透過企業社會責任分析對台灣永續能源政策框架 - 中 華 大 學 碩 ...

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中 華 大 學 碩 士 論 透過業社會責分析對灣續能源政策框架 之業應:華碩個案為例 “Analyzing the Corporate response to the Taiwan Sustainable Energy Policy Framework through Corporate Social Responsibility: The AsusTek case.” 別:行政管理學系碩士班 學號姓:M09717021 卜拉克 ARISTOTLE MATIAS BULACLAC 指導教授:陳春山博士 柯志昌博士 100 8

Transcript of 透過企業社會責任分析對台灣永續能源政策框架 - 中 華 大 學 碩 ...

中 華 大 學

碩 士 論 文

透過企業社會責任分析對台灣永續能源政策框架

之企業回應:以華碩個案為例

“Analyzing the Corporate response to the

Taiwan Sustainable Energy Policy Framework

through Corporate Social Responsibility: The

AsusTek case.”

系 所 別:行政管理學系碩士班

學號姓名:M09717021 卜拉克

ARISTOTLE MATIAS BULACLAC

指導教授:陳春山博士

柯志昌博士

中 華 民 國 100 年 8 月

I

摘要摘要摘要摘要

公部門與私部門的合作是國家一種發展的方式。除了經濟及社會發展影響以

外,公部門與私部門的合作也是測量,評估和分析公共政策的方法。這種夥伴關

係的公共及私人部門引導到什麼叫企業社會責任。

其中一個緊迫的社會問題,現在是氣候變化。溫室氣體排放推動了聯合國發

起的聯合國全球的影響,鼓勵國家和私人公司在努力減少溫室氣體排放和碳排放

是造成全球變暖,由於氣候的變化。

中華民國在台灣,不是聯合國的成員在努力參與這個社會環境的努力,推出

了台灣永續能源政策框架。該研究主要集中在私營部門如何回應市民的政策,以

及如何可用於分析和評估政策。這項研究將利用台灣再生能源政策框架作為政策

模式和華碩電腦有限公司作為模型為私營部門。

關鍵詞關鍵詞關鍵詞關鍵詞::::企業社會責任,公共和私營部門的合作,氣候變化,可持續能源政策框

II

Abstract

The partnership of the Public and Private sector has been one of the pillars of

State development. This doesn’t only contribute to the growth of the State’s economy

and social development but also a means in measuring, assessing and analyzing public

policy. Analyzing policies has been important in the development of a State and also

in improving the way authorities govern.

The partnership of the Public and Private sector is channeled to what is called

Corporate Social Responsibility (CSR) wherein the corporate and industrial sector

contributes in the development and governance procedure of the government by

contributing financially, procuring and creating projects in developing the community

or responding to the governments call through compliance and participating in

enforcing public policies in solving societal problems and social issues.

One of the pressing social issues now is Climate Change. The fast meltdown of

the Arctic glaciers and the high level of the Greenhouse Gas (GHF) emission drove

the United Nation to launch the UN Global Impact to encourage countries and private

firms in the effort of reducing the GHG emission and carbon emission that contributes

to global warming due to climate change.

The Republic of China in Taiwan, not a member of the UN Global Compact, in

effort to participate in this socio-environmental endeavor, launched the Taiwan

Sustainable Energy Policy Framework. The object of the policy is to reduce carbon;

the government started the Carbon Footprint Label system. Early January 2010,

Taiwan’s Environmental Protection Administration, first applied the labeling to

PET-bottled beverages, candles, CDs and cookies. The corporate reception on the

Carbon Footprint policy was characterized by companies striving to have their

products labeled with Carbon Footprint (CFP). Among the big Taiwanese companies,

III

AsusTek Computer, Ltd. Receives the world’s first carbon footprint label for notebook

computer in 2009 and received the Taiwan Carbon Footprint label following its global

success. This is through the company’s green policy for its Corporate Social

Responsibility. In answering to the government’s policy on environmental protection,

AsusTek used its Corporate Social Responsibility to perform its task in helping the

government realize its goal for a better and carbon free Taiwan.

The research focuses on how the private sector response to public policy and

how it can be used in analyzing and evaluating policies. The study will attempt to

measure the level of responsiveness of the private sector and how it affects public

policy especially in realization of the policy implementation. The research will use

Taiwan Renewable Energy Policy Framework as a policy model and AsusTek

Computer Ltd. as model for private sector.

The research will attempt to create a new concept on how to measure and

analyze policy responsiveness through the Corporate Social Responsibility (CSR) and

how it would help in developing a new form of Participatory Governance through

Social Responsible Investment (SRI) and Environment Social Governance (ESG)

which are a CSR system. With these, private sector can participate in governance as a

stakeholder in the public affairs and government and society as stakeholders in the

corporate affairs.

Keywords: Corporate Social Responsibility, public-private cooperation, climate

change, Sustainable Energy Framework Policy

IV

Table of Contents

Abstract-------------------------------------------------------------------------I

Table of Contents-------------------------------------------------------------IV

List of Figures-----------------------------------------------------------------VI

Acknowledgement-------------------------------------------------------------VII

Chapter I

Introduction--------------------------------------------------------------------1

1.1 Background Information: Corporate Social Responsibility----------1

1.2 The Research Issue: Climate Change and the Government----------4

1.3 The Corporate Response: ASUSTek’s Green CSR -------------------7

1.4 Purpose of the Study ------------------------------------------------------9

1.5 Definition of Terms --------------------------------------------------------9

Chapter II

Review of Related Literature-----------------------------------------------11

2.1 Taiwan Sustainable Energy Framework:

In Quest for Security or Sustainability? ------------------------------------11

2.2 Public and Private Partnership through

Corporate Social Responsibility and Inter-Organizational

Cooperation--------------------------------------------------------------------------24

2.3 Why CSR?: CSR in Taiwan Perspective------------------------------------33

V

Chapter III

Methodology-------------------------------------------------------------------37

Chapter IV

Data Analysis------------------------------------------------------------------46

4.1 ASUS Eco Product and Its Labelling-----------------------------------47

The ASUS CSR Comparison-------------------------------------------------53

Acer------------------------------------------------------------------------------54

Toshiba--------------------------------------------------------------------------57

Dell------------------------------------------------------------------------------60

Apple----------------------------------------------------------------------------62

Comparison Matrix------------------------------------------------------------65

Green ASUS and its impact---------------------------------------------------67

Chapter V

Suggestion and Conclusion---------------------------------------------------72

Reference-------------------------------------------------------------------------77

VI

List of Figures

Fig. 1.1 Corporate Social Responsibility Framework-------------------------------3

Fig. 2.1 Framework of Indicator of Taiwan Sustainability-------------------------23

Fig. 3.1 The Roots of Competitive Advantage----------------------------------------38

Fig. 3.2 Dimension of Research Design-----------------------------------------------41

Fig. 3.3 Dimension of Research Concept ---------------------------------------------42

Fig. 3.4 Research Process Flow---------------------------------------------------------43

Fig. 3.5 The Factors that Affect ASUS CSR-------------------------------------------44

Fig. 5.1 Development Progress of Renewable Energy of President’s Committee of

Advisors on Science and Technology--------------------------------------------------75

Table 4.1 ASUS Product with EPEAT Gold (Taiwan) --------------------------------48

Table 4.2 The ASUS and ACER Green CSR Comparison-----------------------------56

Table 4.3 The ASUS and Toshiba Green CSR Comparison---------------------------59

Table 4.4 The ASUS and Dell Green CSR Comparison-------------------------------61

Table 4.5 The ASUS and Apple Green CSR Comparison-----------------------------64

Table 4.6 Matrix of Comparison----------------------------------------------------------65

VII

Acknowledgement

First and above all, I would like to thank the Divine Providence for giving me

His Divine Guidance and wisdom to write this thesis. He knows that this is in effort to

make a difference to this world that He created and the world we are called to love

and cherish. I would like to thank my family for all the support despite of my distance.

To my thesis advisers, Prof. Louis Chun-shan Chen, Ph.D. and Prof. Chi-chang Ko,

Ph.D.,for their unceasing guidance and for imparting a lot for me. To our department

head, Prof. Tai-jing Li, Ph.D, who gives all his support to graduate students in our

department. To Prof. Chien-yuan Tseng, who supported me and made it possible to

have a part of this work published and presented in the 2011 North America Taiwan

Studies Conference at the University of Pittsburgh, USA. To all the professors of

Department of Public Administration and its staff for moral support. To Prof. Tai-kuo

Cheng, who served as one of the committee for my oral defense. To Mr. Frank Lin of

ASUS for giving me a glimpse of how the company’s CSR works. To Business

Council for Sustainable Development of Taiwan (BCSD) for accepting me as their

intern. To my colleagues in the North America Taiwan Studies Association (NATSA).

To my Yuliya, who in a way lessened my stress.

This thesis is for the people of Taiwan and for all who wishes to make this world,

a better place.

