Universiteit van Amsterdam
The Rise of the South
The Race to the Bottom
Corporate Social Responsibility
Wouter Marijn Emile Bouma
11781653 Thesis Political Science: Political Economy
6/22/2018
Luc Fransen & Philip Schleifer
Abstract: This thesis has researched if the rise of emerging markets negatively affects Western standards. It has investigated to what extent Western MNCs have adjusted their CSR policies in emerging markets and has found that environmental CSR policies have been adjusted. Nevertheless, the adjusted policies have seen a positive development compared to the global CSR development, possibly indicating a California effect. To prove this, the thesis first analyzed if there has been an increase in the adoption of CSR, which is prescribed by David Vogel’s California effect. Afterwards, the California effect was weighted by analyzing if MNCs cooperate with domestic companies or governments, if there is increased consumer demand, and if EM companies focus more on Western markets. The thesis has selected China and Unilever for this research. In the end, the results of thesis suggest a California effect in emerging markets, possibly denying the race to the bottom. The thesis should be understood as a foundation for further research.
1 CONTENTS 1 Introduction ... 3 2 Theoretical Framework ... 6 2.1 Research Gap ... 6 2.2 Research Question ... 9 2.3 Theoretical Framework ... 11 3 Case Selection ... 16 3.1 China ... 16 3.2 Unilever ... 17 4 Methodology ... 20
4.1 Diachronic Content Analysis ... 20
4.2 Congruence Analysis ... 23
5 Results Content Analysis ... 28
5.1 Unilever China ... 29
5.2 Unilever Global ... 33
5.3 Outcomes ... 36
6 Results Congruence Analysis ... 39
6.1 Interviews ... 39 6.2 Document Analysis ... 43 6.3 Outcomes ... 46 7 Conclusion ... 47 7.1 Summary ... 47 7.2 Deduction ... 51 7.3 Contributions ... 55
7.4 Limitations & Future Research ... 57
7.5 Policy Implications ... 60
8 Reflection ... 61
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1 INTRODUCTION
The rise of emerging markets in Asia is beginning to encourage an economic shift, which is slowly moving the economic center of the world to the East (Economist, 2012). The rise of emerging markets (EMs) in the global South is changing the global economic landscape; but, what does this entail? What are the consequences of this shift towards the East, and why should it change anything at all?
The global North has become increasingly aware of its impact on the environment. Social standards, certification and green governance, have become essential to both consumers and producers. Not only governments but also companies, have started to engage in social solutions and policies. Especially, corporate social responsibility (CSR) has become a vital policy field for battling environmental issues. The emergence of CSR is attributed to a decreasing presence of government in the international arena (Levy & Kaplan, 2008). Due to this, private businesses and civil society groups have started to fill the gaps of national governments, to be able to resolve social issues (Scherer & Palazzo, 2011). Moreover, NGO’s have also started to target firms, instead of only national governments, which illustrates the increasing importance of companies in resolving social problems (den Hond & de Bakker, 2007). These developments have consequently paved the road for a rise of corporate social responsibility policies, which have been mostly implemented by Western MNCs in the past few decades (Scherer & Palazzo, 2011). In the end, the CSR movement has arguably been creating more sustainable products and global value chains (GVCs), which have been beneficial for the environment.
Nevertheless, the rising economic powers of the global South are changing the global economic landscape, which, according to some, could lead to lower standards and a race to the bottom (Nadvi, 2014). Not only have these emerging markets become considerable manufacturing powers, but their growing number of middle-class consumers is also increasing their overall share of global consumers (Kharas, 2010; Kaplinsky et al, 2011). In more detail, the combined middle-class of India and China will increase to 50% of the total consumer market by 2020; subsequently, decreasing the Western (European and American) share significantly (Kharas, 2010). According to Homi Kharas, “the middle class is the source of all the needed inputs for growth in a neoclassical economy—new ideas, physical capital
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accumulation and human capital accumulation” (Kharas, p.7, 2010). In other words, the growth of the middle-class consumer in Asia has created increased spending power in these countries. Therefore, these markets have become economically interesting for Western MNCs. Most of the products for the global North are produced in these emerging markets, and their growing consumer market has now also created large new end-markets (Kaplinsky et al, 2011). Emerging markets are thus evolving into consumer markets, instead of remaining producer markets. In other words, due to the increased consumer market of emerging markets, entirely new global value chains are created for these particular end-markets. These new global value chains are consequently managed by new (non-Western) MNCs, which increase domestic competition for Western MNCs in emerging markets (Smith, 2016; Tse, 2016). These new global value chains are unfortunately also less developed than the value chains controlled by Western MNCs, and some fear that their lack of standards could lead to a decrease of Western standards in general (Nadvi, 2014). An example would be the Gabon timber market in China, where the (new) Chinese middle-class consumer is avoiding ‘more expensive’ certified wood and buying uncertified timber instead; consequently, bypassing Western certification programs and harming the environment (Kaplinsky et al, 2011). As a result of the increased importance of EMs for Western MNCs, their intensifying competitive market, and the lack of social standards, certain scholars suggest that Western MNCs adjust their home CSR policies in host emerging markets (Yang & Rivers, 2009; Campbell et all, 2012; Latteman et all, 2009; Narwal & Singh, 2013; Tewari, 2011; Salazar et al, 2018; Yin & Jamali, 2016). In the end, the lack of CSR adoption by EM firms seems to enforce CSR adjustments in EMs, possibly signifying a race to the bottom. The primary aim of this thesis is to uncover to what extent Western MNCs are adjusting their sustainable corporate social responsibility (CSR) policies in emerging markets (EMs). The negative (or positive) development rate of these adjustments will then be further researched to understand the effects of the rise of the global South. The objective will be explored through the analysis of Unilever’s CSR policy development in China compared to its Global CSR policy development. Unilever is selected because it is a CSR frontrunner, which makes it an extreme case able of designating the possible consequences of the rise of emerging markets. Additionally, the Chinese market is researched. This is because it
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probably ensures CSR policy adjustments, as it has experienced an increase of domestic MNCs, is a different culture, and is a centrally governed nation.
The thesis uses a diachronic content analysis to distinguish how the CSR policy development of Unilever Global and Unilever China has improved over time. After having compared the development of CSR policies, the thesis uses a congruence analysis to understand why sustainable CSR policies have developed in this particular fashion and if the delineated theories apply to the development.
