7. Analysis
7.4. Sub-question 3
7.4.2. Location of UNGC signatories
7.4.2. Location of UNGC signatories
Company, 2013). Moreover, many of these cities have significant economic and historical importance and they are considered to be convenient and inexpensive locations for many large industries and companies (SinoStep, n.d.; Gardner, 2013).
Cities that are not part of Tiers 1, 2, or 3 are often grouped together and make up ‘Tier 4’
cities (SinoStep, n.d). They are smaller cities in the North and West of China and they represent the majority of the country’s urban population and combined income (McKinsey and Company, 2013; SinoStep, n.d.). Despite their smaller size and importance, some cities in this tier are also projected to be part of the geographic transition and will have a larger proportion of middle-income residents by 2022 (McKinsey and Company, 2013).
Percentage of Status by Tier
Tier Active Non-communicating Delisted
Tier 1 35% 11% 54%
Tier 2 27% 5% 68%
Tier 3 24% 8% 68%
Tier 4 29% 0% 71%
Table 4: Percentage of Status by Tier (Refer to footnote seven)
In line with the previous analysis, the table above displays that in all tier cities there are higher percentages of delisted participants than active. Moreover, in Tiers 2, 3, and 4 over 60 percent of participants have already been delisted. This high percentage of delistings has made some cities within these Tiers disappear from the ‘UNGC map.’ In other words, in these cities, all participants who had joined the UNGC have by now been delisted. Since no cities from ‘Tier 1’ have ‘disappeared’, the ‘Tier 1’ sub-section will only look into active participation. However, analysis from Tier 2 and 3 will also include
‘delistings’ data. ‘Tier 4’ is excluded as it only represents one percent of total UNGC business signatories (Appendix C).
Chart 2: Active Business Participants by Tiers (Refer to footnote seven)
Active
Tier Joined Before 2011 Joined After 2011
Tier 1 57% 43%
Tier 2 69% 31%
Tier 3 41% 59%
Tier 4 0% 100%
Table 5: Percentage of Active Participants who joined the UNGC Before or After 2011. (Refer to footnote seven)
7.4.2.2. Tier 1 Cities
As displayed above, 63 percent of active UNGC signatories in China, come from ‘Tier 1’.
This may be attributed to the perception that CSR is better developed in those locations which developed first along with the opening-up policies throughout the 1980’s (CSR Asia et al, 2014). Moreover, the awareness of sustainability issues is also more prevalent in the general public and among local government officials (CSR Asia et al., 2014). The UNGC may have a higher profile in ‘Tier 1’ cities—with or without a Local Network—
because there is already an existing awareness of CSR. Furthermore, all cities in ‘Tier 1’
are located in the East and South of China, and CSR Asia et al. (2014) note that the level
63%
20%
14%
1% 2%
Active Business Particpants by Tiers
Tier 1 Tier 2 Tier 3 Tier 4
No information
of economic development is more advanced in these regions. This is because there is a considerable number of manufacturers in the region that supply international markets overseas. Thus, the CSR requirements from international clients help improve the CSR practices, and raise the CSR awareness in Eastern and Southern China (CSR Asia et.al.
2014). In this light, UNGC membership may be accounted to requests from international clients to sign up for the initiative, and not necessarily to the presence of the Network China. For example, from the active ‘Tier 1’ participants, 57 percent joined before the establishment of the network, while 43 percent joined after its establishment.
Since an overwhelming majority of signatories is located in ‘Tier 1’, a more nuanced analysis ensues.
Chart 3: Tier 1 Active Participants by City (Refer to footnote seven)
Tier 1
City Before 2011 After 2011
Beijing 66% 34%
Guangzhou 100% 0%
Hangzhou 0% 100%
Hong Kong 41% 59%
Shanghai 59% 41%
Shenzhen 57% 43%
42%
4% 2%
17%
28%
7%
Tier 1 Active Participants by City
Beijing Guangzhou Hangzhou Hong Kong Shanghai Shenzhen
Table 6: Percentage of Active ‘Tier 1’ Participants who joined the UNGC Before or After 2011.
(Refer to footnote seven)
As can be seen, within ‘Tier 1’, more signatories come from Beijing than from any of the other five cities. As has been discussed, SOEs are a major driving force of CSR in China, and 75 percent of the SOEs who are part of the China Network are headquartered in Beijing (Appendix D). Hence, it may be argued that the high presence of signatories located in Beijing is in part attributed to the influence of SOEs. It could also be argued that since the Network China is headquartered in Beijing, it is easier to reach out to nearby firms and organizations than to other actors who are farther away. However, 66 percent of the signatories located in this city joined the UNGC before the establishment of the network, while 34 percent joined after. This might be attributed to the fact that they could have been the ‘first-movers’ when UNGC first was launched in the early 2000s.
