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Rating corporate good citizens
By Wu Jiayin |
January 13, 2009, Tuesday
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Print Edition
Print Edition
IT'S tricky to find out about corporate social responsibility and how well companies live up to their claims of becoming greener and caring more for their communities and employees.
The Shanghai National Accounting Institute (SNAI) has created an index measuring fulfillment of CSR of businesses listed in Chinese stock markets. On December 24, SNAI announced the results of its first annual Corporate Social Responsibility Index.
SNAI worked out the index through an independent evaluation of the 2007 annual reports of almost all (more than 1,500) listed companies in the Shanghai and Shenzhen A share markets, as well as the sustainable development reports (SDR, disclosed separately and not compulsory) of 53 companies.
Baoshan Iron & Steel Co, Ltd, PetroChina Co Ltd and Industrial and Commercial Bank of China Ltd ranked the top three on the list of enterprises with separately disclosed SDR reports. Qingdao Haier Co Ltd, Laiwu Iron & Steel Co Ltd and China Yangtze Power Co, Ltd topped the list of enterprises that did not separately disclose SDRs.
The calculation was based on a series of international quality standards, including ISO 9000 (ISO stands for International Organization for Standardization), ISO 14000 and scientific statistics, said Deng Chuanzhou, SNAI's associate professor who was responsible for drawing up the index.
Given the fact that China lacks a perfect information disclosure system, this new index may not be authoritative as many companies may not have fully disclosed their fulfillment of CSR in their annual reports.
However, the significance and main objective of the index is to encourage more enterprises to disclose the information.
As Xie Rong, vice president of SNAI, said, although many highly polluting enterprises are making great profits in terms of accounting calculations, if the huge cost of environmental pollution is considered, their final balance may be negative.
Encouraging disclosure of CSR will thus help improve the sense of CSR among businesses in China.
Meanwhile, Shanghai Stock Exchange has initiated an indicator called social contribution per share this year, an SSE official told Shanghai Daily.
As the disclosure of businesses' social contribution improves, it will not be long before most businesses in China are willing to fulfill their CSR both for the sake of their reputation and because of peer pressure.
The Shanghai National Accounting Institute (SNAI) has created an index measuring fulfillment of CSR of businesses listed in Chinese stock markets. On December 24, SNAI announced the results of its first annual Corporate Social Responsibility Index.
SNAI worked out the index through an independent evaluation of the 2007 annual reports of almost all (more than 1,500) listed companies in the Shanghai and Shenzhen A share markets, as well as the sustainable development reports (SDR, disclosed separately and not compulsory) of 53 companies.
Baoshan Iron & Steel Co, Ltd, PetroChina Co Ltd and Industrial and Commercial Bank of China Ltd ranked the top three on the list of enterprises with separately disclosed SDR reports. Qingdao Haier Co Ltd, Laiwu Iron & Steel Co Ltd and China Yangtze Power Co, Ltd topped the list of enterprises that did not separately disclose SDRs.
The calculation was based on a series of international quality standards, including ISO 9000 (ISO stands for International Organization for Standardization), ISO 14000 and scientific statistics, said Deng Chuanzhou, SNAI's associate professor who was responsible for drawing up the index.
Given the fact that China lacks a perfect information disclosure system, this new index may not be authoritative as many companies may not have fully disclosed their fulfillment of CSR in their annual reports.
However, the significance and main objective of the index is to encourage more enterprises to disclose the information.
As Xie Rong, vice president of SNAI, said, although many highly polluting enterprises are making great profits in terms of accounting calculations, if the huge cost of environmental pollution is considered, their final balance may be negative.
Encouraging disclosure of CSR will thus help improve the sense of CSR among businesses in China.
Meanwhile, Shanghai Stock Exchange has initiated an indicator called social contribution per share this year, an SSE official told Shanghai Daily.
As the disclosure of businesses' social contribution improves, it will not be long before most businesses in China are willing to fulfill their CSR both for the sake of their reputation and because of peer pressure.
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