The thesis will first discuss the research gap, the research questions and the theoretical framework. In this chapter, it will become clear what question, and sub-questions, the thesis will aim to answer and why. Afterwards, in chapter three, the thesis will clarify and justify the case selection. It will discuss the cases Unilever and China and provide background information. The next chapter will clarify how the thesis aims to answer the research question. In this section, the methodology is explained in detail. The following chapter, chapter five, will list the results of the content analysis. In the sixth chapter, the thesis will delineate the interviews and analyze to what extent the research can give a theoretical explanation for the empirical observation. The seventh chapter is the conclusion. In the conclusion, the results are summarized and deduced to general observations. Afterwards, the thesis will delineate its theoretical and empirical contributions, reflect on its investigation, suggest further research, and discuss possible policy implications. In the last chapter, there will be a reflection.
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2 THEORETICAL FRAMEWORK
In this chapter, the thesis will explain why its subject is theoretically relevant, what question it will answer, and what answer it expects based on theoretical considerations. The first section explains that the rise of emerging markets is causing academic scholars to question what will happen to Western values. Moreover, this section will clarify why the economic shift to the East results in Western MNCs adjusting their CSR policies in emerging markets and what consequences this could have for environmental standards in the West. This section will also define specific concepts. The second section will delineate and justify the primary research question of this thesis and clarify its sub-research questions. Lastly, the theoretical foundation for this thesis is presented. In this section, the California effect and Delaware effect are explained, and the following hypotheses are outlined.
2.1 RESEARCH GAP
As mentioned in the introduction, CSR has become a relevant academic field of research. Private governance, the reduction of the nation-state, and increasing environmental issues have made CSR interesting and relevant. Nevertheless, CSR is a broad topic and needs clarification to be correctly understood in this thesis. For example, CSR can focus on child labor, minimum wage, clean water supply, and so on. These different definitions of CSR can be categorized in the following five dimensions: the environmental, social, economic, stakeholder and voluntariness dimension (Dahlsrud, 2006). In short, every dimension focuses on a specific aspect of CSR. For instance, the voluntariness dimension sees CSR as an action that is not prescribed by law; whereas the social dimension understands CSR as an investment in the relationship between business and society. In the case of this thesis, CSR will be considered to be in the environmental dimension, thus concentrating on policies that focus on a cleaner environment (Dahlsrud, p.4, 2006). This means that the thesis will understand CSR as the formulation of environmental concerns in business operations. Moreover, this thesis defines Western standards as environmental standards that have been formulated by Western markets over time. An example is the certification of timber. A company that implements a CSR policy concerning certified timber is thus adopting the Western standard.
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The rise of emerging markets has sparked an increasing amount of literature and, various questions about the outcome of the rise of the South have been formulated. Primary, the question surrounding our social standards is being asked more frequently by scholars (Sinkovics et al, 2014). As was elaborated in the introduction, Western MNCs have started to rely on emerging markets to a greater extent. Their increased middle-class consumer market has become a valuable target for Western MNCs, who wish to ride on a wave of improved spending power(Pels & Sheth, 2017). For this thesis, an emerging market, which can also be characterized as a rising power, is a country that is experiencing extensive economic growth, a rising middle class and is producing companies (or MNCs) that are able of competing with Western MNCs. Subsequently, emerging markets are becoming valuable markets for Western MNCs, as their presence in a growing consumer market possibly guarantees more revenue. China, Brazil and India can be considered emerging markets; due to, their economic growth and growing middle-class consumer market.
So, how will global standards be shaped if trade continues to expand to emerging markets, which have different standards? Furthermore, why are standards different in the first place? Ali, Frynas, & Mahmood argue thatemerging market firms are not yet visible enough to attach greater importance to social and environmental issues. Highly visible companies are usually prone to various pressures regarding social and environmental issues from the media, stakeholders, NGOs, and regulators. This consequently requires highly socially visible companies to incorporate such issues in their disclosure decisions to lessen those pressures (Ali et al, 2017). Their analytical study is in line with an earlier opinion from Porter van der Linde. He argues that CSR only becomes interesting for firms when they become internationally exposed, as the number of stakeholders grows (Van der Linde, 1995). Other scholars attribute the North/South divide to regulatory gaps (Goa, 2011). In the global North, governments have much more regulations in place that push companies to implement CSR policies and name and shame companies that do little on CSR. Emerging markets are much less inclined to take such measures (Gao, 2011).
A third reason why CSR is different in emerging markets is because of cultural differences. For instance, traditional philanthropy is a central aspect of Asian business culture, which concentrates less on the development of more sustainable production and more on funds to
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establish schools, hospitals and cultural institutions (Sharma, 2013). Moreover, consumers from more individualist cultures are inclined to punish companies for bad behavior; whereas, consumers from collectivist cultures tend to be more forgiving (Williams & Zinkin, 2008). Lastly, the North/South divide could be caused by consumer awareness. Because consumers in emerging countries are still unaware of issues such as climate change, home MNCs are much less inclined to formulate CSR that resolves these issues (Sharma, 2013). The reasons for the North/South divide are various but are essential, as the difference in CSR is a central element of this thesis.
Western MNCs are increasingly relying on emerging markets, and literature suggests that their home CSR policies are consequently being adjusted in host emerging markets (Yang & Rivers, 2009; Campbell et all, 2012; Latteman et all, 2009; Narwal & Singh, 2013; Tewari, 2011; Salazar et al, 2018; Yin & Jamali, 2016). First of all, certain scholars argue that different cultural backgrounds necessitate different views on CSR. As mentioned before, countries in the global South would prefer other CSR policies than the CSR policies that have been implemented in the global North (Gugler & Shi, 2009). An example is China’s collectivist values, which are based on building relationships (Guanxi) and aim for social needs in local settings; such as, building schools or homes (Kolk et al, 2015). According to Ans Kolk and Willemijn van Dolen, MNC affiliates in the global South will adapt themselves to what is more common in cultural contexts (Kolk & van Dolen, 2010). A different view is that legitimization processes of MNCs create CSR adjustments. The legitimization theory implies that the foreign MNCs will try to improve their legitimacy in the host country by implementing CSR policies that are in the interest of the host stakeholder (Zheng et al, 2015; Campbell et all, 2012). Implementing such policies will subsequently legitimize the presence of the MNC.
