While reading the Boston College Center for Corporate Citizenship Blog, I came across this post about a new report – “Moving to Next Generation Corporate Citizenship” – recently published by the Center for Corporate Citizenship Germany.

This report sucessfully shows how companies are progressing along five developmental stages of CSR, both from the outside in and the inside out.

Not surprisingly, effective stakeholder engagement is key to progress along the different stages. In order to succesfully link CSR with their business strategy, companies must indeed understand what are their stakeholders’ expectations on the ground, and what are the key issues to address. Such approach then enables companies to be proactive (instead of merely reactive) and to change the relationships with some stakeholders from adversaries to partners.

I am even more interested in the fifth stage that they call ‘transformative’: I belive this is when companies are becoming powerful agents of change themselves and when CSR or Sustainability is at the core of their brand or corporate DNA. At this stage companies fully CONNECT and PARTNER with their key audiences (e.g., consumers) to effect positive change. I am also persuaded that this is at this stage that the ROI is the most compelling (i.e. if consumer-oriented initiative, ROI is about brand involvement, brand differentiation, with positive side effects on corporate reputation, etc.).

In China, most of CSR is still at a Compliant stage or Engaged Stage, with a predominance of charity and philanthropic initiatives, which do not offer a very compelling ROI, especially in terms of corporate reputation and stakeholder relationships. What is needed to move foward? Understanding stakeholders expectations and key local issues to strategize locally-relevant and business-aligned initiatives, and this is what makes CSR work in China very interesting and also very challenging.

If you are interested in CSR, I highly recommend you to have a quick read of this report.