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Chapter I

Introduction

1.1 General Background Information: Corporate

Social Responsibility

The partnership of the Public and Private sector has been one of the pillars of

State development. In partnership, private sector performs some programs and

projects the government wishes to create for the betterment of the society in

addressing societal concerns. Partnership, ergo, is more holistic in terms of

public-private dynamics, wherein private sector is deemed as a part of the governance

process, as a stakeholder not just a mere compliant to the governmental enactments

that is more commonly viewed as public and private cooperation. With the

public-private partnership, the relationship of the two sector revolves in the idea that

everybody is a part and responsible to the affairs of the State and everyone must

participate in the socio-political process, thus participatory governance emerges. The

partnership of the Public and Private sector is channeled to what is called Corporate

Social Responsibility (CSR) wherein the corporate and industrial sector contributes in

the development and governance procedure of the government. Corporate Social

Responsibility or CSR for short is a form of corporate self-regulation integrated into

a business model. It functions as a built-in, self-regulating mechanism whereby

business monitors and ensures its active compliance with the spirit of the law, ethical

standards, and international norms. The goal of CSR is to embrace responsibility for

the company's actions and encourage a positive impact through its activities on the

environment, consumers, employees, communities, stakeholders and all other

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members of the public sphere. It aids the government by contributing financially,

procuring and creating projects in developing the community or responding to the

governments call through compliance and participating in enforcing public policies in

solving societal problems and social issues. It would promote the public interest by

encouraging community growth and development, and voluntarily eliminating

practices that harm the public sphere, regardless of legality. CSR is the deliberate

inclusion of public interest into corporate decision-making, that is, the core business

of the company or firm, and the honoring of a triple bottom line: people, planet,

profit.

A more common approach of CSR is philanthropy. This includes monetary

donations and aid given to local organizations and impoverished communities in

developing countries. Another approach to CSR is to incorporate the CSR strategy

directly into the business strategy of an organization. Another approach is garnering

increasing corporate responsibility interest. This is called Creating Shared Value, or

CSV. The shared value model is based on the idea that corporate success and social

welfare are interdependent. (See Fig. 1.1)

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Fig. 1.1 Corporate Social Responsibility Framework

(Source: Wikipedia CSR Framework Value 1 jpg.)

This research revolves on the parameter of the government and corporate

partnership through a channel known as the corporate social responsibility. The issues

of which the paper considered the notion that in analyzing the partnership of public

and private sector, we can analyze the private compliance to the public policy or shall

we say the establishment of business ethics to promote to foster a harmonious

business environment within the realm of the State. CSR then is a mean of corporate

sector to participate in the State affairs through their corporate policy. Corporations

are called to participate actively in helping to address societal issues such as human

development, literacy, livelihood, social justice and environmental protection. CSR

then became an agora or meeting place for the public realm which manages the state

and the corporate realm which controls the behavior of the market. CSR became the

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aid of the government in serving the society as well as the aid of companies to create

favorable corporate image as well as an avenue for “giving back the profit to the

people”. These may be in terms of social services, service improvement or the most

urgent environmental concerns.

1.2 The Research Issue: Climate Change and the

Government Response

One of the pressing social issues now is Climate Change. The fast meltdown of

the Arctic glaciers and the high level of the Greenhouse Gas (GHF) emission drove

the United Nation to launch the UN Global Impact to encourage countries and private

firms in the effort of reducing the GHG emission and carbon emission that contributes

to global warming due to climate change. Climate change usually refers to changes in

modern climate. It may be qualified as anthropogenic climate change, more generally

known as global warming or anthropogenic global warming (AGW) which is the

increase in the average temperature of Earth's near-surface air and oceans.

According to Karl TR, et. al. (2003), Greenhouse gases greatly affect the

temperature of the Earth; without them, Earth's surface would be on average about

33 °C (59 °F) colder than at present. Note that the greenhouse effect produces a

temperature increase of about 33 °C (59 °F) with respect to black body predictions

and not a surface temperature of 33 °C (91 °F) which is 32 °F higher. The average

surface temperature is about 14 °C (57 °F). Due to the high greenhouse producing

greenhouse effect, sudden increase of temperature occurs that produces the so called

Climate Change. Since the rapid increase of industry, the burning of fossil fuels which

are of great importance because they can be burned (oxidized to carbon dioxide and

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water), producing significant amounts of energy per unit weight,

and deforestation leading to higher carbon dioxide concentrations in the air, the rate of

carbon emission increases contributing to the high amount of greenhouse gas (GHG).

The issue then is the carbon emission level usually high on industries that

consumes high energy. In order to sustain the high requirement of energy for

production, the demand for the combustion of fossil fuel is high creating a high level

of carbon emission. Taiwan, being one of the economies that are laid on high

technology and industries, has a high demand for energy consumption to sustain its

industry based economy. Per capita energy use in Taiwan is on par with several of its

neighboring countries in Asia. However, energy intensity levels in Taiwan compared

to other developed countries tend to be relatively high. This is due primarily to the

country's heavy concentration of energy-intensive manufacturing industries. Taiwan's

per capita carbon dioxide emissions have been increasing, and in 2003 represented

more than four and a half times the amount of per capita carbon dioxide emissions in

China (12.4 compared to 2.7 metric tons). Taipei has the most obvious air pollution,

primary caused by the motorbikes and scooters used by millions of the city's

residents.

The Fifth Six-Year Plan that was passed by Taiwan's Executive Yuan states that

Taiwan's major environmental problems will be addressed, which was enacted by year

1997. Population density, high energy consumption due to big industries, industrial

wastes and rapid conversion of lands into industrialized zones are issues contributing

to the increase of Green House Gas Emission and the increase of carbon that

contributes to the climate change and the vulnerability of Taiwan in facing natural

disasters. In a report of the U.S. Energy Information Administration states that:

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Taiwan is grappling with the environmental ramifications of building one of Asia's

richest economies through a decades-long commitment to economic growth.

Environmental issues include the pollution of air and water in urban areas, stores of

nuclear and toxic wastes, loss of fisheries and coastal ecosystems, and an overall

degradation of the country's natural landscape.

In order to create a win-win-win solution in energy, environment, and economy,

sustainable energy policies should support the efficient use of limited energy

resources, the development of clean energy, and the security of energy supply. Passed

on June 5, 2008 by the Executive Yuan, the Sustainable Energy Policy Framework

will answer Taiwan’s energy problem given the fact that Taiwan is insufficient in

natural resources, and constrained by limited environment carrying capacity.

According to the Taiwan Sustainable Energy Policy Framework, Sustainable

energy development should balance the objectives of energy security, economic

development and environment protection, and consider the need of future generations.

It aims to: 1.) Improve energy efficiency 2.) Developing clean energy

3.) Securing energy supply. The policy aims to reduce the carbon emission of

Taiwan to 2000 level by year 2025. In the efforts to achieve the 2000 level of carbon

reduction target of Taiwan by 2025, the Cabinet-level Environmental Protection

Administration (EPA) worked on a system to label the carbon footprints of

consumption products as part of efforts to reduce greenhouse gas emissions. This

paved way to the many Carbon footprint labels on most of Taiwan’s products mostly

from the IT-based such as electronic devices, gaming consoles and computers.

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1.3 The Corporate Response: ASUSTek’s Green

CSR

ASUSTeK Computer Incorporated (華碩電腦股份有限公司) is a multinational

computer product manufacturer headquartered in Taipei, Taiwan. Its product range

includes motherboards, laptops, servers and mobile phones. The company also

produces components for other manufacturers, including Dell, Falcon Northwest,

Hewlett-Packard and Apple Inc.

1ASUS appears in Business Week’s "InfoTech 100" and "Asia’s Top 10 IT

Companies" rankings. Wall Street Journal Asia ranks it number one in quality and

service, and it leads the IT Hardware category of the 2008 Taiwan Top 10 Global

Brands survey with a total brand value of US$1.324 billion.

Using the case of ASUSTek, a Taiwan based computer company, as a model for

corporate response using CSR; the paper was able analyze how the Carbon Footprint

Label System on ASUS products, specifically computers contributed to the

Sustainable Energy Policy Framework. The so called “Green Corporate Social

Responsibility” (Green CSR) of ASUS led the company to create the branding “Green

ASUS”.

2 According to the declaration of Policy by Social and Environmental

Responsibility Policy of ASUS (SERAsus), which was establish 2006, though the first

report on Environment, Health and Safety was first published on 2005, the company

shall:

1 Retrieved from 2008 Top Taiwan Global Brands announced today (2008/10/23)". Brandingtaiwan.org.

2008-10-23. June 1, 2010

2 Retrieved from: http://csr.asus.com/english/index.aspx# February 24, 2011

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1. Abide by all environmental protection, labor, and safety and health

laws.

2. Conserve natural resources and endeavor to prevent pollution.

3. Reduce environmental impacts and safety risks.

4. Satisfy customer requirements and aim to become an entirely green

enterprise.

5. Facilitate a company-wide promotion of corporate responsibility

particularly social and environmental aspects.

6. 3 Encourage all employees to participate in the program and

continuously improve it.

The corporate policy states that the company is committed to abide by

environmental and labor protection laws, regulations to meet related demands issued

by the government, and vouch to support the global environmental protection, labor

rights and occupational hazard control.

The research tried to address this primary question especially focusing on the

corporate side of the stakeholders and how the corporate sector reaction on the Taiwan

Sustainable Energy Policy Framework. Using ASUSTek as an example, the research

was able discuss the different programs of ASUSTek on its effort to fulfill its duty as

government’s partner in policy action particularly in sustainable development through

Corporate Social Responsibility.