Another motivation for CSR adjustments is competition, as adjustments occur because companies seem to seek a positive relation between CSR and economic performance (Vasquez & Fornes, 2015; Salazar et al, 2018). According to prior research in emerging markets, CSR is mainly used as an instrumental tool by Western MNCs, as Western MNCs monitor CSR policies of local counterparts and measure the usefulness of their CSR policies by looking at the financial returns in EMs (Vasquez & Fornes, 2015). According to Porter Van
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de Linde (1995), the lack of CSR policies in emerging markets is because CSR policies only become interesting for firms when they are internationally exposed (Chapple & Moon, 2005). When firms become internationally exposed they start to compete with other firms that have higher (sustainable) standards (Salazar, 2018). Western MNCs would have reduced CSR policies to remain competitive in emerging markets, where firms have employed less costly and sustainable CSR policies, as they are not internationally active (Vasquez & Fornes, 2015).
Overall, various academic scholars have investigated why Western MNCs tend to adjust their CSR policies negatively in emerging markets. Moreover, there is clear evidence that Western MNCs adjust their global or home CSR policies in emerging markets (Yang & Rivers, 2009; Campbell et all, 2012; Latteman et all, 2009; Narwal & Singh, 2013; Tewari, 2011; Salazar et al, 2018; Yin & Jamali, 2016). Importantly, Western MNCs incorporate Western standards in their CSR policies (Dartey-Baah & Amponsah-Tawiah, 2011). An example would be the CSR policy to only import certified timber. If these CSR policies are subsequently adjusted, Western standards could deteriorate. Therefore, these adjustments have intensified the distress of a race towards the bottom. The fact that these countries have different views on environmental standards compared to the West and that economic growth is shifting power to the East, indicates that the standards set by the West could be in jeopardy (Nadvi, 2014). A project formulated by Kahlid Nadvi at the University of Manchester is aimed at researching this particular issue. Multiple scholars do not know how the rise of emerging markets will shape global standards, and some suggest that the above-mentioned characteristics will lead the degradation of Western standards, or a race to the bottom (Rising Powers and Interdependent Futures, 2013).
Therefore, the thesis aims to answer if the rise of emerging markets will lead to a race to the bottom and will do this by analyzing if the development of CSR adjustments can be attributed to theories that predict this decrease of Western standards.
2.2 RESEARCH QUESTION
Understanding to what extent adjustments of Western CSR policies occur, is vital in order to answer if the rise of emerging markets results in a race to the bottom. As such, this research
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seeks to address a core research gap within the literature related to how the recent rise of emerging markets is influencing standards formulated by the global North. The thesis will analyse the potential CSR adjustments over time, as this is necessary to say something valuable about a potential race towards the bottom. Thus, this thesis seeks to address the following central research question:
Does the rise of emerging markets lead to the reduced development of CSR policies of Western MNCs operating in emerging markets; and thus, a race to the bottom?
Related to this central question, are a number of specific sub-research questions which will be addressed within this thesis:
1: Is the development rate of CSR policies from Western MNCs in emerging markets lower than their global CSR policies?
2a: If so, to what extent can an increase in competition for Western MNCs (the Delaware effect) be credited to the researched development?
2b: If so, to what extent can the increased dependence on the emerging market (the Delaware effect) be credited to the researched development?
3a: If not, are Western MNCs creating CSR collaborations with foreign enterprises and governments (the California effect)?
3b: If not, are Chinese companies trading increasingly with Western markets (the California effect)?
3c: If not, are Chinese consumers demanding more standards and CSR (the California effect)? 4: To what extent are firms in the emerging market adopting CSR policies?
The sub-research questions outlined above should help the thesis in answering its primary question. The first question will be the most extensive empirical section of this thesis and focusses on analyzing the adjustments in emerging markets by Western MNCs. Furthermore, it uncovers to what extent the CSR development of MNC affiliates differs compared to the MNC in the global North. The second, third and fourth questions are explanatory questions and enable the research to elaborate on the possible causes of the
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empirical results; subsequently, answering the research question. Furthermore, the second and third sub-research questions also allow the research to take multiple outcomes into account. The second establishes whether competition has an adverse effect on the CSR policy development of Western MNCs in Ems. The third takes positive effects of CSR into account and tries to understand if these stimulate the positive development of CSR strategies in EMs. Importantly, the second and the third research question are based on theories with explanatory value; thus, clarifying the answer to the research question and giving an in-depth elaboration. Finally, question four answers whether or not firms from emerging markets are increasingly adopting CSR policies, which illustrates the CSR landscape of the emerging market. Moreover, the question helps to answer the research question, as understanding development of the CSR landscape could partly answer why Western MNCs are developing their adjusted CSR negatively or positively.
2.3 THEORETICAL FRAMEWORK
To be able to answer these research questions, the thesis has chosen to take a deductive approach. The thesis bases its research on a theoretical explanation that could explain if the development rate of adjusted CSR in emerging markets can be attributed to a race to the bottom.
David Vogel’s “California effect” and the “Delaware effect”, are able of giving the research the ability to create specific theoretical predictions about the rise of the global South (Genschel & Plumper, 1997; Vogel, 1995; Vogel, 1997). Importantly, and as Vogel points out, the California effect and Delaware effect should be understood as effects that function within economies of any scale (Vogel, 1995). His analysis has focused on the domestic economies of Germany and the United States, but for this thesis, the focus will be on the global economy (Vogel, 1995). In this way, the Delaware effect can be seen as the competition between companies driving their CSR policies down in a low standard environment, and the California effect as environmental standards being copied or transferred through international trade (Wells, 2002; Keay & Zhao, 2018; Carruthers &
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In more detail, the Delaware effect, which is based on the American state, is about competition pushing down standards and prices. The theory is named the Delaware effect because competition between American states for company positioning decreased protective legislation for employees (or standards); consequently, creating a race to the bottom, which was won by the state Delaware (Genschel & Plumper, 1997). A current example could be European countries reviewing bonus laws after the Brexit, as they try to obtain companies moving away from London (Treanor, 2017). For this thesis, the Delaware effect would be the result of emerging markets remaining indifferent to standards and environmental regulations, as domestic companies would have a competitive advantage over their Western counterparts because products would remain cheap to produce. Moreover, citizens of an EM would still be able to buy products inexpensively, as a slight price increase can, for instance, decrease the livelihood of the people of India, where nearly 21% of the population lives in poverty (Hucal, 2015). The Delaware effect should be seen as an effect resulting from the decision to remain or become competitive by diminishing costs for environmental CSR, instead of improving standards or increasing environmental regulation.
