Speech by PSLW at Conference on Corporate Social Responsibility - Maximising Stakeholder Value (English only)

Following is the speech by the Permanent Secretary for Labour and Welfare, Mr Paul Tang, at Conference on Corporate Social Responsibility - Maximising Stakeholder Value co-organised by Office of the European Union to Hong Kong and Macao (EU), Hong Kong Institute of Asia-Pacific Studies of The Chinese University of Hong Kong, European Chamber of Commerce in Hong Kong , European Union Business Information Programme and Oxfam Hong Kong today (April 11):

Ms Castillo (Ms Maria Castillo, Head of EU Office), Mr Gettermann (Mr Torben Gettermann, Consul-General of Denmark), Mr Boyle (Mr Sandy Boyle, Head of the EU delegation), distinguished guests, ladies and gentlemen,

Good morning. It is my honour and pleasure to speak at today's seminar and share with you Hong Kong's experience in promoting corporate social responsibility (CSR) through the Community Investment and Inclusion Fund.

In 2001, the Chief Executive of HKSAR announced in his Policy Address the setting up of a $300-million Community Investment and Inclusion Fund, or CIIF as we call it, as seed money to implement projects in the community which would help establish cross-sectoral collaborative platforms and mutual help networks. The fund seeks to build social capital, that is, to garner mutual trust, social networks, spirit of cooperation and social cohesion. As at the end of March 2012, CIIF has allocated over $240 million to more than 230 projects, involving over 6 000 collaborators, and more than 700 000 participants. Among the collaborators, around 30% are from the business sector.

Social capital is considered by expert economic development agencies such as the World Bank to be the essential"social glue" that strengthens the resilience of a community during times of major social and economic changes. It is regarded as the essential fourth capital, along with human, financial and infrastructural capital, to achieve enhanced social and economic outcome. It does so by changing the mindset of people, building trustful relationship, and creating new opportunities through institutional collaboration.

Social capital covers a wider scope than CSR as it encompasses other sectors including the community, non-government organisations (NGOs), governments, businesses, schools, as well as medical professionals, to name but a few. So why is social capital important to businesses in a CSR context? The answer to this is simple - trust. Externally, if a company has developed trust-based relationships with its business partners and the policy makers, it is likely that the company will save valuable time and resources in information collection and negotiations that are critical for decision-making and business transactions. Internally, a company with trust-based relationship with its employees is likely to strengthen internal communication and collaboration and effectively improve the productivity of the company as a whole. To create or re-create trust with relevant stakeholders, corporations need first to accumulate sufficient social capital.

In Hong Kong, CSR is far from a new concept. For decades, corporations have attached increasing importance to CSR and made it an integral part of their corporate culture. But CSR can be manifested in a number of ways. From the CIIF experience, we have come to realise that the involvement of corporations may go well beyond one-off programmes and donations. If taken forward strategically, CSR initiatives may induce dramatic changes and sustainable improvements in the community. The key to such is strategic partnership. Let me briefly take you through some success stories involving the business sector which we have seen in the past couple of years.

The first CIIF project that I am going to introduce involves collaboration between the Hong Kong Disneyland, a local NGO, and the Government. Hong Kong's Disneyland is located near a new town called Tung Chung which is populated with many young families. As with many young families, the young working parents in the area may lack the time and skills to bond with their children. On the other hand, as you can well imagine, staff from the Hong Kong Disneyland do extremely well in communicating with children. In this CIIF project, volunteers from Disneyland transfer their storytelling techniques to local parents in a series of activities and workshops. Parents are also encouraged to make good use of the local public library in the process. In a year or so, the project has successfully built a mutual support network among some 300 local families, some of them once socially detached. There have also been marked improvements in the families' parent-child relationship as well as the children's academic performance and literacy skills. On the other hand, volunteers from Disneyland have gained immense satisfaction from the project and effectively enhanced the corporate image of the company among locals by building a caring community in the vicinity of the theme park.

The second example demonstrates how corporations and their community partners can help promote social inclusion. Hong Kong's population is predominantly Chinese but there is a growing community of those from diverse ethnic backgrounds. There have been concerns that the lack of language proficiency of our ethnic minorities, particularly in the Chinese language, may cast them in a disadvantaged position for employment. In the light of this, Fairwood Holdings Limited, a major local fast food company, has teamed up with an NGO and come up with a CIIF project which aims at connecting ethnic minorities through providing language courses and on-the-job training to non-Chinese staff so that they may sharpen their customer service skills and techniques. To reciprocate, beneficiaries of the project give cultural tours to other participants and share their advice for serving clients from their various cultural backgrounds. This in turn enhances mutual understanding and trust. What's more, Fairwood has indirectly benefitted from the project with less staff turnover, better sense of belonging among staff, and first-hand knowledge and skill sets for serving its minority clientele. The project is one of its kind and has been a huge success.

The third example that I am going to talk about is one of the many CIIF projects which target one-on-one mentorship for young people, particularly those who dropped out from schools and are at a high risk of long-term unemployment and social seclusion. Experience shows that being part of a network connected to information, influence and social solidarity would make a big difference in these young people's employability. To this end, the Ocean Park, also a popular theme park in Hong Kong, has played a pivotal role in a CIIF project which aims at providing a path to social engagement and economic participation through establishing a mentoring network between staff of the Ocean Park and young participants. In addition to mentoring, the Ocean Park provides job orientation and offers a variety of job placements to youths who perform satisfactorily. Although not all participants would eventually be hired by the Ocean Park, they have successfully gained exposure as well as motivation, confidence and life skills for further employment. The project has instilled to these young people a positive outlook in life.

As you see, while each of these three examples is distinct, they all share a common message - a partnership that maximises the strengths and strategic advantages of each party would make a real and long-lasting difference, as well as adding value to the community and the companies themselves.

This year marks the 10th year of CIIF. I look forward to seeing more creative collaboration under the fund, and am pleased to mention that, given its notable achievements, the Financial Secretary of HKSAR has announced in his 2012 Budget Speech the injection of an additional $200 million into CIIF to ensure its continuity. In addition, the Government has been keen in promoting CSR through various other channels, such as the Partnership Fund for the Disadvantaged under the Social Welfare Department which promotes tripartite partnership among the welfare sector, the business community and the Government in helping the disadvantaged. Moreover, various programmes have been launched to pay tribute to those which have put words into action. To name a few, the "Caring Company Scheme" of the Hong Kong Council of Social Service, "Hong Kong CSR Charter" under the non-profit organisation Community Business, the "Family-Friendly Employers Award Scheme" under the Family Council, the "Hong Kong Outstanding Corporate Citizen Award" initiated by the Hong Kong Productivity Council, have all helped to make CSR a social norm in Hong Kong.

All in all, what is good for the community must be good for business in the long run. With concerted efforts of the business sector, I am glad to see a rising trend among local corporations in implementing a good variety of CSR initiatives. And social capital is the key to successful and sustainable CSR initiatives.

Lastly, I would like to thank the EU Office for organising such a timely and important intellectual exchange on the promotion of CSR. I look forward to further exchanges on the subject, and wish this conference every success.

Thank you.

Ends/Wednesday, April 11, 2012