3 Ibid.

9

To wrap up, the research simply analyzed on how the corporate sector reacts on a

certain policy using the avenue so called Corporate Social Responsibility. The thesis

used ASUS to represent the corporate sector and Sustainable Energy Policy

Framework which covers the Carbon Reduction program as a representative for policy.

Specifying CSR, the thesis will look upon the outstanding compliance of ASUS in

having their computers Carbon Footprint Labeled in compliance to the policy.

1.4 Purpose of the Study

The study focused on Policy Response analysis, public-private cooperation,

Corporate Social Responsibility. Therefore this aims to:

1. To analyze the responsiveness of the private sector to public policy

2. To evaluate the nature of public-private cooperation

3. To investigate the social and corporate implication of the Taiwan

Sustainable Energy Policy Framework

1.5 Definition of Terms

This study operated on the following definition of term:

Corporate Response, in this study refers to actions done by the corporate sector

in response to a public policy.

Corporate Social Responsibility, refers in this study as the methodology where

the corporate sector produces programs or schemes either in complying with a public

regulation, collaborative action for social development or as a business model as sort

of marketing or improving the corporate image.

Sustainable Energy Policy Framework is a policy passed by the Executive

Yuan of the Republic of China to improve energy efficiency by more than 2% per

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annum, so that when compared with the level in 2005, energy intensity will decrease

20% by 2015 and to reduce Carbon and Green House Gas emission. In this paper, the

Sustainable Energy Policy Framework will be the basis for public policy that will be

the independent variable and will be used as the basis of testing the Green CSR of

Asustek.

Green CSR of ASUSTek, refers to the CSR of ASUSTek specifically for

environmental protection.

Carbon Reduction/Offset refers to reduction in emissions of carbon or

greenhouse gases made in order to compensate for or to offset an emission made

elsewhere.

Sustainable Development is a pattern of resource use that aims to meet human

needs while preserving the environment so that these needs can be met not only in the

present, but also for generations to come.

Participatory Governance, in this study refers to inter-organizational

participation particularly non-government sector specifically, corporate or business

sector in participating with the government in implementing, complying and or

collaborating to the policy for social or state development.

11

Chapter II

Review of Related Literature

This study discusses two main issues of literature review. The first is about

pertaining to sustainability, sustainable and renewal energy policy, carbon reduction

and Green House Gas Emission. The second is how both public and private sector

creates a cooperation through corporate social responsibility.

2.1 The Taiwan Sustainable Energy Policy

Framework: In Quest for Security or Sustainability?

Since the 1970s when the world suffered from the Oil Crisis of 1970’s, Taiwan

lacks energy resources and highly depends on import, so it is a top priority to develop

clean, sustainable, and independent energy and achieve the balance among energy

security, environmental, and industrial competitiveness, and reduce CO2 emissions

through various strategies. Taiwan relies on imports for more than 98 percent of its

energy, which leaves the island's energy supply vulnerable to external disruption. In

order to reduce this dependence, the Ministry of Economic Affairs' Bureau of Energy

has been actively promoting energy research at several since the 1990s.

4 As of 2010, in Taiwan, oil accounts for 49.0% of the total energy

consumption. Coal comes next with 32.1%, followed by nuclear energy with

8.3%, natural gas (indigenous and liquefied) with 10.2%, and energy from renewable

sources with 0.5%. Taiwan has 6 reactors and two under construction.

4 Retrieved from: http://www.moeaboe.gov.tw/English/Statistics/EnStatistics.aspx, June 27, 2011

12

The Taiwan government has been active in promoting energy efficiency, and set

a target of energy efficiency of 33% by 2025. This target is higher than Japan's

commitment to APEC with the target of 25%-26% efficiency. The government is

currently assisting 200 major energy users (companies and organizations) in

implementing energy-saving measures.

Taiwan is preparing for the age of high oil prices, and is proactively developing

clean energy, such as solar and wind power and biofuels. The efforts would help

reduce Taiwan's reliance on imported oil, while contributing to the reduction of

greenhouse gases.

The government aims for renewable energy to account for 15% of the nation's

energy by 2025. It would amount to 8.45 million kilowatts, capable of producing 28.7

billion kilowatt hours of electricity. Wind-generated power could create as much as

8.9 billion kilowatt hours of electricity by 2025, comparable to 2.3 times the capacity

of Linkou's thermal power plants. Many domestic companies are now beginning to

work on the development of solar energy, and conservative estimates are projecting

that 1.2 billion kilowatt hours of electricity will be produced through solar power by

2025.

Under the Energy Management Law and the underlying Implementing

Regulations and related measures, companies are encouraged to improve the energy

efficiency of their operations and products. Mandatory programs have been

established for the purpose of energy conservation, including energy audit and energy

efficiency standards for certain electrical and electronic products.

The Energy Commission under the Ministry of Economic Affairs is responsible

for formulating and implementing energy policy and laws, including the programs

13

instituted under the Energy Management Law. The principal responsibilities of the

Energy Commission include:

(1) Supervising general affairs related to energy management to assure the

stability of energy supply;

(2) Accelerating the rationalization of energy pricing;

(3) Promoting the effectiveness of energy utilization;

(4) Preventing energy-related environmental pollution; and

(5) Enhancing energy research and development.

According to Chen, et.al (2007), to promote the development and application of

renewable energy, under the planning and execution of Bureau of Energy of Ministry

of Economical Affairs (BOEMOEA), Taiwan has implemented many measures for

subsidizing the installation of RE apparatus since 2000. Besides subsidizing the

installing expenses, Taiwanese government also provides incentive measures of

finance/tax, such as investment deduction and accelerating depreciation. The

successive growth of the amount of installing cases has apparently constructed the

base of promotion and application of renewable energy; on the other hand, many

barriers to be overcome were continuously discovered during the executing processes.

To effectively remove these promoting barriers, the Energy Commission (the

pre-BOE) issued “Renewable Energy Development Plan” through the endorsement of

Executive Yuan in January 2002. The purpose of this plan is to establish an

inter-ministerial coordinating mechanism of a higher administrative level, which may

focus all resources to be functioned as a working team. In the meantime, to further

establish a systematically promoting mechanism, the Bureau of Energy then pushes

14

the legislation of “Renewable Energy Development Bill”. According to the drafted

plan of this law, the power capacity of renewable energies will be 12% share of the

national power installation capacity by 2020. Furthermore, in the Nuclear-free

Homeland National Conference held in June 2003, government planned that the

power capacity of renewable energy must reach 10% of the total power capacity in the

nation by 2010. However, the share of the power capacity of renewable energy to the

national power installation capacity is only 6.17%, currently, so there is still a lot of

growing space for the development of renewable energy in Taiwan.

According to Chen and Hou(2008), since June 5, 2008, the Executive Yuan

approved the Framework of Taiwan’s Sustainable Energy Policy. It aims to: 1.)

Improve energy efficiency 2.) Developing clean energy 3.) Securing energy supply.

The policy aims to reduce the carbon emission of Taiwan to 2000 level by year

2025.The goal is to improve energy efficiency by more than 2% per annum, so that

when compared with the level in 2005, energy intensity will decrease 20% by 2015.

Supplemented by further technological breakthroughs and proper administrative

measures, energy intensity will decrease 30% by 2025. The carbon emission target is

to reduce nationwide CO2 emission, so that total emission could return to its 2008

level between 2016 ~ 2020, and further reduced to the 2000 level in 2025. The green

energy application is to achieve the share of zero carbon renewable energy in

electricity generation system up to 8% in 2025.

In order to achieve the preset goals and targets, government agencies were

requested to formulate concrete action plans in accordance with the framework. To

ensure the implementation of the proposed Energy Saving and Carbon Reduction

Action Plans would meet reporting, monitoring, and verification requirements, the

15

authorities required that:

1. Quantitative objectives should be established for each task to measure its

performance and facilitate implementation.

2. Carbon reduction targets should be clearly set in all action plans.

3. Monitoring and follow-up mechanisms should be built to regularly review the

effectiveness and performances of the said action plans.

The Taiwan Sustainable Energy Policy Framework can be viewed in a two way

perception basing on which ground the policy was really made for. 5In the article

written in the blog “Taiwan Sustainable Cities”, a blog on Taiwan’s green urban

development, the author reports that Taiwan’s 99 percent dependence on energy

imports is complicated further by dual vulnerabilities to Middle East instability and

fragile cross-strait relations. He further states that as China upgrades its naval fleet

with the goal of obtaining blue-water capabilities -- Taiwan should be increasingly

worried about the likelihood of continued unfettered ocean supply routes around both

the Taiwan and Malacca Straits that, he viewed as China chocking off Taiwan’s oil

supply that Taiwan’s one month sufficient supply would be insufficient to keep its

economy working. Adding to oil, coal, another source of Taiwan’s energy source, a

quarter of its total coal imports, currently, is now relying to China’s increasing coal

imports. The author, concludes, that in order to secure and improve energy situation,

the Executive Yuan made the Sustainable Energy Framework. Whether the rationale

of this policy is to secure Taiwan’s energy source, the bottom-line is that the

government is working towards not only to improve and to produce sustainable

energy but also to protect and conserve Taiwan’s environmental situation hastened by

5 Retrieved from:

http://taiwansustainablecities.blogspot.com/2011/04/taiwans-energy-security-battle.html April 12, 2011

16

carbon emission.

