Nov 10, 2015
It is truly an honor and a pleasure to be here in Beijing to support the Launch of the 2015 Report on the Sustainable Development of Chinese Enterprises Overseas.
I would like to first extend my gratitude and warm thanks to Ministry of Commerce (MOFCOM) and the State-owned Assets Supervision and Administration Commission (SASAC) for co-hosting this launch event with UNDP China, but more importantly their leadership and bravery.
Now, Ladies and Gentlemen, you may wonder why I say bravery.
Well, for the last two years, UNDP has been privileged to develop this extremely strategic partnership with the Ministry of Commerce and the State-owned Assets Supervision and Administration Commission on an extremely important issue – promoting the sustainable development activities by Chinese enterprises overseas.
But as the British writer Thomas Fuller once said “All things are difficult before they are easy”. Indeed, the path to the report which you now are able to read and digest has been a challenging one, because it really is the first of its kind.
The 2015 Report on the Sustainable Development of Chinese Enterprises Overseas contains within it the largest collection of data and analysis relating to Chinese firm’s perceptions of their environmental, social and economic performance as well as the processes and frameworks they have put in place to encourage responsible behavior. It also contains a comprehensive list and analysis of the policies and measures that the government has issued to date, and new, up-to-date data on Chinese investment, projects and people working overseas. Bringing together such a report, which can and should act as a baseline for the future, with all the concerns and risks of negative reporting that such a report brings with it, is, indeed, truly brave.
Because, to date, the story about the impact of Chinese companies operating overseas, has often been misunderstood. Although welcomed in principle and spirit by developing countries, on the ground, it has been more complex.
Today, with this report, Chinese companies and the Chinese government have said that they want to take a new approach. With Chinese outward direct investment (ODI) rising at an average rate of 36.4% each year since 2000, and with new commitments to greater international reach by Chinese companies through, inter alia, the Asian Infrastructure Investment Bank, the “Belt and Road” initiative, the New Development Bank of the BRICS, and the Forum of China-Africa Co-operation this openness is certainly the right response.
Corporations are key stakeholders in the effort to lead our world to a more sustainable future and for a successful implementation of the SDGs. However, the private sector will only maximize its contribution to development if it goes beyond philanthropy and Corporate Social Responsibility (CSR), and find ways to converge its core business with development goals, in ways that are commercially viable, while generating positive social and environmental results at the same time. Concepts such as “Shared value” and “Inclusive Business” – recently adopted by the G20 – are increasingly being used by business leaders to describe and drive their integration of sustainability into their core-businesses – for instance, shifting to provide affordable and innovative quality products and services for low-income communities, utilizing renewable energy while enhancing productivity and generating income. In doing so, leaders understand that such sustainable markets will themselves create more business opportunities.
And indeed this report – especially its case studies – shows that Chinese businesses are amongst such leaders. Spurred by guidelines and policies issued by the Chinese government, their financiers as well as taking their own initiative, many Chinese businesses are working hard to deliver sustainable development globally. And the Report identifies that these government’s emphasis, institutional constraints, ensured enforcement and penalties have been effective in regulating enterprises’ practices. It is also revealed in the Report that the scale of an enterprise bears strong relevance to its sustainability performance overseas; and that the longer an enterprise operates overseas, the better its sustainability performance. We have every reason to believe that, with time going by and experience being accumulated, they will do better in the future.
And more and more Chinese companies are meeting international standards for sustainability. More than 90 Chinese companies are involved in Extractive Industries Transparency Initiative (EITI) reporting; 270 Chinese companies are members of the UN Global Compact. Environmental management systems, like ISO14001, are also increasingly gaining traction within Chinese companies.
That said, as the companies themselves admit, they face great challenges. Key challenges that come across in the report are with regard to ensuring more use of local people, technology and services as well as environmental stewardship – which has been a major challenge within China to date as well.
But at UNDP, we have great hope for the future. A recent IMF report suggested that relocation of a good proportion of China’s businesses and industry to Sub-Saharan Africa could help boost economic activity and income in that region by 4% after 10 years compared to business as usual. With this report as well as the Alliance for Sustainable Chinese Enterprises Abroad (ASCEA) we are also launching today, we hope to enable dialogue, research and the implementation of pilot projects to assist the sustainable pace of Chinese companies’ overseas operations, and to deliver even more growth that is inclusive and green.
We are also hopeful that the Chinese presidency of the G20 will carry on and deepen the work started on inclusive business, which can support setting in place he right policies that the companied can follow when investing overseas and therefore enhancing their sustainability impacts.
More can be done – in quite innovative ways – and through the new alliance we will continue to partner with the Chinese government, host country governments and companies themselves to deliver more such reports, guidance, training and other activities, here in Beijing and on the ground in other developing countries.
Ladies and Gentlemen,
There is an old Chinese saying: Every journey begins with a single step (q ian li zhi xing, shi yu zu xia千里之行，始于足下).
Delivering on the new Sustainable Development Goals, and the interconnections between economic, social, and environmental policy, is like a long journey lying ahead of every one of us, and the hard efforts from businesses, as well as governments and the public must begin now. UNDP has been a close and trusted development partner of China for more than three decades, and this joint report signifies the deep strength of that partnership. It has taken bravery and leadership to get here, and we need to continue this in future, delivering strong partnerships to fulfill the sustainable development goals together.
Thank you once again for your attention, and I wish you fruitful deliberations.