China Sustainability Spotlight: A Promising But Bumpy Long March

June 2017

When sustainability in the West is increasingly integrated into business strategy, it still sounds like “empty talk with no substance” to most Chinese companies in the food and beverages industry. Contrasting to long-established civil society in the West, practically, the Chinese version is a work in progress. This report explored the business opportunities and risks particularly for professional services in China’s sustainability space.

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Personal food safety higher than environment

Chinese consumers currently rate personal health and wellness (People/value: USD48 billion) much higher than the planet (Environment/sustainability: USD39 billion) despite rising awareness of overall sustainability issues thanks to a hyperconnected world.

Chinese government dictates

Given the Chinese political system, the pace of development of the sustainability industry largely depends on how determined and effective the central government is likely to be. This will be a highly complex process, with policymaking, regulation, advocacy and implementation.

NGOs work in progress

China’s civil society movement and NGOs are evolving at their own pace under the specific political system and economic advancement. They are far from part of the policymaking process. Chinese NGOs are rivals and collaborators of foreign NGOs and commercial firms. There is a call for harmonisation of standards between Chinese/ international NGOs if possible.

Professional services market size small but actively expanding

International professional services are actively operating alongside heavy involvement of multinational brand owners and suppliers in the consumer market. Chinese companies’ international exposure has a positive impact on their CSR/sustainability approach. Chinese professional services are emerging and expanding; however, the scale remains small to date.

Positive outlook

Given the advocacy of sustainability by the UN, NGOs, the Chinese government and commercial companies, it is safe to assume that the demand for professional services can only expand. The demand and supply for sustainability services will grow but challenges and risks should be anticipated given the immature market sentiments.

Research Methodology and Introduction

Scope
Ethical labels research methodology
Introduction
Key findings
China a significant contributor to global food and beverages market

Strategic Overview and Ngos

China: Personal wellbeing rated higher than the planet currently…
…but environment forecast to grow faster than people/value
Pyramid of China’s sustainability
Immaturity shows current challenge and future potential
China far underperformed compared to the US in 2015
NGOs movements and the Green Choice Alliance (GCA)
Potential impact of new foreign NGO management law
Key learnings: The government is the driving force

Opportunities and Risks

China sees the concept of CSR/sustainability just emerging
The driver behind the sustainability value chain
Foreign professional services providers: Opportunities and risks
Opportunities and challenges for domestic professional services
Chinese overseas acquisitions and CSR balance
Major ethical labels players operating in China in 2015
Summary: International exposure positive to domestic sustainability

Mutual Influence and Global Harmonisation

Mutual influence, collaboration and competition yield global impact
Multinationals’ global commitments impact China: Palm oil
Coca-Cola’s Honest Tea: Fair trade certified Chinese tea
Tetra Pak huge influencer in spreading FSC globally
Key learnings: Mutual influence and stakeholders grow together

Summary

Key learnings: It will take all stakeholders to walk the long march

Appendix

Appendix
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