On the other hand, David Vogel established the California effect, which claims that regulatory competition may at times push regulations, and thus CSR adoption, upwards (Vogel, 1995). Once a rich country has adopted higher standards, foreign producers are forced to adapt, and foreign governments will possibly react by setting higher standards; subsequently, creating a race to the top. In other words, the California effect is the tendency to ratchet up standards towards levels found in highly developed countries (Perkins & Neumayer, 2010). This upwards harmonization is developed through trade, as producers in emerging markets adopt market-access regulations to be able to sell to the consumer market. Consequently, emerging market governments adopt higher environmental regulations or completely adopt these standards altogether, as it is cheaper for domestic companies to produce a single product for both markets (Bach & Newman 2007; Heyes 2009; Lazer 2001). Furthermore, the adoption of standards by EM companies could be the consequence of increased demand by consumers in emerging markets, who will also demand similar standards as found in Western markets. Trade also brings MNCs to emerging markets, which mostly originate from the West and adhere to high standards. As
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such, the MNC would advocate for higher standards in the Emerging market; because, an MNC would not be able to compete with EM firms if these do not need to adhere to any standards. Raising standards would put local competitors at a disadvantage (Vogel, 1995; Vogel, 1997, Heyes 2009; Rugman and Verbeke 1998). Overall, Vogel argues that high regulatory standards in one place of the economy will strengthen regulatory standards in other parts of the world as well. Notably, Vogel the term spillover effects, which the entire process of standard adoption through trade.
In the end, the two explanatory theories, the California effect and the Delaware effect, provide this research with a theoretical foundation on which it can formulate four hypotheses. Importantly, the hypotheses suggest that the CSR policies that have been reported by Western MNCs in emerging markets come into fruition after they have already been reported globally, which is in line with the expected adjustments found in the literature (Debroux, 2006; Zhao & Park, 2014; Yin & Jamali, 2016). In other words, CSR policies are more developed in the global North at t=0.
Graph 1.1: Hypothesis 1
H1: Delaware effect
The CSR policies of Western MNCs in emerging markets will see development; however, this development will gradually weaken.
Graph 1.2: Hypothesis 2
H2: California effect
The development rate of CSR policies of Western MNCs in emerging markets is similar to the development of their CSR policies in the global North.
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Graph 1.3: Hypothesis 3
H3: Strong California effect
CSR policies of Western MNCs in emerging markets will see increased development. The development will increase gradually and catch up with the CSR policies of the global North.
Graph 1.4: Hypothesis 4
H4: Strong Delaware effect
Western MNC CSR policy development in emerging markets is developing negatively.
NB: The lines drawn here must be seen as, illustrative models. The research is aware of the
fact that Western MNC CSR policies in the Global North can also vary and will see this variation in comparison to Western MNC CSR policies in the Emerging market.
The hypotheses outlined above predict how the empirical research could result. The first hypothesis expects that growing competition and increasing reliance on consumer markets ensures that global CSR policies will have become less important in host countries; consequently, reducing the amount of reported CSR activities. The second hypothesis expects that the development of reported CSR policies in emerging markets will be similar to the development in Western countries. The third hypothesis sees an emerging market opening to the world economy, which will warrant Western CSR in the host country catch up to its global policies. The last hypothesis expects competition to result in gradually less attention to CSR policies.
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Importantly, the thesis will primarily focus on firms, as firms will be the unit of analysis. Moreover, CSR could be considered a strategic mechanism to prevent government regulation. In other words, companies voluntarily employ CSR to prevent government interference in the form of regulation, thus remaining capable of dictating their own rules (Frynas, 2012). This choice is upheld by the fact that firms, like individuals, act rationally, which has been adopted by this thesis. Thus, firms will always conduct a cost-benefit analysis and choose a strategic and profitable option (Standish & Keen, 2011). Moreover, and as delineated by Lopez Vasquez, CSR should be seen as an instrument because companies use CSR as a strategic tool to achieve economic goals (p. 14, 2015).
In the end, this chapter has explained the research gap in the academic literature. There seems to be no concrete answer to the question to what extent CSR adjustments take place and if these adjustments lead to a race to the bottom. Furthermore, the chapter has formulated the research question and the sub-research questions. Lastly, the chapter has clarified the theoretical framework and explained how its four hypotheses are based on the Delaware and California effect.
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3 CASE SELECTION
In this chapter, the thesis will clarify and justify its case selection. First, it will explain why it has chosen the Chinese market. For this thesis, China is a compelling case because the Chinese market is a market that will most likely necessitate CSR adjustments of Western MNCs. Afterwards, the choice for Unilever is elaborated. Unilever is an extreme case because it is a CSR frontrunner, and if competition affects its CSR policies, this can give interesting generalizable insights. Notably, the thesis has chosen for a single case study, as the scope of this thesis does not permit multiple cases.
3.1 CHINA
To be able to prove that the Delaware effect or the California effect applies to the rise of emerging markets, the thesis has chosen to focus on a Western MNC that is active within an emerging market. Brazil, India and China are considered to be emerging markets for this research, as they are experiencing consumer growth and economic prosperity. However, China has been selected as a case. This is because China has a larger middle class and higher economic growth rates; subsequently, generating more domestic MNCs that are larger and more competitive than their Indian and Brazilian counterparts (Hopewell, 2015). Importantly, CSR policies are not as developed in China as in the global North; thus, ensuring less formulations of CSR policies by domestic firms (Yang & Rivers, 2009; Campbell et all, 2012; Latteman et all, 2009; Narwal & Singh, 2013; Tewari, 2011; Salazar et al, 2018; Yin & Jamali, 2016). In other words, the increased pressure of Chinese MNCs on Western MNCs has created more competition, which makes China an interesting field of analysis for this thesis, as increased competition could lead to CSR adjustments (Smith, 2016; Tse, 2016; Kindergan, 2016; Vasquez & Fornes, 2015). Furthermore, China is a centrally governed and somewhat closed economy, which would indicate that MNCs will have to legitimize themselves in China (Wilkinson, 2016). In other words, Western MNCs would have to show the government their utility. This legitimization is also an important factor that could result in CSR adjustments (Kolk & Dolen, 2010). Lastly, China’s culture ensures that it desires other CSR policies than the CSR policies that have been implemented in the global North (Gugler & Shi, 2009). Overall, China is a suitable case for this thesis, as the Chinese market has three distinct characteristics that could ensure CSR policy adjustments. Especially, the fact that
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China is centrally governed and has higher economic growth rates makes China a better candidate than Brazil and India. In other words, it is theoretically plausible that the research will come across CSR adjustments in China, making it a valuable case for this research. Nevertheless, the thesis will not only analyze the adjustments themselves. It will study the development of these adjustments and whether or not this development is negative or positive compared to the global CSR policy. If the development rate in China is negative compared to the development rate globally, this could point to the Delaware effect. In other words, that would mean that China’s increased competitiveness and Western MNC’s increased reliance on the Chinese market, is negatively affecting CSR adjustments in China. However, if these adjustments do not take place or the development rate is at least similar to the global CST development rate, this could result in another valuable conclusion; namely, that there is no race towards the bottom. Moreover, this could and prove the California effect. In the end, China is an interesting market for this particular research because it is an extreme case or an observation that takes on an extremely high or extremely low value (Gerring, 2011). This is thought-provoking, as the results could be generalizable to other emerging markets to a smaller degree.