Once Chan, et.al (1998) stated that in the 21st Century, Taiwan will encounter

further environmental challenges at the local, regional and international levels.

Post-Kyoto concerns for climate change will create international pressures to reduce

green house gases (carbon dioxide, methane). The environment and energy are

important domestic and international issues that are now national security concerns

for Taiwan.

The strategic plan is offered for transforming the Taiwan Environmental

Protection Agency (TEPA) to an organization that spearheads the government’s effort

to create a sustainable future. As the “environment” is defined as energy and

material flows in commerce, not just waste, it must be brought to a central function in

government. Therefore, we recommend the formation of a Ministry for

Environment and Resources. However, it is critical that resources explicitly include

responsibilities to affect energy and materials utilized in construction, agriculture,

transportation and industry.

Government needs to apply a new modality to its environmental management

programs. While strict enforcement at all levels of governance establishes integrity, a

new modality uses public persuasion and cooperative negotiations with industrial

sectors. Management personnel will need to enhance their skills in environmental risk

assessment, economic impact assessment, and environmental negotiation to be ready

to implement a new government-industry-citizen partnership era.

The effort of the Taiwan government to achieve its goal, that is reducing carbon

emission to the 2000 level in 2025, Drs. Chen and Hou, in the paper emphasized the

enthusiastic action of the government by requesting government agencies to formulate

concrete action plans in accordance with the Sustainable Energy Framework. The

17

paper clearly shows the sincerity of the government in participating in this global

endeavor of Carbon Reduction especially, that Taiwan is not a member of the UN

Global Compact due to its current status in the United Nations.

Nevertheless, Taiwan is very eager to contribute in this global endeavor. The idea

then is, since Taiwan, technically, cannot involve directly or formally to this

international agenda, Taiwan, using its globalized industries through private firms,

Taiwan’s corporate and industrial sector can serve as a liaison and also a model for

call for carbon reduction compliance through the private participation to the national

policy, Sustainable Energy Policy Framework.

Taiwan, contributed globally through its local policy that contributes to this

international call. We can say, through Taiwan’s local policy that is based on the

global agenda in answering global issue, Taiwan was able to do her share in this

collective action. In order for her to involve the nation’s dynamic yet diverse sector,

Taiwan must encourage sectors to participate in policy implementation wherein for

the corporate sector, through the use of Corporate Social Responsibility. Whether the

Sustainable Energy Policy Framework is more sincere in sustainable development

rather in political and energy security, the effort of the government should, in

principle for the best of its people which is the primary responsibility of the State. The

policy therefore should not only be viewed as a response to economic challenge from

external pressure and natural resource reality but also as a positive and dynamic

response of the government to a global endeavor.

18

The March 2010 issue of PCF World Forum features Taiwan’s Carbon Footprint

Level reaching the Taiwanese Market. The Taiwan Electrical and Electronic

Manufacturer’s Association (TEEMA) came up with its own carbon labeling for

electronic sector. Taiwan is the latest nation to float a plan to label the carbon

footprint of common consumer packaged goods, following in the footsteps of the UK

and Sweden. The labeling program, from Taiwan’s Environmental Protection

Administration, was at first applied to PET-bottled beverages, candles, CDs and

cookies.

In response to the government’s policy on environment, the corporate sector

started their own initiative to create an environment based production and

environment based quality control through carbon footprint labeling on their own

respective products. This simply manifests a positive and active response from the

corporate sector to the public policy.

Since the aim of this paper is to assess and investigate on the corporate response

through CSR, it is very substantial to study how corporation formulate their own

respective CSR programs and how these programs go with the policy and regulations

by the government and societal issues. This will lead on how to corporation and

industries behaves in a given point of issue or agenda. We can conclude then that the

policy is a scenario for a corporate social responsibility taking the philanthropic

approach of CSR as a model. Or, was it a business strategy to answer policy making it

a mere compliance? Ideally, CSR should work as a value formation for business that

means in making or developing business success level is also improving the society

and in hand-in-hand with the government in addressing a societal issue thus creating a

means of a new participatory governance.

19

With the issue of sustainable energy source amidst the scarcity of energy

resources, Taiwan uses energy alternatives that perceived to be efficient yet

sustainable. According to Lee (2006), energy conservation and greenhouse gas

reductions are the major components of the present energy policy in Taiwan. The

production of electricity from nuclear source has resulted in a significant reduction in

atmospheric emissions and in the consumption of conventional fossil fuels from what

otherwise would have occurred.

Over the period 1977-2007, electricity generated by Taiwan's nuclear power

plants averted the following cumulative greenhouse gas emissions: 828 million tonnes

of CO2, 2.3 million tonnes of NOx, 14 thousand tonnes of VOCs, and 5 thousand

tonnes of CH4. In addition, nuclear energy production displaced 330 million tonnes of

coal that would otherwise have been burned to produce electricity by electric utility.

In the paper of Lee, he presented that the use of nuclear energy could reduce

carbon emission. Atomic energy offers a clean energy alternative that frees us from

the shackles of fossil fuel dependence. Nuclear power costs about the same as coal, so

it's not expensive to make. It does not produce smoke or carbon dioxide, so it does not

contribute to the greenhouse effect. It produces huge amounts of energy from small

amounts of fuel. It produces small amounts of waste and nuclear power is reliable.

Although not much waste is produced, it is very, very dangerous.

It must be sealed up and buried for many thousands of years to allow the radioactivity

to die away. For all that time it must be kept safe from earthquakes, flooding,

terrorists and everything else. This is difficult. Nuclear power is reliable, but a lot of

money has to be spent on safety - if it does go wrong, a nuclear accident can be a

major disaster. People are increasingly concerned about this - in the 1990's nuclear

20

power was the fastest-growing source of power in much of the world. In 2005 it was

the second slowest-growing. But, as the price of oil and global warming concerns

both continue to rise steadily, a renewed interest in the clean-burning properties of

nuclear power are becoming much more attractive. The rise of global warming

concerns throughout the world over the last ten years has led to a renewed interest in

what was once considered a dead market.

Will nuclear power answer to the challenge of the current climate change and the

call of the Sustainable Energy Policy Framework? The fact to consider is that will it

suits Taiwan’s present condition and the necessity for it to sustain the nation’s demand

for energy. Taiwan currently has 4884 MWe of nuclear power capacity by means of 3

active plants and 6 reactors, which makes up around 8.1% of its national energy

consumption. This makes Taiwan the 15th largest user of nuclear power in the world.

Given a very limited source of sustainable energy for its fast and dynamic economy, it

is very inevitable for the nation to seek a more long term yet sustainable and clean

source of energy. Nuclear power may answer this concern yet safety and precaution

should also be considered. Considering that Taiwan is prone to natural disaster often

frequented by typhoons, earthquakes and landslides, it also summons images of

disaster.

In this course of issue, two agenda then occurs, the issue of development and the

issue of sustainability. In the course of development, the issue of environment is often

complimentary. Since the industrial revolution in the western world, the issue of

environmental problems started to sprout. Industrialization, which is a means of

development, is often acquainted with the term “pollution” or environmental

degradation. Here comes the question on how these two “opposing” idea of

development and sustainability can be complementary in the lighter side. Can it be

21

possible to attain development without putting sustainability at stake? The object is to

create a well developed economy yet sustainable in nature hence we call sustainable

development. Boulanger (2004) states that social indicators, and therefore sustainable

development indicators also, are scientific constructs whose principal objective is to

inform public policy-making. Their usefulness is dependant on trade-offs between

scientific soundness and rigor, political effectiveness and democratic legitimacy. The

paper considers in this perspective three important stages in the building of

sustainable development indicators: the identification of the various dimensions

underlying the concept of sustainable development, the process of aggregating lower

dimension indicators in higher level composite indices and the attribution of weights

at various levels of the indicators hierarchy. More specifically, it assesses the relative

fruitfulness for indicators construction of the four most widespread conceptions of

sustainable development, in terms of domains or pillars (economy, society, and

environment), in terms of resources and productive assets (manufactured, natural,

human and social capitals), in terms of human well-being (needs, capabilities) or in

terms of norms (efficiency, fairness, prudence…). It concludes with a plea for the

construction of synthetic indices able to compete with and complement the GNP as an

indicator of development.

In the research by Chen, et.al (2008), they tried to establish a standard indicator

in measuring sustainability. The study written by Chen, et.al (2008), utilizes the

method of Material Flow, Ecological Footprint Model and other related indicators to

establish the Indicator System of Sustainable Development. Principal Component

Analysis is used to abstract the representative factors in order to estimate the

indicators of ecological sustainable development during 1998~2005 in Taiwan, as

well as to make policy recommendations. The research indicates following results: (1)

The Direct Material Input (DMI) of Taiwan shows constant instability and depends on

22

heavy import activity. The annual increase of considerable greenhouse gas emission

leads to a comparative growth of the Domestic Process Output (DOP). The both

material consumption and inventory formation of the economy are unsteady. In

addition, the Physical Trade Balance (PTB) indicates that supply exceeds demand, as

well as the occasional shortage of building materials. (2) The 2005 per capita

Ecological Demand footprint in Taiwan is 6.5392 hm2, making the Ecological Deficit

per capita 4.8569 hm2. The figures reflect that productivity and life intensity of

residents have exceeded the carrying capacity of Taiwan’s ecological economic

system. (3) The overall Synthetic Trend Indicators of Sustainable Development in

Taiwan are decreasing. Therefore, if proper measures are not adopted in time, the

current weak sustainability will lead into the vicious circle which departs from

sustainable development.

