Chinese companies building overseas should adopt voluntary sustainability standards to boost their image and drive low-carbon development

In the Chinese market, voluntary sustainability standards, particularly for food, are increasingly being applied by global companies like Starbucks and Mars. However the majority of Chinese companies rarely use, or are unaware of, these standards, despite their potential to generate commercial, environmental and social rewards and help the country set the rules for a greener global economy. Similarly, most Chinese consumers seem to have little awareness of the application, let alone the significance, of such standards, compared to those in some European Countries.

As the Chinese government has committed to deepening domestic reforms by giving more weight to market mechanisms and more Chinese state-owned and private companies are encouraged to go abroad under the “One Belt and One Road” initiative, voluntary sustainability standards will safeguard China’s national image and overseas reputation as a responsible power.

Why standards matter

Sustainability standards, which set best practice in an industry, can be effective tools for verifying socially and environmentally friendly goods and services along global supply chains – such as for forest products or fisheries. Most voluntary standards, such as those of the Rainforest Alliance, UTZ and Forest Stewardship Council (FSC), have been set up by private multi-stakeholder initiatives or large companies with global membership to attract high-value market segments and respond to ethical concerns. Nowadays, they have become de facto mandatory standards in a commercial sense as they are driven largely by consumer demand.

As an emerging power, China has set out to adopt voluntary sustainability standards at its own pace. The country has increasingly realised the role of voluntary sustainability standards as essential elements of competitiveness, corporate social responsibility and new modes of low-carbon, resource-light prosperity.

Despite its lack of experience, China’s involvement in the sustainability certification process can contribute to the transformation of the global economy. The implementation of the United Nations (UN) 2030 Agenda has offered China an unprecedented chance to shape social and environmental standards. This process proposes to revitalise the global partnership for sustainable development, which requires joint action from public and private stakeholders in the global North and emerging countries in the South.

Against this backdrop, Chinese government and business leaders, working with domestic and international NGOs could explore meaningful ways to develop voluntary sustainability standards that are suitable to national circumstances and have international implications. The Sustainable Development Goals (SDGs) will be harder to achieve without China’s proactive participation in numerous aspects including the formulation of sustainability standards.

Huge opportunities have emerged at the domestic level. China’s booming market with rising demands from high-end consumers for quality food and other commodities calls for certification and traceability services. Although several governmental departments such as Ministry of Industry and Information Technology (MIIT) and National Development and Reform Commission (NDRC) have issued official guidelines for green procurement and consumption, there is a lack of action plans to put these into practice, which leaves some room for international voluntary sustainability standards to fill in the gap. Given China’s centralised political culture and authoritative traditions, voluntary sustainability standards will be more convincing for consumers and businesses if relevant international organisations get endorsement from the government.

Read the full article: https://www.chinadialogue.net/article/show/single/en/9272-Chinese-companies-need-code-of-conduct-overseas?mc_cid=eb6457a17d&mc_eid=c1c40b3292