In general, the People’s Republic of China (PRC) is a centrally governed one party-nation, with a population of 1.4 billion people (Wilkinson, 2016). China converted to communism in 1949 but has opened its economy gradually since the introduction of economic reforms in 1978. Opening its economy has led to rapid economic growth. Subsequently, China has become one of the largest economies of the world. Currently, China is developing the One Belt One Road Initiative that focusses on connectivity and cooperation between Europe and Asia; consequently, enhancing regional connectivity. The Chinese government is investing billions to build infrastructure between the regions (Tsui et al, 2017).
3.2 UNILEVER
Because China is an extreme case, which increases the probability of findings, the thesis has selected a Western MNC that would most likely see variations of its CSR policy. Moreover, if there is a race to the bottom, a company that has adopted environmental CSR in its business strategy would most probably see a reduced development rate. Therefore, the thesis has
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selected Unilever, a British-Dutch MNC, which has been developing CSR policies over the past few decades (Unilever, 2000). The company has been active in the Chinese market for a long time, and its activities in China date back to the 1920’s. The research will concentrate on Unilever’s global CSR policies and the reported CSR policies in the host emerging country (China). These will be the empirical observations of the thesis. Importantly, the Unilever case can also be considered to be an extreme case. Unilever, as a Western MNCs active in the PRC, has a particular economic interest to remain in China and has also implemented many CSR policies in the global North (Unilever, 2018). The company is considered to be a CSR frontrunner and has openly stated that it has made sustainability a core business strategy (Harvard business review, 2018). If Unilever has adjusted its Chinese CSR policies negatively over time compared to its global policies, this could indicate that other Western MNCs will have seen additional negative development. This is because Unilever has incorporated CSR in their business strategy and adjustments would be expected to be smaller compared to other MNCs, as these other MNCs rely less on CSR as a business strategy. If Unilever has adjusted its Chinese CSR policies positively compared to its Global policies, this could indicate that other companies have positively adjusted their CSR policies as well. Nevertheless, these adjustments will probably be smaller, as Unilever understands CSR as s business strategy.
In more detail, Unilever entered China again in 1986, after its absence because of the rise of the Communist regime. Unilever adopted a decentralized organizational structure to become a truly localized MNC in China. For commercial reasons, Unilever wanted to ensure that it had a local Chinese image, as consumers would react positively to this (Unilever, 2001). Since 1996 Unilever has developed its local CSR policies in China; starting with its tooth protection campaign and its Hope primary schools. In the years after, Unilever developed an increased amount of CSR policies specifically aimed at Chinese consumers. Unilever’s CSR policies date back to 1995 when the first sustainable agriculture initiative began. The initiative was aimed at developing sustainable agriculture that delivers profits, creates value for stakeholders and meets consumer needs in the future (Unilever, 2001). In the years after, the company also adopted the sustainable fish initiative and started to concentrate on water supply. In 2000, Unilever’s first social report was published, which
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analyzed the impacts that Unilever had on the environment. During the following years, Unilever further developed its core sustainability programs: fish, agriculture and water. In 2006, it adopted an eco-manufacturing policy. A landmark in Unilever’s CSR program was in 2010 when it developed its sustainable living plan and set over 50 targets. For example, the goal to source 100% of their agricultural raw materials sustainably by 2020.
Today, Unilever has a clear global goal: “to make sustainable living commonplace, as we believe this is the best long-term way for our business to grow” (Unilever, 2018). This goal has many components, which delve into various CSR commitments globally. In its core Unilever has three missions: Improving health and well-being, reducing environmental impact and enhancing livelihoods. In a recent interview with Paul Polman, the Unilever CEO argues that the sustainability agenda was brought to life during the economic crisis in 2007 and 2008 (Harvard business review, 2018). During this period, the company realized it needed to provide growth and development in a sustainable way for future generations. The central goal should be to serve society, and greed should not lead the enterprise. Importantly, the Unilever CEO understands Unilever as being a company for good (Borelli, 2017). Since his ascension as CEO in 2009, the company has seen an increased push towards sustainable business, with its sustainable living plan being an important outcome of this. Importantly, Unilever has adopted these CSR policies because it believes CSR is a good business model, not a charity (Economist, 2014).
This chapter has clarified the case selection of this thesis. First, it has discussed China and its relevance to this thesis. It is highly likely that the Chinese case will guarantee CSR adjustments, thus ensuring an interesting thesis. Secondly, the case of Unilever was clarified and its CSR centric business model explained.
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4 METHODOLOGY
In this chapter, the thesis will clarify how it will answer the research question. In short, the thesis will start to answer the first sub-research question, is the development rate of CSR policies of Western MNCs less in emerging markets compared to their global CSR policies, by conducting a content analysis of Unilever’s website data. Afterwards, and based on the conclusion of the empirical research, the thesis will use a congruence analysis to prove either the Delaware or California effect.
4.1 DIACHRONIC CONTENT ANALYSIS
First, this thesis will adopt a diachronic content case analysis, which entails that texts in certain periods in time will be analyzed. Similar to Chen’s research on CSR in China, the thesis has chosen to concentrate on data available on the Chinese and global websites from Unilever (Chen et al, 2015). The thesis will thus gather website texts and analyze these with a content analysis. Because the thesis has chosen to concentrate on Unilever’s reported sustainability policies primarily, it will not investigate its implementation or actual effects. Obviously, Unilever could implement and carry out policies without reporting them, or vice versa. Nevertheless, the thesis aims to understand whether Unilever adopts a different reporting approach in China compared to its global reporting. Importantly, the thesis would expect to see variations in the reported CSR policies because of cultural differences, varying stages of CSR development and competition. Moreover, if Unilever has become more reliant on China and competition has grown, or if China has seen increased CSR development, the thesis could see variations in the development rate based on the reported policies. Furthermore, the actual impact of the reported policies could be analyzed in further research.