Since about 1970, economic growth ceased to be considered the most important

criterion for measuring urban development. Instead “development” has come to

encompass other aspects such as environmental quality and the provision of public

service. Sustainable urban development must be more than merely “protecting” the

environment; it requires socioeconomic adjustment in order to reduce the need for

environmental remediation (OECD, 1990). According to Huang, et.al (2001),

urbanization in rapidly industrialized countries has been particularly unsustainable.

Evidence of progress in urban sustainability is important in justifying urban

management policies. To assess the trend of Taiwan’s sustainability, a research team

from various disciplines was organized by the National Science Council of the

Republic of China to develop a system of indicators for measuring Taiwan’s

sustainable development. To emphasize the intensity of urbanization, and its

significance for Taiwan’s sustainability, the framework indicators are divided into

23

“Island-Taiwan” and “Urban-Taiwan” (Fig. 2.1). Following the concept of

pressure-state-response (P-S-R), the indicators of “Island-Taiwan” are categorized

into economic pressure (P), social stress (P), environmental pollution (S), ecological

system (S), and institutional response (R). The development of the P-S-R indicators

are based on island-wide statistics, while the “Urban-Taiwan” indicators are based

mainly on the three metropolitan regions of Taiwan only and that those urban areas

account for 56 percent of the population and 13 percent of the island’s area.

Fig. 2.1 Framework of Indicators of Taiwan Sustainability

(Source: Huang, et.al , 2001)

The NCSD reached consensus on the Taiwan Sustainable Development

Indicators (SDI) during their 16th Assembly on 5 June 2003. The indicators help

assess the progress of sustainable development in Taiwan and respond to the United

Nations' request for each country to establish an indicator system that can be used to

assess each country's efforts toward sustainable development. Taiwan's SDI system is

based on an extended Pressure-State-Response (PSR) framework that is divided into

two systems to address the unique situations of Island Taiwan and Urban Taiwan. A

24

total of 42 core indicators are categorized under the following six dimensions:

environmental pollution, ecological resources, social pressure, economic pressure,

institutional response, and urban sustainable development.

The issue of sustainable energy involves society, government and private sectors

as stakeholders. Public opinions made by the society are vital in formulating a policy

to be enforced by the government wherein to be enhanced though corporate aid

through corporate social responsibility thus creating a participatory governance. To

accurately achieve this, one must take into consideration, social indicator to create

basis for policy formulation and also sustainable development indicator to

complement it.

2.2 Public and Private Partnership through

fostering Corporate Social Responsibility and

Inter-Organizational Cooperation

O’ Toole (2004) emphasized that in fostering inter-organization cooperation, first,

a common interest should be build and used. Secondly, using exchange, cooperation

can be facilitated. Recognizing the significance of different inter-organizational

patterns is one step toward effective implementation. In addition, skillful

implementation managers need to find ways of getting organizations to work together

toward policy success. Inducing implementation success via inter-organizational ties

25

typically requires some combination of generating and tapping common interests, on

the one hand, and/or utilizing exchanges to link units in productive ways for purposes

of policy. Each of these themes deserves attention.

Companies in order to response to governments calling would use corporate

social responsibility as a means. CSR is related to the Values of the corporation,

which endow its management with a sense of identity, stronger stability, give

directions to important issues and guidance for managerial decisions (Deal &

Kennedy 2000). Therefore, Values are the core culture of a company, affecting its

activities and relationships with stakeholders (Valentine & Barnett 2003). Values

regulate the owners’ actions, product quality and also improve trust, loyalty and

effectiveness resulting from enhanced organizational culture (Engelbrecht et al.,

2005).

The World Business Council for Sustainable Development (WBCSD, 1999)

defines CSR as a commitment to improve quality of life for its stakeholders by

conducting ethical business while devoting itself to financial performance. The World

Business Council for Sustainable Development (2003) has further explanations that

CSR initiatives refer to business commitment devoted to sustainable economic

development management with employees, their families, the local community and

society by improving their life quality.

CSR focuses on the need for corporations to go beyond the interests of their

shareholders and address the impact their activities have on a broader social and

environmental spectrum. CSR attempts to counteract any negative effects that

26

corporations have on society and replace them with constructive influence. It has four

components namely employment, customer, environment and society

The treatment of employees by large corporations has often come under scrutiny

by political organizations and human rights groups. Particularly in developing

countries, where many resource extraction industries have extensive operations, there

are ongoing questions about just how equitable working conditions and pay levels are.

CSR seeks to assist corporations in treating both domestic and foreign employees

equitably by providing safe and comfortable working conditions and a fair wage. This

approach continues the ongoing transformation of a corporate mentality that was

common in the nineteenth century, in which the rights of employees barely registered

among the concerns of company owners.

Corporations have an obligation to provide safe, effective and good-quality

products and services to their customers. A purely free-market analysis of this

responsibility would state that these requirements will be met by the dictates of the

market. The philosophy of CSR questions the truth of this belief, and advocates more

proactive intervention into the relationship between corporations and their customers.

Consumer protection initiatives, such as those advocated by Ralph Nader, help to

provide the legal backing under which consumers can challenge what they see as

questionable practices on the part of corporations

Growing public awareness of environmental challenges involving toxins,

resource depletion and climate change is forcing corporations to reconsider the

traditional corporate view of the natural world as an unending cornucopia of resources.

Environmental aspects of CSR encourage corporations to consider the finite nature of

the natural world, and to take much more stringent measures to reduce waste, address

27

polluting or destructive practices and integrate alternative energy systems and

innovative waste-reduction programs. This shift in attitude is particularly critical in

areas of South America and Africa, where corporations have extensive operations but

are not subject to strict oversight and regulation.

In addition to their responsibilities to employees, customers and the natural world,

corporations are responsible for their impact on human society. Many millions of

people who are not employed by a corporation and who do not purchase its products

are nevertheless affected by its activities. CSR recognizes the interrelated nature of

society, and acknowledges that no individual or company can exist totally isolated

from the rest of society. Therefore, corporations need to critically analyze what

impact their activities have, for good or ill, on surrounding communities, and take

steps to maximize the good and minimize the ill.

Will CSR then answers the question on how and how far is the corporate

response to the public policy? As the pressuring issue of sustainability, any

corporation in Taiwan has the duty to take its own social responsibility to help

mitigating the environmental and societal problems while striving for the financial

performance. As stated by Huang (2010), CSR development in Taiwan has been

burgeoning and growing, it is still mostly deemed a random or casual activity rather

than an imperative commitment to corporate value and culture. She elaborated that As

CSR initiatives and their context in Taiwan are still at its preliminary stage, there is

very limited literature and data for reference and study.

Nowadays, as declared by Stainer (2006), organizations are required to be

responsible by formulating, implementing and monitoring strategic policies, not just

28

related to globalization, sustainability, demographics and technology but also to social

responsibility. Most of the companies are merely using CSR as strategy for a business

model or just performing their philanthropic duties. Ideally, CSR should be done to

serve the corporate stakeholders, the society and addressing pressing societal issue in

a long term. Investing in business or programs that would serve the stakeholders best,

would eventually create a value based CSR that is not a temporary solution to societal

issue that philanthropic approach. Therefore, a good relationship with stakeholders

should be established and CSR performance should be evaluated. As noted by

Moskowitz in 1972, corporate Social Responsibility Performance can help attract,

retain and motivate employees, resulting in higher productivity and performance. The

Instrumental stakeholder theory also claims that effective management when starting,

developing or maintaining stakeholder relationships will enhance financial

performance (Jones, 1995).

Corporate Social Performance can also contribute to the function of product

differentiation and will attract socially conscious consumers or socially responsive

investors (Kapstein, 2001). In recent years for instance, Social Responsible

Investment (SRI), an investment strategy which seeks to maximize both financial

return and social good, became a booming market in both the US and Europe. Assets

in socially screened portfolios climbed to $2.71 trillion in 2007, an increase over the

$2.16 trillion counted in 2003 according to the Social Investment Forum's 2007

Report on Socially Responsible Investing Trends in the United States. From

2005-2007 alone, SRI assets increased more than 18 percent while the broader

universe of professionally managed assets increased less than 3 percent. As of 2007

about one out of every nine dollars under professional management in the United

States is involved in socially responsible investing—11 percent of the $25.1 trillion in

29

total assets under management tracked in Nelson Information’s Directory of

Investment Managers. Research estimates by financial consultancy Celent predict that

the SRI market in the US will reach $3 trillion by this year, 2011. The European SRI

market grew from €1 trillion in 2005 to €1.6 trillion in 2007.

