Newsletters
Corporations And Stakeholders
June 2010, Volume 6, Number 4
In This Issue:
- Feature Article: Chinese consumers: the environment's sleeping dragon? by Pua Mench, Manager, Stakeholder Engagement - Asia, The Future 500
- Future 500 Mid-Year Report: Positive Trends for Cross-Sectoral Engagement
- Future 500 News:
- New Team Member: Pua Mench
- New Senior Fellow: Rich McIntyre
- New Senior Fellow: Bonnie Nixon
- Support Us Via Amazon.com
- Future 500 Global: Update from our Tokyo office
- Future 500 Blog: Will Afghanistan’s mineral wealth result in the world’s next Conflict Mineral scenario?
- Coming Events: San Francisco; Stockholm, Sweden
- Donate to The Future 500
- Previously Featured Articles
- Follow Us on Twitter, Find Us on Facebook!
Feature Article
Chinese consumers: the environment’s sleeping dragon?
by
Pua Mench
"Severe toxic spill cases! Foggy and hazy weather in cities! Lead poisoning in children! In the face of these careless corporations do you often feel angry, but helpless?" The Green Choice Initiative (GCI), an alliance of 34 Chinese NGOs, posed this query to consumers this year as part of their Green Choice Consumer Action (GCCA) campaign. GCCA's first online consumer report, issued February 3, 2010, named twenty polluting companies, including such well-known brands as Carlsberg, Hitachi, Phillips and Motorola, and appealed to consumers to consider the track record of brands when making day-to-day purchases.
"This campaign is just beginning to let the public know that many brand name products damage the environment," said Wang Yongchen of the Beijing-based Green Earth Volunteers during a May 2010 interview with CNN. "We shouldn't be living a polluted life because of uninformed choices. Our goal, our hope is to take them off the market."
Chinese consumers have every reason to think twice about purchasing goods produced through processes that contribute to pollution. A whopping 70% of Chinese rivers and lakes are polluted to a level that poses significant public health risks. According to OECD estimates, hundreds of millions of Chinese are drinking water contaminated by pollutants such as arsenic or toxins from untreated wastewater, agricultural chemicals and leeching landfill waste3. Along major rivers and large lakes in China, communities suffer from higher than normal rates of cancer, tumors and maternal health issues4.
And the public is taking note. A February 2010 report by Responsible Research revealed that riots and anti-pollution protests have been increasing by one third every year5. The largest reported protest to date occurred in Spring 2005 and drew an estimated 30,000 to 40,000 villagers, who stormed a chemical park in Dongyang after four years of government inaction in the face of birth defects and crop failures linked to water contamination stemming from local chemical factories.
Chinese environmental NGOs' efforts to capitalize on consumer ire, and ultimately purchasing power, translate into reputational risks for major brands. Multinationals (MNCs) operating in China with complex supply chains are especially at risk from green consumer campaigns, as they represent the "top of the food chain" and are perceived by NGOs as a viable conduit for influencing the behavior of polluting suppliers. But those companies who do engage with NGO stakeholders stand to gain a competitive edge over those who maintain the status quo.
And the Chinese public is no stranger to wielding its purchasing power out of principle.
Xiu Min Li, China Program Director for Pacific Environment, says there is enormous potential to using the consumer leverage of China's growing middle class and points to the widespread boycott of popular French brands in 2008, over issues of cultural sensitivity. In April 2008, a call was issued on Tianya-the largest Chinese-language Internet bulletin board (BBS), with over 80 million registered users-to boycott French brands fast becoming household names in China's consumer class6. Thousands protested in front of Carrefour stores in a number of major cities, and even took over checkout counters, blocked store entrance and heckled shoppers. A few days into the protest newspapers reported that Carrefour was returning unsold stock to suppliers, contractually obliged to take it back.
According to an article published in the Journal of Multidisciplinary International Studies, "The Carrefour boycott achieved the largest scale, by far the highest visibility, and perhaps the most success of any such initiative in China in recent years, but it was typical of a growing number of boycott appeals. It targeted products associated with middle-class consumption."7
So far the most powerful boycotts to date have largely focused on issues relating to nationalism, rather than the environment.