After gathering the website data, the thesis will use a point system, introduced by the European Union (EU) (Audronė, 2010). The tool helps to asses to what extent reported policies can be considered to be genuinely able of impacting the environment positively and does this by analyzing the reported CSR strategy with a point system (0 points, 2 points or 4 points). Thus, the research will use a diachronic content analysis for the Chinese and global websites of Unilever. The thesis will use a system that is able of retrieving the particular
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website data from 2001 until 2016. The data will be retrieved with “the way back machine”, which is an internet database with a library of screenshots from websites.
The CSR assessment scheme introduced by the EU has five different components; namely, Governance, Environment, Labor relations, Community relations and Business environment. Because the thesis has chosen to focus on the environmental dimension of CSR, it will concentrate on the first two components: Governance, how the company generally communicates and reports CSR, and Environment, what environmental CSR policies are in place. The content analysis will thus seek to answer nine questions, all of which will be explained:
1. Does the company map out its (direct and indirect) environmental impacts, positive and negative?
This question answers if a company is aware of its environmental impact. If so, it could improve its CSR policies, as the company understands its environmental footprint and can strategize from there. This question has two answers: 0 points are awarded if the company is unable of reporting, or does not report, any of its impacts; 4 points are awarded when the company is able reporting or mentioning its environmental impacts.
2. Does the company have a CSR strategy that defines its commitments to CSR?
Question two clarifies a very fundamental question; namely, does the company have an environmental CSR strategy in place. 0 points are awarded if the enterprise has not reported any CSR strategy; 4 points are awarded if the company does clarify its CSR strategy, including its policies or goals.
3. Does the company have designated Senior personnel with clear responsibility for CSR?
This question covers an vital factor of CSR. A company should uphold business incentives to ensure good CSR performance. Senior managers must offer support for their staff in determining ways to practice CSR. 0 points are awarded if the company reports that no senior personnel is responsible for CSR; 4 points are awarded if the company reports that senior personnel is part-time or full-time responsible for company CSR strategy.
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4. Is their evidence that the company defines CSR priorities and communicates them throughout the organization?
This question is an important indicator; because, unless staff understands that CSR is a part of their job responsibilities, it is unlikely that the employees will be able of carrying out specific CSR priorities. 0 points are awarded if there is no reported communicative action; 4 points are awarded if CSR strategies are reportedly communicated on at least an annual basis.
5. Does the company have CSR policies in place to lower its environmental impact? Question five answers the most important question regarding this analysis; namely, which core CSR policies are in place and to what extent are these core policies reported. The policies will be awarded points for the following additions in the reported policy: 1 point for reporting an environmental CSR policy; 1 additional point is awarded if the reported policy contains a deadline; 1 additional point is awarded if the company has evaluated its reported policy; 1 additional point is awarded if the company has acted on its evaluation. In other words, a company has evaluated its CSR policy and keeps or changes its policy based on this evaluation. Importantly, the thesis has chosen to concentrate on the core policies of Unilever, and not charities or smaller programs countering a specific issue, as these are mostly part of a larger CSR strategy or core CSR policy.
6. Does the company adopt and maintain a monitoring system, to measure its impacts? If CSR policies are in place, but no monitoring system has been adopted, change cannot be measured, and results will not improve. If a company has a monitoring system, 4 points are awarded. If not, 0 points are awarded.
7. Is their evidence that the company has a training program in place to help employees implement its environmental policies?
This question is significant because it allows the research to find out if the company has adopted a training program. This is useful because it equips employees with knowledge to act on environmental responsibility. If the company has not adopted a training program for employees it receives 0 points; if it has adopted a training program, it receives 4 points.
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8. Can the company show a quantifiable reduction in carbon emissions to the previous year?
Question 8 indicates if the company has been successful in decreasing its carbon emissions. If carbon emissions have increased, the company is awarded 0 points. The company is awarded 4 points if carbon emissions have not increased or have been reduced.
9. Is their evidence that the company has a recycling program?
The final question indicates if the company has a recycling program. 0 points are awarded if the company does not have a recycling program; 4 points are awarded if the company does have a recycling program.
Importantly, the diachronic content analysis examines each year separately. For instance, if 2013 website data indicates that there is a recycling program and 2014 website data does not indicate that there is such a program, the research will not assume that the recycling program mentioned in 2013 is still in place in 2014. Moreover, the EU CSR self-assessment provides the research with more available answers to the questions. For instance, the question whether impacts are reported could be answered with partly for 2 points. The thesis has chosen not adopt to this approach and only concentrate on absolute answers due to reliability issues. Adopting this measurement scheme would be unreliable because it would become subjective whether an impact is reported partly.
Furthermore, the Chinese websites will be translated by a Chinese native speaker with a degree in translations, thus reducing incorrect data and inconsistencies. The sustainability reports formulated by Unilever will not be used in the thesis. This is because the reports are not annually published and do not always have Chinese or International counterparts, which makes comparing reported CSR difficult.
4.2 CONGRUENCE ANALYSIS
After investigating the development of the sustainable CSR policies of Unilever, the research will be able to conclude what hypothesis correctly depicts the investigated development. Consequently, the research will use a congruence analysis to argue that the concluded measured outcome is related to Delaware or California effect. A congruence analysis
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“focuses on drawing inferences to the relevance of theories from the (non-) congruence of concrete observations with predictions deduced from these theories” (Mills et al, 2010) In other words, is the outcome of the content analysis (the investigated CSR development) caused by increased competition and reliance of Western MNCs (Delaware effect) or the increased adoption of CSR because of partnerships, consumers and international orientation (California effect). If one of the theories can be confirmed, the thesis will be able to answer if there is a race to the bottom.
To conclude this, the research will investigate these theories, and their following characteristics, separately. The research will use interviews with NGO’s active in China, scholars and other actors. These will be able of clarifying the CSR landscape, contradict or confirm research results, and answer to what extent the California effect or the Delaware effect can be attributed to the results of the content analysis. Furthermore, the thesis will investigate news reports and other data with a document analysis, to strengthen or question the results of the interviews. By using interviews and a document analysis the research successfully uses triangulation, which is the diversification of research methods. This diversification reduces validity issues. Moreover, the interviewees are asked open questions. Consequently, the thesis imposes no perspectives. Importantly, the research will not analyze Chinese firms, as the research will encounter language barriers and, more importantly, reports that are inaccurate and obscured (Sun, 2018).