From approximately 1990 on, the concept of CSR became almost universally

sanctioned and promoted by all constituents in society from governments and

corporations to non-governmental organizations and individual consumers. Even

international organizations (e.g. The United Nations, World Bank, Organization for

Economic Corporation and Development, International Labor Organization) fully

supported and aggressively established guidelines to continue the movement.

According to a study held by US Fortune magazine, of the Fortune 500 companies

traded in 1977, less than half of these companies embraced CSR as an essential

component in their annual reports. However, at the end of 1990, it was discovered that

nearly 90% of the Fortune 500 companies listed CSR as one of the basic elements of

their organizational goals, actively reporting the CSR events held by these

corporations in their annual reports. From this, it is evident that CSR has received

widespread recognition in many large corporations in the USA. In Taiwan, based on

the results of a 2005 study conducted by Global Views Monthly magazine, merely

27.6% of public listed companies released information on their CSR programs. In

2006, this figure rose to 55.3%; as to foreign companies with branch offices in

Taiwan, the number is 64.3%. From these figures, it is evident that CSR has become

an important factor for Taiwanese and foreign corporations and has become the global

trend. Corporate response strategy to CSR or topics in society can be categorized as

reactive, accommodative, defensive and proactive (Carroll, 1979).

30

As strategy signifies the set of opportunities for creating value and deploying

dynamic capabilities to obtain a competitive advantage (Oliver and Holzinger, 2008),

therefore when a company has motives for value creation or maintenance that drive

the decision to undertake stakeholders’ management, there are two ways to receive

the opportunity advantage in managing stakeholder relations; either to aggressively

influence the stake-holder’s demands and expectations, or to respond to the

stakeholder’s demands to create more opportunities for a win-win situation (Oliver

and Holzinger, 2008). Also, some scholars state that CSR performance can be

evaluated by a corporation’s management of stakeholders, because through the

valuable investment made in these stakeholders, a corporation can increase results and

accumulate a competitive advantage (Clarkson, 1995).

The CSR strategies in this paper are based on value perspective (maintain or

creating value) and strategic orientation (aggressively influencing or responding to a

stakeholder’s demands). The motive for a corporate manager is to maintain or create

organizational value, to place policies and response protocols of social responsibility

in order to obtain opportunities for the development of relationships between

organizations and stakeholders (Wood, 1991). Furthermore, organizations with

specific dynamic capability can further increase the effectiveness of CSR strategies

and improve its organizational performance.

Both sustaining the society and environment, and sustaining the enterprise

require balancing acts between long and short-term strategies and among influential

stakeholders (Roberts, 1992; Pirsch et al., 2007). In these days of rapid pace of

technology advances, and uncertain and changing environment of the global market,

business leaders realize that the strategies in the past are becoming less rewarding

31

(Holliday et al., 2002). Therefore, thinking of new ways to grow and prosper becomes

an important issue among the companies which are keen on sustainable development.

Corporate responsibility represents the way for a firm to engage the process of the

sustainable development that aligns the self-interest of the firm with the greater public

good (Hutton et al., 2007). According to Caroll’s dimensions (1981), the foundation

of a responsible company is to be profitable, but not at any cost. Meanwhile, the

society also demands that the company obeys the law, acts in an ethical manner

toward all stakeholders and be a good corporate citizen. The critical question is how a

corporation can integrate sustainable development strategies into the overall strategy

in order to create the core values and as well to enhance its sustainability. Before

studying the “How” question, the “What” question should be answered- “what are the

key factors affecting the sustainability strategies adoption?”(Law, 2010)

In regards to environment, how environmental issues affect the company’s

behavior especially to its profitability especially when CSR is merely a business

model not as a value creation or participatory governance? Klassen and McLaughlin

(1966) mentioned that environmental management has an important influence on a

firm’s financial performance. Stock market performance is one measure how

environmental management improves financial performance. Furthermore, some

believe that environmental management,for example, eliminating waste will reduce

manufacturing cost (Allen 1992, Schmidheiny 1992).

In contrast, poor environmental management, such as pollution problems will

hurt the firm’s stock price, meaning that the market, shareholders or investors expect

its profitability to be lessened (Shane and Spicer 1983). When the market expects high

future costs for pollution management, a negative impact arises (Stevens 1984). As

declared also in the SRA (Sector Risk Analysis) conducted by CoreRating,

32

environmental problems cause the most serious value impact on the company’s

reputation, branding, morale of employees and competencies. Huang (2010)

concluded that environmental management is important and has an influence on the

financial performance of a firm. It creates profits through either market gains or cost

savings. Sustainable development was initially referring to environmental concerns,

and now also compassing social, ethical and economically issues. Sustainability is a

composite of social, economical and environmental issues (Carroll, 1981, 1999; DJSI,

2006). Sustainable development has been defined as “development that meets the

needs of the present without compromising the ability of the future generations to

meet their own needs”.

A growing number of organizations or firms have begun to adopt corporate

responsibility strategies to contribute to sustainable development goals. These

strategies are aimed at aligning the self-interest of the firms with the greater public

good in ways that add value to both the firms and the society. Asian organizations are

far lagging behind those in the West in having supportive policies and sustainable

development strategies (Welford, 2005). Some Asian countries have moved towards

sustainable development (Mental et al., 2007). Asia has been developing itself in

many areas, within the context of sustainable society, new institutions and

collaborations are formed to drive changes. Facing the challenges from the external

environment, namely the market competition and changing needs on sustainability,

companies in the industry also have internal forces driving them towards sustainable

development. These internal forces involve corporate willingness and the mindset of

being socially responsible by taking sustainability into serious consideration. Both

these internal and external forces definitely promote the propagation of the

sustainable development in the industry. (Law, 2009)

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2.3 Why CSR? : CSR in Taiwan Perspective

An organization is a dynamic social system of cooperative interactions and

relationships. At different stages of the life cycle, these relationships change

depending on the combination of relations, bringing the organization opportunities

and threats for survival (Jawahar and McLaughlin, 2001). The resource dependence

theory states that an organization must rely on valuable resources provided by its

environment to ensure continuous operations, therefore the organization will develop

dependence on stakeholders who can provide vital resources and affect its resource

allocation strategy (Gioia, 1999; Jawahar and McLaughlin, 2001). Furthermore, an

organization’s capability of satisfying major stakeholders’ demands is a key factor

that determines whether an organization can constantly survive and maintain its

competitive advantages (Clarkson, 1995). Due to limited resources, corporations must

identify their major stakeholders in the current life cycle (Agle et al.,1999; Jawahar

and McLaughlin, 2001) and take the step to form an aggressive response strategy

(Jawahar and McLaughlin, 2001). In other words, when an organization’s resource

dependence on certain groups increases, their influence on the company also increases

(Frooman, 1999), hence managers will give greater attention and priority to resource

allocation (Agle et al.,1999).

The high-end electronic market in Asia has been growing in recent years. For

instance, in 2006, the consumer electronics market has grown by has grown by 15.3%,

reaching $54 billion in the Asia Pacific region and by 5%, reaching $3.2 billion in

Taiwan alone. The Asia Pacific region comprises developed and emerging countries

such as Australia, China, Japan, India, Singapore, South Korea, Thailand, Vietnam

and Taiwan, etc. The market values are forecasted to continue to grow (Taiwan by

34

21% and China by 55%), (Datamonitor Industry Profile, 2007). In terms of production

value, Taiwan ranked among the top three producers worldwide for more than 30

products in 2002. The annual change in unit percentage of high-tech manufacturing

(computer-related 27%, components and electronics 19%) shows the prominent and

continual growth of high-tech manufacturing as at 2008 (Department of Statistics,

Ministry of Economic Affairs, Taiwan). The overall production value of the country’s

IC design houses makes up 28 percent of the world share, slightly behind that of the

United States. Meanwhile, leading international firms including Apple, Dell, Fujitsu,

Hewlett Packard, IBM, Siemens, Sony, and Toshiba have all fostered close

partnerships with Taiwan’s enterprises. In addition to their outsourcing and

components procurement businesses, many of them have moved to set up research

and development (R&D) centers in Taiwan.

Taiwan’s industrial development model has mainly focused on original

equipment manufacturing (OEM) and original design manufacturing (ODM). The

OEM or ODM business, rather than producing brand-name products weakens its

competitiveness in the global market. In face of growing market competition, many

domestic high-tech companies are recognizing the importance of innovation by

increasing their investments in related activities. Increasing competition due to trade

globalization forces firms either to put more effort in reducing production costs or

improving productivity. High-tech manufacturers must be able to advance in response

of these fast-pace changes in technology and demand. The operation in the high-tech

industry requires highly sophisticated technologies, skilled labour force and

knowledge in specific technology. The existing practice and know-how of staff may

not fit well into the new environment (Ruigrok and Wagner, 2003). These high-tech

companies need to provide supportive resources and infrastructure to cope with these

changing needs (Silva, 2008). Supportive initiatives and measures are required for

35

both sustainability and competitiveness.

Sustainable development continues to arouse attentions from business leaders.

By definition, sustainable development is to meet the needs of the present without

compromising the ability of the future generations to meet their own needs (Hutton et

al., 2007; World Commission on Environment and Development, 1987; World

Business Council for Sustainable Development, 2002). Business leaders have to strike

a balance between sustaining the planet, society, and sustaining the business.

