Role of corporate responsibility: Insights from three forest-industry multinationals investing in China

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Recent geographic reallocation of forest industrial production has been associated with the rapid expansion of foreign direct investment to emerging BRIC (Brazil, Russia, India, China) countries, where China has attracted the main interest globally. Simultaneously, expectations regarding corporate governance in the global forest industry have been shifting towards placing more emphasis on environmental and social sustainability of the industry. In this paper, we provide insights into the corporate internationalisation process and implementation of corporate social responsibility by investigating three leading pulp and paper companies International Paper, Asia Pulp and Paper, and UPM-Kymmene Corporation, which have large-scale investments in China. First, we compare investment paths of the three companies and address the impacts of global conventions and policy initiatives on corporate operations. Second, taking a corporate responsibility perspective, we look into processes of local-level corporate responsibility and stakeholder involvement. Finally, we examine the visions of operations and the future of corporate responsibility of the case-study companies in China. The scope of corporate sustainability agendas of three multinational companies in China appears to have followed a standardised fashion. The decision to integrate the plantation-based pulp-industry model in the local context of China seems to be a source of controversy towards corporate legitimacy among the three companies, suggesting establishment of land tenure and enforcement of ownership rights as a key condition in problem solving. In addition, broadening social impact assessments in China might help to prioritise good relationships with government authorities, local communities, and civil society members to ensure sufficiently wide stakeholder support and legitimacy.

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