This full-length report in the key business issues series China Wants to Go Green details new environmental regulations in China and what companies can expect. Not only are laws changing, but the sentiment of the Chinese populace—both a huge customer base and an influence on legislation—has sharpened due to the visible air particulates and massive water supply pollution, for example.
MNCs operating in China have a role to play to prevent further environmental degradation, and government leaders in China are looking to those who shared in the country’s explosive economic growth to not only contribute to environmental restoration, but pay their share of the pollution bill. China’s leaders have also set targets for sustainability reporting, so MNCs are challenged to close the huge measurement gap between what they report globally and what they report in China. In the future China will impose daily fines for noncompliance and rate companies on their environmental performance, and there will be blacklists for polluting companies.
But ultimately, MNCs in China stand to reap benefits from showing demonstrable stewardship in sustainability. Companies operating in China must get ahead of this trend to both mitigate risks and exploit potential opportunities.