A company has an obligation to provide a short-term and a long-term value to

shareholders. Corporate social responsibility (CSR) is an obligation both now and into

the future (Hutton et al., 2007). However, business leaders who pay too much

attention to philanthropy or social issues may neglect the primary reason for their

existence and profitability (Murphy, 1994). Activities one constituency finds

acceptable or appropriate may be viewed as undesirable or immoral by another. As a

result, organizations need to develop a clear understanding of the multi-dimensional

constructs of sustainability in order to fight for the balance between profitability and

sustainable development issues.

In the case of Taiwan, for Fang, et. al (2009), they concluded in their paper that,

CSR in Taiwanese society is still in its infancy. Their study has chosen local cases

that have successfully executed CSR response strategies, making them instrumental

examples which focus on the development of theory framework and hold conclusions

that support the propositions in this paper (Creswell, 1998). In other words, using the

case studies of benchmark corporations not only aids in the promotion of the budding

CSR concept in a society, but also serves as a good reference point for corporations

36

seeking to execute CSR. Also, issues on corporate culture can be included to explore

the influence of various cultures on the effectiveness of CSR strategies. These

directions will pave the way in helping us understand the differences in effectiveness

of CSR promotion across corporations.

37

Chapter III

Methodology

Addressing a societal issue is a collective agenda and actions should be taken in

a collective effort. Giving the question of sustainability and the preservation of the

mother Earth as one of the issue, would a policy make a difference in addressing it?

How a policy would be transformed into an efficient action in addressing this issue?

How would the stakeholders participate in the call for action?

In answering these queries, one may think of how the shareholders particularly

the corporate sector participates in this agenda and how it will create an impact on

improving the lives of the society. This leads to the scrutinization of the Corporate

Social Responsibility, the corporate channel of social involvement and a method of

addressing a collective agenda. In this research, which is entitled, “Analyzing the

Corporate response to the Taiwan Sustainable Energy Policy Framework through

Corporate Social Responsibility: The AsusTek case,” the paper tried to answer the

questions through practical observations and careful analysis.

According to Williams, et.al, (2008) the field of empirical CSR research

generally has been hampered by the lack of a consistent definition of the construct of

CSR, as well as its operationalization and measurement. This lack of consistency of

CSR definitions across studies makes it difficult to evaluate and compare the findings

from different studies because they usually refer to different dimensions of CSR.

Most research on CSR has focused on the consequences of CSR implementation—or

lack of implementation—on financial performance with little attention to comparative

issues

38

Fig. 3.1 The Roots of Competitive Advantage

(Source: Hill and Jones, 2008. Strategic Management Theory, p.110)

As analyzed by Porter and Kramer (2006), there are two main categories for CSR

activities, which are responsive CSR and Strategic CSR. A responsive CSR is to act

as a good citizen and mitigate the harm resulted from its daily business activities.

These, as mentioned above, might be deemed by entrepreneurs as a waste of capital

and bring very limited benefit to the company and society. While on the other hand,

strategic CSR can contribute to greater tangible business benefit.

Hill and Jones (2008) define a strategy as “the related actions that managers

adopt to increase the company performance by developing new resources and

capabilities or enhancing the existing resources and capabilities which build up its

distinctive competencies”. The distinctive competencies will enable the firms to shape

up their own functional strategies with superior efficiency, quality, innovation and

customer responsiveness to outperform their competitors either cost-wise or through

differentiation that leads to value creation and Superior profitability. The context of

CSR strategy in question involves the dependence of corporate success on the

relations and interactions between an organization and its stakeholders. For instance,

failure of the industry to satisfy consumer demand or to provide acceptable pricing for

39

safe products and the corresponding post-sale service will result in the collapse of

consumer confidence. Also as part of the international supply chain, companies risk

losing regular orders if they fail to meet environmental regulations required by

downstream customers or are unable to respond more expeditiously than their

competitors. Therefore, corporations must enhance their dynamic capabilities to meet

the changing demands of their various stakeholders. Second, dynamic capabilities also

stress the importance to enhance the productivity of other resources that a firm

possesses in order to increase profitability (Makadok, 2001).

According to Heslin and Ochoa (2008), both responsive CSR and strategic CSR

will affect the business prosperity through the 5 key drivers: growth in market share,

organizational learning, committed and engaged employees, external stakeholders,

financing and investor relations. The closer the social business strategy is related to a

company’s business, the greater it will lever the company’s resources and competency,

and benefit society at the same time.

The research focused more on the responsive CSR of ASUSTek. In 2000, ASUS

officially launched Green ASUS; a company-wide sustainable computing initiative

overseen by a steering committee led by Jonney Shih, the Chairman of ASUSTek

Computer Inc. Green ASUS pursues what the company calls the "Four Green Home

Runs", namely: "Green Design, Green Procurement, Green Manufacturing, and Green

Service and Marketing". Being the first computer company in Taiwan to receive the

Carbon Footprint on its produced computers, ASUS became the leading name for the

so called “sustainable computers”.

The research constructed three main points for assessing ASUS response to the

40

Taiwan Sustainable Energy Policy Framework.

1. The energy efficiency of ASUS produced computers and monitors and how it

contributes to the main goal of the policy that is energy efficient yet

sustainable. A review of material provided by ASUS CSR Specialist Mr.

Frank Lin provided some insights on how the company’s product contributes

to the sustainable energy efficiency. Using a database of ASUS on their

products, the paper was able to derived quantitative data to support the

company’s statement on their corporate social responsibility statement.

2. A Comparative analysis on the CSR Sustainability policy of other computer

company. The paper used ACER to compare ASUS among local companies,

Dell, Apple and Toshiba for international ones. On the comparative section, a

graph was presented showing the compliance to both companies specifically

to ISO certification 14001, ISO certification 9001/9002, and Eco-Labels. A

thorough discussion of the companies’ respective CSR policies and projects

were also discussed and were given commentaries and analysis.

3. The impact of environmental CSR of ASUS to the society. This will include a

literature review on ASUS CSR on environment programs such as

Eco-Products, Regulation Compliance, Product Recycling and End of life

Management and Green house gas Management. This will also include

commentaries on these programs and how these programs support or comply

with the government’s policy on sustainability.

41

Fig. 3.2 Dimension of the Research Design

In principle, basing on the product as well as the effectiveness of the programs

implemented of ASUS in response to the sustainability policy of Taiwan would give

us the idea on how a certain company, ASUSTek in particular would comply to the

call of government. Whether the intention is more of the Strategic CSR rather than

Responsive CSR, we can clearly see how CSR would serve as a channel for

public-private partnership thus creating participatory governance among the

stakeholders.

42

Fig. 3.3 Dimension of Research Concept

This study aims to analyze the corporate response using CSR on the public

policy. This research then is all about corporate and political interaction and fostering

an inter-organizational cooperation. This study then will further observe and study the

behavior of business towards a public policy and also the behavior of interaction.

With these, Corporate Social Responsibility will be used as a methodology in the

study of behaviors of stakeholders and how these stakeholders interact with the

government. The concept of this research then not only analyzing the corporate

response but also creating a new concept of participatory governance though business

and government interaction via collective actions in addressing a collective agenda.

43

Fig. 3.4 Research Process Flow

This paper is basically employs qualitative method. The paper, with the data

gathered through interview, literature review and literature comparison and discussion,

the paper was able to analyze and describe on how ASUS responded to the

Sustainable Energy policy. The idea why ASUS performs a dynamic and competitive

CSR, in this paper, was due to two motivating factors. (See fig. 3.4)

Analyzing the two factors lead the ground for investigating why ASUS would

perform much in CSR, in sustainable development specifically. This would be the

basis for balancing the argument why a company complies. Is it because of these

factors or really the sincerity of the company in responding to the national agenda?

The two factors were balanced and were used in considering the conclusions for the

findings of this paper.

44

Motivating Factors

Corporate Factors:

Business Strategy

Company Branding

Governmental Factors:

Policy Compliance

Cooperation

Fig. 3.5 “The factors that affects the ASUS CSR”

The call for compliance

A normative theory of law includes the ethics of legislation and

adjudication. The latter is the focus of theoretical interest, as we saw. However,

it also includes the ethics of enforcement (from the police and executive point

of view) and compliance (from the citizen point of view). We will not say

much about the ethics of enforcement (not every law has to be enforced and

the costs and choices make it essentially a utilitarian issue). Our concern is

with the obligation to obey the law. The question is not about the legal

obligation because that is what adjudication determines. The question is about

whether there is a moral obligation to obey the law - here we mean the law as

correctly interpreted (using the inner moral principles of the law).

We might think that since we morally interpret law, we should naturally

have a moral obligation to obey it. However, it is not that simple. What we

have been justifying is the rule of law and the standards for interpretation. We

Corporate Social

Responsibility

� Sustainable

Development

� Environmental

Protection

45

have accepted that our definition is one that ought to justify fidelity to law and

thus amounts to a moral justification of the rule of law. Having fidelity to law

involves commitment to support the institution of the rule of law. Now given

that we ought to support and defend the institution, does that mean we each

have a moral obligation to obey each and every law? Do we have a moral

obligation to obey any law, per se?