Notably, the sources of the document analysis do not specify the definition of CSR. Thus, the thesis cannot perceive the definition to be in the environmental dimension. Nevertheless, the thesis could argue that these documents define CSR in the environmental dimension to a certain extent. This is because the thesis has focused on environmental CSR in the content analysis, which studies the consequence of the potential Delaware or California effect. Therefore, the thesis can assume, if an effect applies to the results of the content analysis, that the researched documents that delineate the causes, define CSR in the environmental dimension. In other words, the Delaware effect and the California effect suggest that the development rate of adjusted CSR policies are the result of the adoption of CSR policies in an emerging market, or the lack thereof. Because the thesis has researched the consequence of the theoretical effects using the environmental dimension, the cause can be
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assumed, even if not entirely stated, to partly incorporate this dimension in its definition as well. Obviously, this is only the case if such a theoretical effect is proven.
Before researching the characteristics of the California effect and the Delaware effect, the thesis will analyze to what extent firms and governments in China have adopted CSR policies. Firm CSR and government CSR regulation will be understood as the outcome of the Delaware and California effect. Analyzing this will indicate if the California effect or the Delaware effect applies to the CSR development rate of Unilever China. For instance, if Unilever China has developed its CSR policies negatively in China compared to its global policy, this could point to a Delaware effect. If governmental regulations or Chinese CSR adoption have not increased, this would be in conformance with the Delaware effect. If the thesis proves the following characteristics of the Delaware effect, this could prove the theory. The same could be said for the California effect. If the content analysis is positive, governmental regulations and Chinese CSR have increased, and the three elements of the California effect are confirmed, this could prove California effect.
For the Delaware effect hypotheses, the thesis will investigate to what extent Unilever has experienced increasing competition by analyzing its Chinese market share over the course of the researched periods. Additionally, it will investigate to what extent Unilever is reliant on the Chinese market by investigating its overall Chinese revenue. If both competition and reliance have risen over the past decade, the thesis could be able to conclude that increased competition could have led to the stagnating development of their CSR policies, potentially proving the Delaware effect.
As for the California effect, the thesis has chosen to examine the effect by analyzing Unilever’s cooperation with domestic companies or governments, analyzing increased consumer demand, and analyzing if Chinese companies focus on Western markets. Actually, the California effect should be analyzed by investigating to what extent Chinese companies are adopting CSR policies similar to Unilever’s, thus proving spillover effects. Unfortunately, Chinese companies do not always honestly report CSR strategies (Sun, 2018).
Therefore, the thesis concentrates on three variables that could result in increased CSR adoption, and thus Unilever’s measured development rate. First, Unilever’s cooperation
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with Chinese firms and the Chinese government to develop environmental CSR policies will be analyzed. According to Vogel’s California effect, if the content analysis finds that Unilever’s affiliate in China has experienced similar or increased development compared to Unilever Global, this should mean that Chinese companies are increasingly adopting CSR policies. In other words, if the thesis finds evidence that an increased amount of Chinese companies is cooperating with Unilever, this could indicate that higher standards are thus being adopted in China, which possibly proves the California effect. Moreover, if Unilever is working with the Chinese government, it could indicate that Unilever is trying to level the playing field through regulatory pressures. Obviously, there is a theoretical possibility that Chinese companies are adjusting their CSR policies positively to Unilever’s example without there being any clear sign of partnerships. Nevertheless, this is unfortunately not empirically justifiable.
Another element of Vogel’s theory focusses on international trade and the consequent spillover effects. Chinese companies would have to adapt to Western market standards to gain access, increasing overall CSR adoption. Notably, this could result in the Chinese government implementing an increased amount of regulations, as it is cheaper for domestic companies to produce a single product for both markets (Genschel & Plumper, 1997). Lastly, Vogel argues that high standards in other areas in the economy could make domestic consumers demanding higher standards in their own country. The thesis will thus also try to answer is Chinese consumer demand for sustainable products has grown. Importantly, the thesis argues that the potential rise of adjusted CSR policies in China are the result of a race to the top. In other words, Western MNCs increase their CSR policy in emerging markets because EM firms are increasing their CSR policies (Vogel, 1995). The methodology is illustrated in the following figure.
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Figure 1: Methodology.
Overall, the thesis trusts that it has found a method that is able of researching a possible race towards the bottom or top properly, without analyzing Chinese companies in detail. Importantly, the information for the analysis for a Delaware or California effect will rely on semi-structured interviews and news reports.
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5 RESULTS CONTENT ANALYSIS
The chapter discusses the researched website which proves one of the four hypotheses. The data that was retrieved from “the way back machine” enabled the research to do a proper content analysis, which resulted in the following outcomes. Importantly, the selected website data always dated near the 31st of June, as this is precisely in the middle of the year.
The data is available upon request. The results of the assessment tool indicate that companies can come close to a maximum score, as a company would be able to score full-points on all questions except question 5. The question regarding the specificity of company CSR policies remains flexible (question 5), as there is no maximum amount of CSR policies a company can adopt. The research has also investigated the website data while using the method that includes 2-point answers. However, it found that the results of the content analysis did not significantly change, and thus used the reliable option as explained in the methodology section. Nevertheless, these other results are available upon request.
The thesis will first clarify the results of the content analysis from the Unilever China website and afterwards the results of the Unilever Global website. It will not explain every result, as this will affect the readability of the thesis. However, it will focus on specific outcomes that illustrate the process of the content analysis. Furthermore, it will explain irregularities and surprising results. Afterwards, the results will be set out in a line graph, which will illuminate what hypothesis applies to this research; subsequently, concluding a Delaware,- or California effect. Notably, this section answers the first sub-research question: Is the development rate of CSR policies from Western MNCs in emerging markets smaller than their global CSR policies?
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5.1 UNILEVER CHINA
Table 1: Assessment Unilever China.
The results of the content analysis of the website data retrieved from Unilever China are set out above. The grey areas indicate the missing data, which the research was unable of retrieving from “the way back machine”. Nevertheless, the research has generally not come across any major difficulties concerning the retrieval of website data, as “the way back machine” has kept most of Unilever China’s website data. The website interface changed three times. Between 2004 and 2005, between 2009 and 2010, and between 2015 and 2016. In some cases, this resulted in an increase in reported CSR.
Graph 2: Line Graph Unilever China; x-axis is t in years, y-axis is environmental CSR score.
