Weihua Ma: Doing Well and Doing Good is the Tide of the Times
On November 12th, 2021, Weihua Ma, Executive Chairman of CASVI, accepted the exclusive interview with Southern Daily on corporate social responsibility and sustainable development. The following is a special report on corporate social responsibility practice in Shenzhen by Southern Daily.
In August this year, the Central Government made a strategic plan to promote common prosperity and launched a series of approaches and initiatives to promote common prosperity. Under the new historical background, what should entrepreneurs do as an important group generating social and economic wealth? How should enterprises in Shenzhen promote common prosperity? As a forefront for reform and opening-up, Shenzhen is currently in the critical era for “dual districts” construction: so how should enterprises in Shenzhen implement CSR in the future in an innovative way?
In a recent interview with Southern Daily, Weihua Ma, Chairman of UNDP China SDGs Impact Financing Advisory Committee, Executive Chairman of CASVI, and the Former President of China Merchants Bank, pointed out that "promoting common prosperity in high-quality development" means greater social responsibility for entrepreneurs. Firstly, enterprises should make the wealth cake bigger. Secondly, enterprises can pay back to the society, through the third distribution, such as public welfare activity and charity donation. He stressed that business for good has become the trend of the times. Therefore, entrepreneurs should have a strong sense of social responsibility and mission, take helping social development as their own duty, go beyond the profit-first mindset, adhere to the “Doing Well and Doing Good” mission, pay attention to the consistency of economic and social benefits, and finally integrate the concept of sustainable development into enterprise management.
On Common Prosperity:
Common prosperity is the symbol of the essence of the Socialist Modernization
What’s your understanding of common prosperity and how to interpret “promoting common prosperity in high-quality development”?
Common prosperity is the symbol of the essence of socialist modernization, and it means the materials and spiritual well-being of all the people, not just a few. The premise of common prosperity is to ensure the social wealth, in other words, the “cake” is big enough. Take China as an example, although China's per capita GDP has exceeded 10,000 USD, it is still far from the average of developed countries. Development remains the key to solving all problems. Therefore, common prosperity will be impossible without high-quality development.
Since wealth is the material basis of common prosperity, China still needs to make the “cake” bigger first. The gap between the rich and the poor reminds us that we should not only pursue efficiency, but also pay attention to fairness, and work together in the ESG fields. Certainly, it can not be achieved overnight. The progress takes different stages in 100 years.
What does "promoting common prosperity in high-quality development" mean for Shenzhen enterprises? Does it signal any new goals and requirements?
It means greater social responsibility for enterprises. Firstly, adhering to the new development concept, enterprises should take the responsibility and make the wealth “cake” bigger. Meanwhile, high quality development requires enterprises to improve the quality of development through innovation in various fields, such as entrepreneurship, scientific and technological system innovation, and management fields. If we maintain a development growth rate, China’s per capita GDP will close to 23,000 USD by 2035. By then we can enter the ranks of moderately developed countries.
Secondly, entrepreneurs should carry forward Mengzi’s spirit of "preserve your dignity as a nobody; promote the social welfare as a somebody." That means, entrepreneurs should enhance their sense of responsibility to serve the society, actively participate in the third distribution, and devote themselves to public welfare. At present, the portion of entrepreneurs doing public welfare charity in China is far lower than that in developed countries. In 2018, donations from mainland China accounted for only 0.16% of GDP. In comparison, same type of donations from the developed countries is over 1% of GDP, and individual donations from the US is accounted for more than 2% of GDP. Clearly, there is still a lot of room for development in China's third distribution mechanism.
Thirdly, it means entrepreneurs should adhere to the value of “Doing Well and Doing Good,” pay attention to the consistency of economic and social benefits in economic activities, practice the UN sustainable development strategies, and finally achieve the well-being and interests of the vast majority of people.
How do you interpret that enterprises achieve sustainable development through public welfare?
While talking about corporate social responsibility now, we are not only referring it to the traditional donation, but also referring it to the enterprise's "innovation for the good,” which means using business model, financial means, science and technology to solve social problems and achieve the goal of sustainable development. This should be the greatest public welfare. Simply relying on donations and government investment can not solve these problems. Besides, many social and environmental problems are generated in economic activities. If every enterprise sticks to the concept of sustainable development, minimizes the governance cost in practice, and every investment decision considers economic benefits and social value, such a business model ought to be the fundamental force for solving social problems and achieving sustainable development.
On the Impact of the Pandemic:
The development model of draining the pond to get all the fish has received unprecedented reflection
Is there any special significance to advocate sustainable development during the pandemic?
The COVID-19 in 2020 brought a profound reflection to mankind. According to the UN report, 71 million people returned to poverty last year, and about 90% of students could not attend classes normally. Nearly half of the world's labor force, about 1.6 billion people, worked in the informal economy. Their work was affected and their income decreased by 60%. But we also see that after this sudden outbreak of the pandemic, although the world economy has reached the darkest times, human's reflection on sustainable development has been deeper.
