Chinese Firms Moving Towards Corporate Social Responsibility? Maybe, if Only Slightly

The China Beijing Environment Exchange, an emissions trading firm, has registered its first purchase by a Chinese company of carbon emissions credits. Does this mark an important symbolic step in the country's efforts to address climate change? Or is it merely just a footnote from a county that is now a (if not the) the world leader in greenhouse gas emissions?

While it is difficult to tell, to be sure, a recent article in The Economist ("Carbon Markets in China: Verdant?" Aug. 20, 2009) suggests that "the concept of corporate social responsibility is no longer entirely foreign in China." This month a firm called Tianping Auto Insurance purchased emissions credits equivalent to more than 8,000 tons of carbon emissions.

The emission credits were voluntary in the sense that they were not mandated by the Chinese government (and heretofore I had been under the impression that China and the U.S. took very different stances on many environmental issues; the U.S. government yet to establish that a mandatory system is preferable to a voluntary one).

Before anyone gets really excited about this development, it is worth noting that the purchase price for the credits was only $40,000. However, it may suggest that Chinese firms believe that there is good to be achieved from being perceived by the wider public as having "green credentials."

For now what we do know, according to The Economist, is that China will be a major venue for certified emission reduction credits (CERs). Despite the rather small step the Tianping purchase represents, anything China does in terms of addressing climate change is worth bearing in mind. It is likely to have the largest economy in the world in one or two more generations.