Overall, the results of the assessment of Unilever China suggest an increase in the development of Unilever’s CSR policies in China over the period of 16 years. In 2001 Unilever China reported that it focused on three distinct environmental CSR policies; namely, sustainable agriculture, sustainable fisheries and water protection. However, the three CSR policies did not include any deadlines or evaluations and were only mentioned Questions: Yes No 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
1. Does the company map out its (direct and
Indirect) environmental impacts, positive and negative? 4 0 4 4 4 4 4 4 4 4 4 4 0 4 4 4 4 0
2. Does the company have a CSR strategy that defines its commitments to CSR? CSR strategy, there needs to be a CSR strategy in place: Including Policies
and Goals? 4 0 4 4 0 0 4 4 4 4 4 4 0 4 4 4 4 0
3. Does the company have a designated Senior
personnel with clear responsibility for CSR? 4 0 0 0 0 0 0 0 0 0 0 4 0 4 4 4 4 0
4. Is their evidence that the company defines CSR priorities and communicates them throughout the
organization? 4 0 0 0 0 0 0 4 4 4 4 4 0 4 4 4 4 0
5. Does the company have CSR policies in place to
lower its environmental impact? 4 0 3 3 0 0 4 4 4 4 6 7 12 14 16 16 0
6. Does the company adopt and maintain a
monitoring system, to measure its impacts? 4 0 0 0 0 0 0 0 0 0 0 0 0 4 0 4 4 0
7. Is their evidence that the company has a training program in place to help employees implement its
environmental policies? 4 0 0 0 0 0 0 0 0 0 0 4 0 4 4 0 0 0
8. Can the company show a quantifiable reduction in
carbon emissions to the previous year? 4 0 0 0 0 0 0 0 0 0 0 4 0 0 4 0 0 0
9. Is their evidence that the company has a recycling
program? 4 0 0 0 0 0 0 0 0 0 0 0 0 0 4 4 4 0 Total: 11 11 4 4 12 16 16 16 18 31 36 42 40 40 11 11 4 4 12 16 16 16 18 31 36 42 40 40 0 5 10 15 20 25 30 35 40 45 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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briefly; resulting, in a score of only 3 points. In the following year, the site and its texts did not change, which explains the similar outcome. In 2003 and 2004 there is a clear decrease in Unilever China’s reported CSR score. In both years no CSR policies are specified or mentioned. There is a reference to the impacts of Unilever’s activities on the environment; however, this is not specified. Interestingly, Unilever particularly specifies that its focus is on consumer preference, which could answer the lack of reported CSR in these years. Moreover, Unilever claims that it will remain to be a good citizen of China and that it will focus on quality goods, education and safety of its employees. Even though this can be considered as CSR; this is not CSR in the environmental dimension.
After changing the site in 2005 and adding a link to an environment & society page, Unilever China’s reported core CSR strategies increased. These now included policies to enhance environmental awareness, protect water resources, promote sustainable development and manage fisheries; which resulted in 4-point score on question 5. After 2005, Unilever China started to report that is was communicating its CSR throughout the company on at least an annual basis, which resulted in an increase in the CSR score since 2006. In following years CSR policies were not specified. For instance, Unilever mentioned its sustainable tea plan in 2007 but does not give any further information concerning the project (This sustainable tea plan was part of the sustainable agriculture policy). For this reason, the score for question 5 does not increase. In 2009, a press release mentioned Unilever China’s new CSR strategy for green packaging, which increases the score for question five. After the interface change between 2009 and 2010, there is an evident increase in the overall CSR score. This is because the new interface included more information about Unilever’s CSR strategies. As such, 4 points were awarded because Unilever reported that senior personnel was at least part-time responsible for the CSR strategy; 4 points were awarded because there was a reported communicative structure able of communicating and exchanging company CSR; 4 points were awarded because there was evidence of a training program, and another 4 points were awarded because Unilever reported a reduction of CO2 emissions. Importantly, the increased CSR score in 2010 is the result of Unilever’s sustainable living plan. The sustainable living plan formulated four core environmental CSR policies, which have subsequently been reported on the website.
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In 2012, the evaluation of Unilever’s CSR strategies was displayed on the site, resulting in a higher score. Due to increased transparency of its CSR strategies, the research was also able of rewarding points for a monitoring system and training program. Only after 2012, Unilever China started to specify its impact, instead of only mentioning an impact on the environment. In 2013, 2014 and 2015 Unilever China increased its environmental CSR strategy by reporting evaluations, deadlines and self-assessments (or strategies based on evaluations). Moreover, Unilever China started to report that it used recycling plants. Unfortunately, the research was unable to find evidence of any training programs or reduction of CO2 after 2013. Nevertheless, 2014 and 2015 scored perfectly on question 5, as the website formulated the policy, the evaluation, the deadline and an action based on the evaluation, for all four core environmental policies. The two final years seem to illustrate stagnation. This is because Unilever China was not able of providing evidence of a reduction of CO2. However, it did report the increase in CO2 emissions in those years.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 SUSTAINABLE FISHERIES 1 1 - - 1 1 1 1 1 - - - - WATER MANAGEMENT 1 1 - - 1 1 1 1 1 2 - 3 4 4 4 - WASTE AND PACKAGING - - - 1 2 - 3 3 4 4 - SUSTAINABLE AGRICULTURE 1 1 - - 1 1 1 1 2 2 - 3 3 4 4 - CLIMATE CHANGE / GREENHOUSE GASES - - - - 1 1 1 1 1 1 - 3 4 4 4 - TOTAL (Q5) 3 3 - - 4 4 4 4 6 7 - 12 14 16 16 -
Table 2: Question 5 assessment of Unilever China.
In table 2 the results of the assessment for question 5 are delineated. As mentioned in the methodology section, one point is awarded for every policy mentioned, and policies receive additional points for including an evaluation, deadline or action based on its evaluation. In 2003 and 2004 there were no mentions of any CSR policies. Until 2012, further information surrounding CSR policies was absent. The CSR policies between 2001 and 2011 have only been awarded one point because the Chinese website only mentioned the policies.
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However, since 2012 the core four policies have been explained in more detail. Subsequently, these years have received a higher score. Importantly, Unilever China has scored perfectly in the last two years. This perfect score indicates that the reporting of CSR policies has positively developed over time.
Graph 3: Development Unilever China with a linear line; x-axis is t in years, y-axis is environmental CSR score. As illustrated by the line graph above, there is a positive development of the reported CSR policies of Unilever China. Especially after 2009, there is a sharp rise in the CSR score. Adding a linear line as the graph illustrates this positive development. On the basis of this linear line, the thesis could argue that this positive development of reported CSR will continue. The CSR scores have, exempting two occasions, always risen or remained the same compared to the year before. Overall the CSR assessment for Unilever China illustrates a positive development. 0 5 10 15 20 25 30 35 40 45 50 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Unilever China reported CSR policies Linear (Unilever China reported CSR policies )
