Corporate Social Responsibility in China: Hard Law or Soft Law?
The line between hard law and soft law seems a blurred one. In China, corporate social responsibility (CSR) is explicitly provided for under the 2013 Company Law and the Corporate Governance Code issued by the China Securities Regulatory Commission (rather than stock exchanges as is often the case in many overseas jurisdictions). Upon close examination, however, it reveals that the relevant provision is essentially an exhortatory political statement and not an enforceable legal duty. At the moment, information disclosure is the main mechanism to implement the CSR requirement in China. In practice, the number of CSR reports has increased significantly over the past few years, but there are still some problems. For instance, few companies issue CSR reports voluntarily; CSR information is usually scattered in annual reports, making it difficult to read; there are significant delays in the disclosure of CSR information; and most importantly, the quality of CSR reports is generally low. Based on this, several reform proposals are put forward to improve the efficacy of the CSR information disclosure regime, by moving the regime closer towards the hard side of the broader continuum of hard and soft law.