.

"We believe that Danish companies who work systematically and strategically with CSR can contribute positively to the sustainable development of Chinese society and leverage this as a competitive advantage," Petersen says.

During his China trip, Thorsen also visited the Beijing offices of Danish bio-innovation company Novozymes. In 1999, he says, Novozymes became one of the first Danish companies to implement management systems to minimize adverse impacts from its operations.

In a pristine lab, senior manager Wu Guifang, 39, supervised a team of workers decked out in lab coats.

Navigating her way through a varied profusion of scientific equipment, Wu says Novozymes' commitment to safety and care has been excellent in her 11 years with the company. In particular, she praises the strict guidelines observed when disposing of chemicals and waste materials produced during research and production.

Wu, who remembers a time in China when social responsibility and safety were the poor, forgotten cousins of profit and production, says good CSR made for a happier, more productive workplace.

As a young girl growing up in Guangdong province, she remembers her father being devastated when many of his friends were killed in an explosion at the coal mine where he worked.

"My father was not working down the mine, but he had so many colleagues who were," Wu says. "In 1985, there was a serious accident down the mine, and I think about the 50 people who died. It was a very scary story."

"There's been a dramatic change (in China) since then."

Thorsen agrees, saying that Chinese state-owned companies in particular are working "very hard" to implement CSR strategies.

"This is what we need," he says. "No one should automatically accept adverse impacts (from business). We need to make good changes for the generations to come.

He had this final piece of advice for companies seeking to operate in modern China.

"They should seek, in the Chinese market, to reap the benefits of the heightened awareness about social and environmental contributions."

Thorsen, who likens the CSR movement in China to a "tidal wave", confidently sees a future when making money and making the world a better place are synonymous.

The road less traveled he chose to walk as a younger man is getting crowded. These days, it's the only way into China, he says.

josephcatanzaro@chinadaily.com.cn

 

(China Daily European Weekly 09/13/2013 page22)