It remains to be seen if the purchasing power of China's growing middle class, fueled by fierce patriotism, can also be fueled by environmental awareness.
Xiu Min Li says, "Asking whether Chinese people are capable of being 'green' consumers is the wrong question. Rather, when educated and presented with the right choices, it's just a matter of when the Chinese public become green consumers."
There is evidence to support Li's claims. For example, in response to GCCA's first online consumer report, one blogger wrote, "We shouldn't buy products from these companies. We should choose other green brands. That way we actually contribute to pollution control in China."8
A brand survey done by Landor Associates found that China's consumers are more concerned about green issues than U.S. or European consumers. Forty five percent of those surveyed in China said they consider it very important that a company is green when considering which brands to purchase, compared to 23 percent in the United States.9
Some believe it will take time for green consumer choices to take hold. "Consumers are still in the early stages of understanding this. My feeling is that most consumers are trying to buy cheap rather than buy responsible. That's the reality because many people survive on a very low salary," says Dr. Guo Peiyuan, director and founder of the Beijing-based SynTao consulting company. "But people do care," he adds.
Peiyuan argues consumer attention is more focused when the connection is made between current issues and their impact on future generations, such as food and toy safety. If consumers are educated to the point of connecting the dots between polluting practices and subsequent health impacts, they may be further incentivized to endorse boycotts. Some NGOs, including Greenpeace and those belonging to GCI, are shedding light on this connection, through activities like analyzing water and soil content near factories for hazardous chemicals10 and moving up the supply chain, from polluting suppliers linked to poisoning incidents to major brands.
A recent investigation into heavy metal poisonings in the supply chains of global IT brands conducted by GCI and widely reported on by Chinese and international media exemplifies such trends. NGOs are pointing fingers at such well-known brands as Vodafone and BT, among others, and tracing their supply chains back to Shanghang Huaqiang Battery - which was implicated in the high profile lead poisoning of 121 children in Fujian province last year.11
NGOs are appealing to MNCs to do their part in reigning in polluting suppliers. "I hope British companies like Vodafone and BT, known for their environmental commitment, will take the lead in greening the globalised manufacturing and sourcing. Not only is it essential in fulfilling their own environmental commitment, but it will be the single biggest help they could make in pollution control efforts in China and other developing countries," Ma Jun, director of the Institute of Public and Environmental Affairs and a key author of the NGO report, said recently.12
Ma Jun has long advocated for MNCs to take the lead in greening globalized manufacturing and sourcing.
"When major companies, sourcing in developing countries, care only about price and quality, local suppliers will be compelled to cut corners on environmental standards to win contracts. Such market practice is destructive, leading to a globalised 'race down to the bottom,'" says Jun.13 The GCCA campaign, spearheaded by Jun's organization, is banking on the power of 1.3 billion people to grab the attention of major brands to stop that from happening.
And many, like Pacific Environment's Xiu Min Li, think it's not a matter of if green consumerism takes hold in China but a matter of when.
1 http://en.ipe.org.cn/uploadFiles/2010-02/1265964456600.pdf
2 http://www.cnn.com/2010/WORLD/asiapcf/05/03/china.green.awakening/index.html
3 Organization for Economic Cooperation and Development (OECD), "Environmental Performance Review of China," Paris, France, July 2007.
4 Economy, Elizabeth C., "The River Runs Black: The Environmental Challenges To China's Future," Ithaca: Cornell University Press, 2004.
5 Responsible Research, "China Water: Issues for Responsible Investors," February 2010.
6 http://epress.lib.uts.edu.au/ojs/index.php/portal/article/viewArticle/936
7 http://epress.lib.uts.edu.au/ojs/index.php/portal/article/viewArticle/936
8 http://www.cnn.com/2010/WORLD/asiapcf/05/03/china.green.awakening/index.html
9 http://www.cnn.com/2010/WORLD/asiapcf/05/03/china.green.awakening/index.html
10Greenpeace, "Poisoning the Pearl: an investigation into industrial water pollution in the Pearl River Delta," October 2009.
