The SZSE document lists recommendations for companies to become model businesses. There are 540 companies listed on the Shenzhen Stock Exchange, with some 35 million registered investors and a market capitalisation of around RMB 1 trillion ($124 billion). The importance of these new CSR guidelines could therefore be significant.
The SZSE instructing document includes general principles, such as that companies should be accountable to their stakeholders (shareholders, customers, employees etc) and that they should promote transparency. The report also makes specific reference to labour issues: there should be no forced labour or discrimination of any sort, and overtime, social security and annual leave should be paid.
The stock exchange is also keen to promote better environmental practice and suggests that companies should monitor their impact in that field, as well as on CSR issues. This notion of accountability and self-assessment is rather ground-breaking in China, as it puts the onus on companies to ensure that their name is clean rather than wait for whistle blowers to highlight matters that leave to be desired.
It will obviously take time for companies to take the SZSE’s recommendations on board. At this stage, the instructing document is not legally binding either, which means that it is up to companies to comply or not. The likelihood however is that most listed companies will make an effort since it is in their interest too to show willing with the authorities.
The instruction document is open for comment until June 16, after which the SZSE will finalise its recommendations.
Source: Shenzhen stock exchange instruction on CSR
CSR-Asia Weekly Vol 2 Week 24
Review by Emilie Filou