The Sichuan Earthquake and the Changing Landscape of CSR in China
This massive earthquake, measuring 7.9 on the Richter scale, not only left 70,000 people dead and five million homeless, but also forever changed the landscape of CSR in China. The scale and timeliness of aid response by both domestic and multi-national corporations crafted Chinese attitudes towards companies to an unexpected degree. Firms doing business in China can learn from the public’s reaction following the disaster, and can incorporate tailored CSR principles into their core strategy for the Chinese market.
In the days and weeks following the Sichuan earthquake, many MNCs pursued a global CSR policy in line with their international standard. While some multinationals pledged cash, many others pledged a combination of cash, equipment and services. Domestic firms, by all accounts, out-donated multinationals. By May 20, Chinese companies had donated more than US$645 million in cash and goods. The popular perception was that international firms’ relief contributions not only did not match those of local Chinese companies in terms of scale or timeliness, but also were not commensurate with their presence in the Chinese market. Chinese consumers quickly seized upon this disparity by openly attacking major MNCs, calling for a boycott of their products and publicly condemning companies that donated too little. For multinational companies used to operating under a global CSR framework, the ensuing consumer backlash came as a shock.