11http://www.guardian.co.uk/environment/2010/may/06/global-it-brands-china-pollution
12http://www.guardian.co.uk/environment/2010/may/06/global-it-brands-china-pollution
13http://www.guardian.co.uk/commentisfree/cif-green/2009/may/19/china-emissions-industry-green
Future 500 Mid Year Report
Positive Trends for Cross-Sectoral Engagement
As the economy turns around, we are seeing companies commit growing resources and funders increasing support for NGOs working on sustainability initiatives. The result is rising interest from companies and NGOs in our approach for cultivating cross-sectoral networks that align around common principles to advance systemic solutions to sustainability challenges. We see several factors driving this positive trend in our four program areas.
Climate: While passage of U.S. climate policy or an international agreement progresses in fits and starts, stakeholders from the business and NGO communities are collaborating to progress numerous efforts to establish a price on carbon regardless of national or international agreement to assure acceleration of climate mitigation -- through increased regulation of carbon via the EPA, increased fees on carbon intensive energy, and subsidy removal.
Water Stewardship: Policy makers and community advocates across the globe increasingly appreciate the inter-relationship of energy use to use clean water availability. So we are seeing increasing alignment among climate change, water, security, and community advocates working to increase efficiency of water use in the agricultural sector through dismantling of subsidies, establishment of procurement specifications, and toxics use reduction.
Labor & Transparency: The impending release of the Ruggie framework, which will provide clearer expectations of corporate behavior on human rights, will disproportionally impact multi-national corporate brands. Hence, we see corporations and NGOs gearing up for this to assure timely institutionalization of the Ruggie framework into corporate operations.
Recycling and Product Stewardship: There is a growing push to establish EPR policies in various states, modeled after approaches in the EU and Canada, to increase materials re-use and waste diversion as well as reduce carbon emissions and toxins in products. Complementing these EPR initiatives is growing stakeholder focus on increasing regulation of toxins. First, in response to significant corporate and NGO input, EPA proposed adding 16 chemicals to the TRI. A network of corp-NGO coalitions, including the American Sustainable Business Council and Safer Chemicals Healthy Family Coalition are working aggressively to reform TOSCA and other national policies regulating chemical use in the U.S. William Mcdonough and Michael Braungart released their cradle-to-cradle design into the public domain to accelerate adoption of green design.
Across all our programs, we are advancing the power of the ICT sector to dramatically improve energy efficiency, foster transparency in the supply chain, open up closed societies, and provide better means to insure a chance for prosperity to those in the developing world.
We are excited about the impact these trends are having on our four program areas, and are gearing up to mange this increased interest in and validation of our unique approach to stakeholder engagement and cross-sectoral coalition building.
Many thanks to our fabulous and growing team and our financial supporters for helping advance our work.
Erik Wohlgemuth
Chief Operating Officer, Future 500
Future 500 News
- New Team Member
Future 500 is delighted to welcome Pua Mench to our team as Stakeholder Engagement Manager for Asia. From her base in Hong Kong, Pua will be focusing on stakeholder issues related to corporate responsibility and sustainability in China. Pua has written for High Country News, prepared local reports for the World Wide Fund for Nature, and engaged with community and government on sensitive environmental issues for the Hawaiian-Environmental Alliance. In 2008 Pua helped build the energy and climate change component of the Clinton Global Initiative Asia's first meeting, under former White House staffer Nancy Bowen and RARE Conservation vice president Nigel Sizer. - New Senior Fellow
To support our Water Program, we are pleased Rich McIntyre has joined our team as a Senior Advisor. Rich advises numerous conservation and citizen organizations on natural resource and political issues, and is well known in the field of natural resource politics and advocacy, water issues, political communications, campaign management, and ecosystem restoration. Rich recently developed a coalition of agricultural interests and environmental organizations to forward a fundamental change to Idaho water law, allowing water to be kept in-stream for fish and wildlife purposes, resulting in the first unanimous passage of Idaho environmental legislation. He has consulted with numerous water stakeholders - conservation organizations, industry groups and companies, foundations and governmental agencies on environmental, planning and political issues, in the United States and overseas (most recently in Queensland, Australia and the Bahamas). - New Senior Fellow
We are pleased to announce Bonnie Nixon has joined the Future 500 team as a Senior Fellow. Bonnie, a Resident Scholar at Stanford University & Executive faculty at Presidio’s Sustainability MBA, brings 25 years of experience as a strategic expert in social and environmental sustainability for corporations, complex supply chains, government and communities. She led HP’s Environmental Sustainability program for the last two years, building on 10 years at the helm of the company’s Ethical Sourcing program. She helped drive the formation of a common industry code of conduct and processes as one of the founders and Board Members of the Electronic Industry Citizenship Coalition (EICC). Bonnie was named one of Sustainable Industries “20 Leading Green Executives in 2008” and “one of 10 nationwide women making strides in sustainability” in the Green Economy Post. - Support Us via Amazon.com:
We have joined Amazon.com's affiliate program so consider routing your purchases through this link to generate referral fee donations of 4%+ for Future 500.
