Annual Report：Top 10 CSR trends in China｜Register Now

The 14th Five-Year Plan (2021-2025) serves as a blueprint for good business. Sustainable development will become a business consensus.

Companies can focus on five areas: domestic consumption, rural revitalization, low-carbon transition, the Belt and Road Initiative and well-rounded human development.

We expect that most companies will be involved in rural revitalization. To create shared value, companies will leverage their expertise to help rural areas develop industries.

Trend 2: 

Internet platform economy moving toward orderly development

Internet platforms have changed the way people live and work and created huge social impacts. The complexity of Internet platforms determines the importance and difficulty of their social responsibility governance. The recent suspension of Ant Group’s IPO and the release of the Draft of Anti-Monopoly Guidelines for the Platform Economy at the end of 2020 have heightened concerns for Internet platform companies.

We expect that China’s regulation on the platform economy will be strengthened in 2021, guiding the platform economy toward an orderly and healthy development.

Trend 3: 

Continuous impacts of COVID-19 on CSR strategies

The coronavirus outbreak has had a huge impact on the CSR work of many companies, especially on the implementation of charity projects and volunteer activities. The pandemic has brought companies back to square one to think about how they can contribute to society on top of donations, who the crucial stakeholders are and how to strengthen relationships with these stakeholders. The pandemic will continue to affect companies’ CSR strategies in 2021.

We expect that CSR budgets will be cut, donations will be reduced and creating shared value projects will increase. We recommend that companies make good use of tools such as Social Return on Investment to scientifically measure the social, environmental and economic impacts generated by their CSR projects when summarizing the achievements.

Trend 4: 

Reframing supply chain responsibility in the post-COVID-19 era

The pandemic and international trade frictions have had a profound impact on supply chain responsibility management, leading to supply chain disruption and triggering adjustments and shifts. On the flip side, the pandemic has forced upstream and downstream suppliers to pay more attention to the construction of responsible partnerships, and enhance social protection for relevant parties involved at the end of the supply chain. The cancellation of orders that occurred during the pandemic has once again increased the international community’s awareness of responsible procurement.

Trend 5: 

The environmental, social and governance ecosystem begins to take shape

The ESG ecosystem in China enters a booming era in 2021. We expect investors to attach more importance to ESG and carry out relevant investments. ESG will continue to gain attention in academia, and investment in research and development will increase. ESG ratings will be a key node of this ecosystem: Listed companies will follow their ESG rating results more closely, making it a powerful driver for listed companies to enhance ESG disclosure and improve ESG performance.

Trend 6: 

Quantitative targets driving digitization of ESG disclosure

We expect that mandatory environmental information disclosure and ESG reporting requirements for listed companies are on the horizon, with the next step focused on high-quality ESG disclosure and efficient ESG data use. At the same time, the latest Hong Kong Stock Exchange ESG Reporting Guide has added several disclosure requirements including quantitative performance indicators, which will drive the digitization of ESG disclosure.

The introduction of digital management tools will be one of the solutions to address the problem of efficient ESG data management. We expect that more companies will adopt digital tools to automate their ESG information management and disclosure processes.

Trend 7: 

Carbon-neutral target pushing for corporate climate ambition

We believe companies should assume the main responsibility for building a zero-carbon nation, and we expect heightened awareness of carbon reduction among companies. More companies will set net-zero targets. Facing the wave of the low-carbon transition, companies should build their capacities, carry out carbon accounting, set science-based targets, transform and upgrade their processes and technology, implement energy-saving and emission reduction projects and achieve high-quality development.

Trend 8: 

More corporate engagement in biodiversity issues

With economic growth, the focus of environmental protection in China will gradually shift from “tangible” environmental issues, such as pollution, to “intangible” environmental issues, such as climate change and natural capital. Biodiversity and natural capital will take the spotlight. Some companies have already incorporated biodiversity into their daily management and formulated measures to reduce or minimize adverse impacts on biodiversity. Moreover, more attention will be paid to the blue economy as sustainable marine development goes mainstream.

Trend 9: 

New programs advancing well-being of women and children

In 2021, the National Program for Women’s Development (2021-2030) and the National Program for Children’s Development (2021-2030) will be released and implemented, setting out the overarching requirements for the work of women and children in the next decade.

The programs add content related to families, including “women and family building” and “children and family,” which support women and family building and promote the rights of children to participate in family activities that create harmonious families. We suggest companies pay close attention to the progress and new content of the programs, and advance the well-being of women and children.

Trend 10: 

The new “dual circulation” boosting sustainable consumption

Under the new development pattern of “dual circulation,” promoting consumption, upgrading traditional consumption and cultivating new types of consumption are important measures to expand domestic demand and achieve consumption upgrades. We expect more companies to focus on the development of sustainable product life cycles to establish new competitive advantages.

Strengthen communication with consumers through cause-related marketing and advocacy activities, and guide the enhancement of consumers’ sustainable consumption concepts and behaviors. Plastic reduction will be a centerpiece of sustainable consumption. The Opinions on Further Strengthening the Treatment of Plastic Pollution states the use of disposable plastic products should be prohibited step by step and by sector.

We expect the impact of this policy on relevant sectors and companies to become more evident in 2021.