The chart also shows that Hong Kong and Shanghai have large representation within
‘Tier 1’. These two cities, along with Beijing, tend to be where many companies are headquartered. CSR Asia et al. (2014) contend that since foreign and national HQs are still a primary force in the development and execution of CSR in China, CSR professional networks are more active and significantly better developed in these three cities. This, in turn, has led to higher levels of awareness about CSR in the business communities there. Since the UNGC is regarded as the “largest CSR initiative worldwide” (Hoessle, 2014), the higher awareness of CSR may offer an explanation as to why organizations from these three cities join the UNGC.
7.4.2.3. Tier 2 Cities
Graph 3: Tier 2 Active Participants by City (Refer to footnote seven)
As displayed in chart two, 20 percent of active UNGC signatories are located in ‘Tier 2’
cities. The city with most participation is Suzhou with nine signatories, followed by Tianjin with six signatories, and Ningbo and Wuxi with three signatories. Suzhou has close proximity to Shanghai, and Tianjin has close proximity to Beijing. This might have contributed to the fact the signatories in these cities have the highest number of active participants. The other seven cities with active participants have only one or two signatories.
Table five shows that 69 percent of active ‘Tier 2’ signatories joined the UNGC before the establishment of the Network China, while 31 percent joined after. This could be attributed to the fact that these cities have a higher percentage of ‘heavy’ industries, and were potentially pressured by international clients to adhere to CSR measures, and thus could also signed up the UNGC to enhance their competitiveness.
0 1 2 3 4 5 6 7 8 9
10
Tier 2 Active Participants by City
Joined After 2011 Joined Before 2011
Graph 4:Tier 2 Delisted Participants by City (Refer to footnote seven)
Looking at the delisted ‘Tier 2’, it is observable that several cities have disappeared altogether from the active list, which could be attributed to the fact that these cities had international clients requiring UNGC participation, with whom they no longer have ties, and that they subsequently dropped their engagement with COP reporting. Moreover, members from the cities that have disappeared from the active list, all joined before 2011, so it may be argued that the Network China is engaging with members from cities in less developed tiers.
0 2 4 6 8 10 12 14 16
18
Tier 2 Delisted Participants by City
Joined After 2011 joined Before 2011
7.4.2.4. Tier 3 Cities
Graph 5: Tier 3 Active Participants by City (Refer to footnote seven)
In reference to chart two, 14 percent of active UNGC signatories are located in ‘Tier 3’
cities. 59 percent of active signatories from ‘Tier 3’ joined the UNGC after 2011, reinforcing the claim that the Network China has been better at improving their outreach in less developed cities.
Graph 6: Tier 3 Delisted Participants by City (Refer to footnote seven) 0
0.5 1 1.5 2 2.5 3 3.5
Changzhou Foshan Guilin Jian Jinhua Nanchang Putian Shijiazhuang Taiyuan Taizhou Wenzhou Yantai Yiwu Yulin Zhaoqing Zhengzhou Zhenjiang Zhuzhou
Tier 3 Active Participants by City
Joined After 2011 Joined Before 2011
0 1 2 3 4 5 6 7 8 9
Binzhou Changzhi Datong Dongguan Dongying Foshan Fuzhou Guilin Huizhou Jiaxing Jilin City Jixi Kunming Langfang Luoyang Shantou Shaoxing Taizhou Tangshan Wenzhou Xianning Yantai Yuncheng Zhanjiang Zhengzhou Zhenjiang Zhongshan Zibo
Tier 3 Delisted Participants by City
After 2011 Before 2011
Active participants located in ‘Tier 3’ come from 19 different cities. However, the number of cities in ‘Tier 3’ escalates to 46 when including non-communicating and delisted participants (Appendix E). In reference to the table above, two of the cities with most participants from ‘Tier 3—Huizhou and Dongguan—no longer have organizations that are part of the China Network, and all the members coming from these cities have been delisted. These two cities had eight and seven participants, but in reference to the table displaying active participants, no city has more than three signatories. The high level of delistings in these two cities may be explained by mimetic isomorphism; once a company realized its neighbour companies who were not complying with the COP requirement received no backlash from their delistings, they may have had fewer incentives to maintain membership. It should also be noted, that similarly, in ‘Tier 2’
cities, a majority of participants that have been delisted joined the UNGC before establishment of Network China.