Last year, I carefully studied the relationship between the pandemic and human society, and found that human society goes hand in hand with the epidemic through out the history. However, it is noticeable that the outbreak frequency of plague has accelerated significantly after industrialization. The world experienced 20 global public health crises in the past 80 years, while 8 just happened in the past 10 years.
What is the cause? According to the data from the UN, the past 10 years have been the hottest 10 years in the last century. 2016, 2019 and 2020 all reached the highest temperature ever recorded by mankind. Last February, the highest temperature in Antarctica even reached 18.3 ℃. Why epidemic outbreaks such frequent? It undoubtedly correlated with climate warming. Climate change not only brings plague, but also lead to many problems that threaten human health and well-being. The inducement of climate warming is inseparable from the development mode of fishing for all in the past and the pursuit of GDP without considering the environment, which has brought great problems and troubles to mankind.
COVID-19 brings lessons to mankind, and let the human beings reflect on the past development model of draining the pond. Only the way in awe of nature and the transformation of development can actually protect our common homeland. Many entrepreneurs have stated that they should bid farewell to the supremacy of shareholders' interests in the past, pursue social values and achieve sustainable development. Because of the struggle that brought by pandemic, people realized that to fundamentally solve the problem, we must adhere to the new development mode, which must consider the consistency of environment, society, and economy. If we pay attention to the unity of economic and social benefits at the beginning, the governance cost will be greatly reduced.
On Responsibility of Shenzhen Enterprises:
Contribute to high-quality development through scientific and technological innovation
Shenzhen is the forefront of reform and opening up, and now it has entered a critical period of "dual districts" construction. In your opinion, what are the characteristics of Shenzhen enterprises in practicing social responsibility? What practices or cases do Shenzhen enterprises have that impress you with Shenzhen characteristics in terms of "common prosperity," "sustainable development" and "corporate social responsibility?"
Shenzhen is not only an innovative city, but also a city with love and warmth. Shenzhen enterprises have high enthusiasm in practicing corporate social responsibility. In terms of sustainable development, Shenzhen is one of the three UN pilot cities in China. Shenzhen government and enterprises invest a lot efforts to sustainable development every year. In recent year, it has spent hundreds of billions yuan in coping with sewage and have achieved remarkable results. Ping An, China Merchants Bank, Vanke and other Chinese enterprises have exemplified excellent cases in green finance, rural revitalization, and green building. I was also deeply impressed by Guangyue Tech, which provides solar lights for children without lighting in poor areas of the world to study at night. Their new energy lamp not only gives rural children who lack electricity more learning opportunities, but also reduces carbon emissions and contributes to sustainable development. Guangyue has not only won many international awards, but also won several rounds of investment in international capital market.
How will Shenzhen innovate in leading corporate social responsibility in the future?
As an innovative city, the main body of innovation is the enterprise. Firstly, the most important thing for Shenzhen enterprises in the new era is to contribute to high-quality development through scientific and technological innovation. For example, make efforts in key technologies and equipment such as chips, and be competitive at the market; Secondly, Shenzhen enterprises should seize the historical opportunity of the "double districts" construction and create new development momentum through system and system innovation.
In terms of practicing corporate social responsibility, Shenzhen has a good foundation. I believe there will be more excellent entrepreneurs in the future. The Shenzhen entrepreneurs think in the leader picture. They can not only take the lead in practicing sustainable development and pay attention to the consistency of economic and social benefits, but also make positive contributions to the common prosperity of the whole country and become a leading demonstration sample.
On the Change of Tides:
It has become a trend for business to be good and capital to be good
From your point of view, what changes have taken place in society's understanding of sustainable development over the years?
Mankind is undergoing a self revolution. Nowadays, sustainable development has become the trend of the times. The profit oriented business model is bound to be eliminated. The commercial value of both righteousness and profit will be the mainstream of the future. In the future, the economic performance, social value, and environmental effects created by enterprises will be incorporated into the value cycle system to achieve the business for good.
Business for the good has now become an enterprise upsurge and the expectation of the society, so that entrepreneurs should have a strong sense of social responsibility, take helping social development as their own responsibility, go beyond the profit-first mindset and integrate social values and the concept of sustainable development into enterprise management.
From the perspective of the capital market, we have already produced the SV 99 Rank (Social Value 99) in the past seven years. Every year, we select 99 stocks from CSI 300 based on their economic benefits and social value. We are surprised to find that the yield of SV 99 has outperformed the market. Its market performance shows that companies with both economic benefits and social values are more favored by the market, which also reflects a trend: China's capital market is also capital for the good. It also means that China has a good market environment foundation for promoting sustainable development.
In recent years, capital has paid more and more attention to promoting investment allocation in the field of sustainable development, and financial innovations such as green bonds, inclusive loans, impact investment and ESG funds are in the ascendant. In addition, there are also some obvious changes can be seen in recent China, such as the rapid development of green finance and green credit and the upscale rank of China's green credit worldwide. In short, business and capital have become a brand new trend.