Future 500 Global
Focusing on businesses responsible for the greatest job creation in Japan, Future 500 Japan has mobilized over 160 small to mid-size businesses to mitigate their climate impacts and advance progressive climate policy, products and services. In association with partner E-Square, Future 500 Japan works to provide low cost-high-value programs targeting bottom of the pyramid communities to help lift themselves out of poverty. Future 500 US and Japan work to harmonize across geographies, building multi-national coalitions to accelerate positive change in our four issue areas - climate, water, recycling and labor and transparency.
Future 500 Blog
Future 500's team of subject area experts are contributing to the conversations over at the Future 500 blog, discussing stakeholder engagement issues related to Climate & Environment, Recycling & Product Stewardship, Water and Labor & Transparency.
In this month’s featured topic, Senior Director Juliette Terzieff, examines Avoiding a Repeat Performance – Will Afghanistan’s mineral wealth result in the world’s next Conflict Mineral scenario?
Coming Events
CAPCOA Climate Change Forum
August 30 - 31, 2010, San Francisco, CA
The California Air Pollution Control Officers Association (CAPCOA) forum is an opportunity to examine ways to harmonize the climate programs of federal, state and local government agencies. The California Air Resources Board and U.S. Environmental Protection Agency are co-sponsoring the event, which features speakers including Huffington Post founder Arianna Huffington, EPA Administrator Lisa Jackson and Alec Loorz, founder of Kids vs. Climate Change.
World Water Week
September 5 - 11, 2010, Stockholm, Sweden
World Water week is an annual multi-stakeholder gathering of international importance, drawing in government, academic, activist, SRI and corporate stakeholders for seven days of meetings and side events. This year’s program -- focused on the theme: “The Water Quality Challenge” – is the second in a broader 2009-2012 “Responding to Global Challenges” program.
Donate to The Future 500
Support The Future 500's programs by making a tax deductible donation today.
Previously Featured Articles
Climate Legislation to Transform the U.S. by Scott Smithline, Director of Global Stakeholder Initiatives - Climate, and Danna Moore, Director of Stakeholder Campaigns, The Future 500
For the last three years, federal climate policy has been dominated by the cap and trade approach. READ FULL ARTICLE
H2O: Lots on Tap by Matt Turner, Director of Global Stakeholder Initiatives - Water, Future 500
There is broad consensus among stakeholders –governmental officials, academics, NGOs, foundations, socially responsible investment groups and business – that water is likely the next “dominant big issue” of the 21st century. ... READ FULL ARTICLE
The Power of ICT to Change the Future by Juliette Terzieff, Senior Director Global Stakeholder Initiatives, Future 500
When electoral authorities declared Iran’s incumbent Mahmoud Ahmedinejad winner of June 2009 presidential elections the power of technology became front page news around the world... READ FULL ARTICLE
Climate Solutions Must Be Real, Not Just Perceived by Bill Shireman, President & CEO, Future 500
As Congress moves to enact the nation’s first comprehensive climate protection law, economist
Paul Krugman asks that advocates not make “the perfect the enemy of the good.” ... READ FULL ARTICLE
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