Have Chinese Companies Finally Joined The Sustainability Bandwagon?

Investments Apr 21, 2018
Nicole Wu

21 April 2018 |  Forty years ago, China’s once-vast forests were on the brink of extinction, but then the country stopped chopping trees and started planting them – a staggering 66 billion of them since 1978.

This year alone, it will plant enough trees to cover all of Ireland.

Critics, however, say companies have merely “exported” their deforestation by purchasing massive amounts of timber, soybeans, and palm oil from areas where deforestation is rife – undermining efforts to slow deforestation by promoting sustainable sourcing of raw materials. Indeed, experts universally agree that, to slow deforestation, Chinese companies must increase demand for sustainably-harvested products.

Fortunately, there’s evidence that’s happening.

Over the past decade, some of China’s largest companies have enacted “Corporate Social Responsibility” strategies that have made Chinese consumers more aware of the impact their purchases have on the environment of countries far away. As a result, the country’s growing middle class has begun to develop an appetite for environmentally-friendly products.

What’s Going on in China?

Chinese companies are beginning to establish initiatives for action against global deforestation. Some are collaborating to unite the largest industries in China against deforestation, in efforts such as the China Meat Association and China Soybean Industry Association. Members of these associations are sharing clean technologies and creating new standards to promote sustainability in the industry at large.

These associations are encouraging companies to make commitments.

For example, the China Solid Wood Flooring Alliance, an association  established cooperatively by 19 leading solid wood flooring companies in China, announced the Forest Declaration in July 2016. This declaration is a commitment to “eliminate and avoid illegal and controversial sources of raw materials and timber by 100% in the enterprise supply chain, and develop appropriate action plans to introduce tracking and transparency mechanisms of product sourcing”.

These alliances have inspired other organizations to get involved, too.

Notably, some international organizations , such as WWF China, have already begun to engage with Chinese companies in their deforestation efforts. In fact, WWF China has been one of the most important promoters of sustainable supply chains since 2010. They’ve identified unsustainable logging and pulp plantations as major sources of deforestation risk and, in 2015, established the China Sustainable Paper Alliance (CSPA). They’ve been actively involved with companies and offer workshops to help  green supply chains.

Is China up for the Challenge?

While these CSR efforts are promising, there is still a lot more that needs to be done. One of the biggest challenges is enhancing media and information exposure to will get consumers on board with anti-deforestation action. Currently, most information about new company actions is detailed in small news feeds and corporate websites that are not readily accessible to Chinese consumers. Gaining consumer support is the next step is bringing deforestation into the conversation.

And while support for measures against deforestation is growing in big companies, small enterprises still maintain relatively untraceable business practices. Engaging small and medium-sized enterprises, encouraging deforestation commitments, and providing accessible education about sustainable supply chains is necessary for decreasing China’s global impact.  In the long term, deforestation is becoming a part of the corporate conversation, but this conversation has only just begun.