Only two Corporate Social Responsibility (CSR) Reports were issued by Chinese companies in 2005. The number grew to 13 in 2006 and now to 34 in the first half of this year alone. That underlines the growing importance domestic companies are attaching to meeting their social and environmental responsibilities.

The figure is expected to continue to rise as more Chinese companies realize the need to act as responsible corporate citizens and the role CSR plays in sustainable development, says Li Wen, editor in chief of the corporate presentation department of China National Petroleum Corp′s (CNPC) Research Institute of Economics and Technology.

PetroChina, a subsidiary of CNPC, released its first CSR document on February 28. It took eight months for the Hong Kong- and New York-listed company to produce its first non-financial report, and it was finished 21 revisions.

"Compared with transnational companies, domestic enterprises are at an early stage in both systematic CSR operation and CSR report editing, yet they are progressing quickly, with State-owned enterprises (SOEs) the pioneers," Li says.

SOEs lead

A survey by China WTO Tribune, a monthly magazine published by the Ministry of Commerce, shows that of 34 companies issuing CSR reports, about 80 percent are SOEs, including PetroChina, China Petroleum & Chemical Corp (Sinopec) and State Grid Corp of China (SGCC).

Li notes that large SOEs receive more guidance and support from the government than do private firms, so their awareness of CSR development is taking the lead.

Yet SOEs admit they are still learning and should continue to improve skills and increase transparency.

State Grid Corp of China (SGCC), the nation′s largest power transmission company, was the first SOE to release a CSR report when it did so on March 10, 2006.

In January, it released its second report on corporate citizenship that has a new element - an assessment from an external auditor.

According to Li Weiyang, division director of the administrative office of SGCC and leader of its CSR report editing team, SGCC invited the China Enterprise Federation - a non-governmental organization that represents employers - to evaluate its CSR efforts and offer suggestions for further development.

"The move was motivated by the company′s commitment to be more open and transparent, which is in keeping with stakeholder demands and public requirements," says Chen Ying, vice director of the federation.

Report formulation

Domestic companies that have issued non-financial reports are from more than 10 industries, including telecommunications, energy, finance, real estate, textiles, machinery, manufacturing and media.

The reports are labeled in various ways - as CSR reports, sustainable development reports and corporate citizen reports. They range in size from three to 104 pages.

"All the reports have to some extent reflected corporations′ understanding about CSR," says Li Wen. "Most importantly, all of them have stated clearly that CSR is not donations and charity, and does not have to mean extra costs."

Due to their range of businesses, enterprise reports focus on varying sectors to identify their specific obligations.

Private company Xizi United Holding Corp attaches more importance to employees′ rights and protection, while PetroChina sets its corporate mission as "energize, harmonize and realize" for environmental protection, safety and shareholder interests. Listed company Xi′an Jiefang Group Co Ltd puts business credibility and fair operation at the top of its list.

Local staff members of corporations do not yet have extensive experience in writing and issuing CSR reports, so the China Business Council for Sustainable Development suggests that companies seek help from professional agencies.

"We have professional resources and can provide consulting services for corporations," says Dustan Hope, a senior consultant at CSR consulting firm Business for Social Responsibility. "Companies can tell us their needs and proposed targets, and we will produce the reports."

China Enterprise Federation′s Chen points out that outside assistance in producing CSR reports is a global trend.

"There is a mature system in the international market and many professional consulting firms or non-profit organizations can provide such services," she says, adding that her federation has provided such help to a group of Chinese companies, including SGCC.