China Southern Power Grid’s 2007 “Corporate Social Responsibility Report”

by China Southern Power Grid

China Southern Power Grid (CSG) issued its first Corporate Social Responsibility (CSR) report in 2007. The report meets the basic requirements of China’s “Guidelines for Fulfilling Social Responsibilities for State-owned Enterprises” issued in January, 2008 and in reference to international rules. The report describes the company's corporate responsibility as a function of five components of its operations:  power supply security, economic responsibility, environmental responsibility, social responsibility and future outlook. Environmental responsibility is defined as implementation of national industrial policy, development of renewable energy, activation of green operations, energy-saving power scheduling, reduction of wear and tear on power grids, and use of new technology to save resources. Social responsibility is defined as rural power grid construction, donating to charities, working with partners, and staff development efforts.

Report highlights:

The report reflects the fact that CSG is beginning to integrate the concept of CSR into its corporate strategy and business management practices. The report mentions a few concrete steps the company has taken, including installation of a security mechanism for managing the power supply in case of an emergency or disaster, and the introduction of new technology and renewable energy generation to decrease carbon dioxide emissions within a three-year time period.

Report shortcomings:

Over half of the report focuses on the security of power supply and the company’s financial strength. Although these elements may be part of corporate social responsibility, CSG should not make its profitability a sign of its social responsibility. The safety of grid operations and customer service are part of the company’s key functions, but do not fulfill the company’s social responsibility.

CSG’s main business activities str transmission and distribution of power from large, coal-fired electricity generators and other power operations both at home and in Southeast Asian countries, and its operations take a tremendous toll on the environment. But the report does not mention whether or not the company has internal environmental policies. Many environmental indicators such as emissions of carbon dioxide, Environmental Impact Assessment processes, and biodiversity conservation measures were not disclosed.

The report suggests increasing transmissions from wind power, nuclear energy, and particularly hydropower are key components of the company’s green energy strategy. But the environmental impact caused by domestic or overseas hydropower projects is not mentioned, nor are resettlement issues or the many other social impacts of these projects.

In short, there are many inadequacies in CSG’s first corporate social responsibility report, the main issue being that the good corporate governance is taken as a sign of good corporate social responsibility.