© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 1 KPMG China Corporate Social Responsibility Consumer Rights and Corporate Responsibility May 4, 2011 Consumer International World Congress 2011

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 2

3 Trust in business has fallen dramatically since the early 1980s Customer expectations and behaviour trends in regard to biodiversity preservation, social responsibility, fair trade. October 14, Retrieved from:

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 4 Trust towards business CITIZENSHIP (environmental and social performance) GOVERNANCE (corporate ethics, openness and transparency) as two strong predictors of people’s trust, respect and admiration for companies in every nation involved in this study. Positive correlation between CSR and financial performance Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility Retrieved from:

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 5 Consumers’ concern in CSR Consumers generally become more aware and concerned about various aspects of social responsibility of a business organization The growing level of knowledge and access to information (internet) & magazines that popularize science, marketing, arts… There is an increasing cohesiveness of consumers against irresponsible business Informed consumers are more demanding Teaching methods have changed : children today are not asked to learn and accept but to deduct, to question and understand Some heated consumer concerns including: climate change, fair trade, healthier and safe products, animal welfare, consumer services, support and dispute resolution, consumer data protection and privacy, education and awareness in the areas of product and labeling Are consumers really interested in social responsibility and is it really changing business behaviour?

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 6 Positive correlation between CSR and consumer support Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility Retrieved from:

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 7 Global Sustainability A CSR approach is essential to deliver sustainable development on a global level Effectively integrate the environmental and social dimensions of sustainability into the operations CSR encourages more accountability in business practice, thus helping to define the nature of the relationship between corporations and the rest of society Sustainable development at a global level Economic Sustainability Environmental Sustainability Social Sustainability

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 8 Accountability Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility Retrieved from: The company is held accountable for its CSR actions In order to obtain accountability, companies have to communicate with stakeholders and give concrete evidence that they are committed to continual, long-term improvement Consumer perspective Business perspective CSR should be regarded as a continuum and can be comparable across firms and industries The use of CSR tools to hold accountability for the CSR actions of the company Allows external observers, e.g. consumers, to evaluate the organization, and CSR policy more effectively

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 9 KPMG International Survey of CR Reporting Corporate social responsibility reporting is on a rise % of companies with a separate CSR report Top 100 companies in countries Global (Fortune) 250 companies

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 10 KPMG International Survey of CR Reporting CSR report as a stand-alone report The majority of the 250 biggest companies in the world issued separate reports on Corporate Social Responsibility: 79 percent compared to 52 percent in % produced a separate report and/or disclosed CSR information in their annual financial report. The recent escalation in CSR disclosures by corporations worldwide signals the significance of CSR for sustainable development.

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 11 Drivers for corporate social responsibility KPMG International Survey of CR Reporting What do companies see as value creation by CSR?

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 12 How is CSR reporting building consumer confidence to support sustainable business models?

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 13 “Apple is committed to ensuring the highest standards of social responsibility throughout our supply base. The companies we do business with must provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made.” Apple’s Supplier Responsibility 2010 Progress Report

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 14 “One of the most fundamental impacts NIKE, Inc.’s business can have is to improve working conditions in our global supply chain and the industry as a whole.” Corporate Responsibility Report FY07-09 Nike,INC.

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 15 Growing trends for organizational commitment to sustainability Sustainability: The 'Embracers' Seize Advantage Retrieved from:

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 16 Creating Shared Value, Harvard Business Review Michael E.Porter and Mark R. Kramer, Feb 2011 “Shared value holds the key to unlocking the next wave of business innovation and growth. It will also reconnect company success and community success in ways that have been lost in an age of narrow management approaches, short-term thinking, and deepening divides among society’s institutions.”

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 17 Creating Shared Value, Harvard Business Review Michael E.Porter and Mark R. Kramer, Feb 2011 Corporate Social Responsibility vs. Creating Shared Value

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 18 It’s time for companies to take it very seriously…

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 19 What should your company do to address environmental, social and governance issues? Fully embed these issues into: Performance gap, percentage points Source: McKinsey, February-April 2007 survey of CEOs participating in UN Global Compact

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 20 Communication, communication…

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 21 CSR should link employees, consumers and investors better to the company, by inspiring and empowering them. It is not philanthropy but self-interested behaviour to create economic value by creating societal value. Final Thoughts… It is about a business organization’s contribution to the world’s development at large, and to better people of this generation and the next.

© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 22 Diana Tsui Director, Corporate Social Responsibility