46

Chapter IV

Data Analysis

4.1 ASUS Eco Products and it’s Labelling

Since 2000, ASUS has dedicated itself to environmental protection and has

initiated Green ASUS as its sustainability drive. They have included international

regulations and directives such as Restriction on Hazardous Substance (RoHS), Waste

Electrical and Electronic Equipment (WEEE), Energy Using Product (EuP)

regulations as well as standards of various international eco labels into our technical

standards. Therefore, the Research and Development (R&D) engineer could refer to

the technical standards at the product design stage so that the product could meet both

requirements of eco label and of the green public procurement.

Eco label and environmental declaration are worldwide environmental

management tools designed to pursue green consumption and to provide consumers

the opportunity to purchase environmentally friendly products, as well as leading

manufacturers to develop and produce environmental friendly products in response to

market demand. Different from eco label, in order to claim Environmental Product

Declaration (EPD) for a product, Life Cycle Inventory (LCI) is required to quantify

the environmental impacts of a product in each stage throughout the life cycle of the

product, and the data has to be verified by an independent third party and be published.

ASUS follows ISO 14025 to implement LCI for N51 notebook computer, and the

product receives the world’s first EPD certificate for notebook computer in September,

2009. Obtaining EPD certificate could help consumers to objectively compare the

environmental performance among products and purchase products with lower

environmental impacts, and it could also provide data throughout the product life

47

cycle to manufacturer for further improvement in environmental performance.

4.1 (A) Electronics Products Environmental

Assessment Tool (EPEAT)

The Electronics Products Environmental Assessment Tool (EPEAT) is an

easy-to-use environmental procurement tool for purchasers to identify

environmentally preferable desktops, notebooks and monitors. EPEAT is a

purchasing system featuring products that meet a stringent set of environmental

criteria. Products are ranked 'Gold', 'Silver' and 'Bronze' depending on how many

green criteria they meet. EPEAT verifies registered products to ensure they comply

with the Standard. EPEAT also offers a calculator for precisely measuring

environmental benefits. EPEAT evaluates electronic products according to three

tiers of environmental performance – Bronze, Silver and Gold. The complete set of

performance criteria includes 23 required criteria and 28 optional criteria in 8

categories. According to the numbers of criteria meet, the registered product will be

evaluated to the appropriate tier. EPEAT evaluates 8 environmental categories:

1. Reduction or Elimination of Sensitive Materials

2. Materials Selection

3. Design for End of Life

4. Product Longevity/Life Cycle Extension

5. Energy Conservation

6. End of Life Management

7. Corporate Performance

8. Packaging

48

EeePC Notebooks Monitors Integrated Computers

T101MT U30Jc

(Eee PC Super 10D) (Series:U30J, PRO33J) VW247N

All-in-One PC

ET2400INT

1011PX UL30JT

(Series: R011PX) (Series: UL30J, PRO32J,

PL30JT)

VE208D All-in-One PC

ET2400IT

1015PX

(Series: R051PX)

B43E VE208N All-in-One PC

ET1611PUT

B43S VW199SR EeeTop PC ET1610PT

(Series:ET10B)

B53E VB198T All-in-one PC ET2011E

B53S All-in-one PC

ET2011EG

K53E

(Series: X53E)

All-in-one PC

ET2011EGT

P53E All-in-one PC

ET2011ET

Table 4.1 ASUS Product with EPEAT Gold (Taiwan)

(Source: http://csr.asus.com/english/index.aspx#41)

4.1 (B) The EU Flower

Over the past ten years, the "Flower" has become a European-wide symbol

for products, providing simple and accurate guidance to consumers. All products

bearing the "Flower" have been checked by independent bodies for complying

with strict ecological and performance criteria.

While few human activities are completely 'environmentally friendly', there

49

are always opportunities to reduce the impact that certain products have upon the

environment. To establish a standard to reduce environmental impact, the EU

Flower program developed a set of environmental and performance criteria for

judging products based on all aspects of a product's life, from its production and

use to its eventual disposal. The key requirements to achieve the EU Flower

include:

1. Consumes less energy during use and standby

2. Contains less substances that are dangerous for health and the environment

3. A free take-back service is provided by the manufacturer after use

4. Designed for easily disassembly and recyclability

5. Increased product durability through upgrades

6. Batteries are efficient and less polluting

4.1 (C) The US Energy Star

Energy Star is a joint program of the U.S. Environmental Protection Agency

and the U.S. Department of Energy helping us all save money and protect the

environment through energy efficient products and practices. ASUS has launched

products complied with ENERGY STAR, and many products are more energy

efficient than the standard:

1. LCD in on mode in general performs 27.4% better than the standard, and

VW199 performs 52% better than the standard.

(according to Energy Star Requirement for display V5.0, test at 115V)

50

2. NB performs 27.8% better than the standard, and K52JE performs 58.5% better

than the standard.

(according to Energy Star Requirement for computer V5.0, test at 115V)

3. DT performs 23.8% better than the standard, and CS6110 performs 50.8%

better than the standard.

(according to Energy Star Requirement for computer V5.0, test at 115V)

4. Eee PC performs 38.2% better than the standard, Eee PC 1001PG performs

59.3% better than the standard.

(according to Energy Star Requirement for computer V5.0, test at 115V)

5. Eee BOX performs 61.8% better than the standard, Eee BOX EB1002 performs

73.6% better than the standard.

(according to Energy Star Requirement for computer V5.0, test at 115V)

6. Eee TOP performs 45.4% better than the standard, Eee TOP ET1610P performs

71.4% better than the standard.

(according to Energy Star Requirement for computer V5.0, test at 115V)

4.1 (D) Taiwan Green Mark

TheGreen Mark logo comprises a green sphere enwrapped in a green tree leaf.

The green leaf represents the green consumerism while the green sphere

symbolizes a clean and unpolluted Earth. The Green Mark shows that green

consumerism is a worldwide concept, which could achieve the environmental goal

of "product recycling, pollution reduction and energy saving" if it is universally

promoted and recognized.

51

4.1 (E) Taiwan Product Carbon Footprint

Label

Carbon Footprint Label is a marking that indicates the carbon emissions

during a business service or product life cycle assessment. To strengthen the

competitiveness of low carbon market, Taiwan's government announced "Taiwan

Carbon Label" icon in December 2009, published the relevant operating standards

for Taiwan Carbon Label and began to accept the application in 2010. After ASUS

N51V notebook was awarded the world's first Carbon Footprint Certificate for

notebook by DNV in 2009, N51V also is qualified for Taiwan Carbon Footprint

Label.

Other eco labels ASUS achieved for their products were Japan Eco-Mark,

which is in accordance with the standard and principle ISO 14020 (An

environmental label and declaration, a general principle) and ISO 14024 (An

environmental label and declaration, a type I environmental-label display, a

52

principle and procedure) and Korea Eco label, evaluates a product based on the

following key requirements:

1. Common Criteria

2. Environmental Criteria

3. Noise Emission

4. Power Consumption

5. Use of Chemical Substances

6. Recyclability of the Product

7. Lifespan Extension

8. Quality Criteria

9. Information for Consumers

4.2 Carbon Footprint (PAS 2050 & ISO 14067)

A"carbon footprint" is the total set of direct and indirect greenhouse gas

(GHG) emissions caused by an individual, event, organization or product. At

product level, each stage of the product life cycle, including materials,

manufacturing, using, transportation, and disposal, will emit greenhouse gas

emissions. We can get the "carbon footprint" of a product by calculating the total of

direct and indirect greenhouse gases throughout its product life cycle. ASUS

follows BSI PAS 2050:2008 and ISO 14067-1(CD):2010 to implement Life Cycle

Inventory (LCI) for N51V notebook computer, and the process and data are

verified by Det Norske Veritas (DNV). ASUS N51 notebook computer receives the

world's first carbon footprint certificate that is verified according to PAS

53

2050:2008 and ISO 14067-1(CD):2010 at the same time.

To reduce the carbon footprint of the product, ASUS further analyzes the

GHG inventory of N51V, and then adopt eco-design to introduce U53Jc notebooks

- a Bamboo notebook computer with the concept of green innovation. The top

cover and the keyboard layout of U53Jc use natural bamboo to replace plastic

materials, and the notebook are equipped with ASUS' exclusive energy saving

technology Super Hybrid Engine (SHE). ASUS attempt to reduce the carbon

footprint of products carbon footprint of the product by material replacement and

improvement in energy efficiency.

The effort of ASUS to improve their product basing on their sustainable

principle in compliance to CSR. ASUS continues to invest in research,

development and manufacturing of the finest consumer technology products in the

world. Reliability, quality, performance and environmental responsibility remain

front and center, with a forward-thinking philosophy that guarantees sustainable

growth and ever-improved tools.

4.3 The ASUS CSR Comparison

On the comparative section, a graph was presented showing the compliance to

both companies specifically to ISO certification 14001, ISO certification

9001/9002, and Eco-Labels. A thorough discussion of the companies’ respective

CSR policies and projects were also discussed and were given commentaries and

analysis. ISO 14001 relates to environmental issues. Although it is a system

standard, it requires organization to identify and assess environmental aspects and

54

take necessary control to reduce environmental impacts. Many organizations need

to put efforts to take all additional environmental tasks so that they employ ISO

14001 consultancy firms to solve the technical environmental issues. Training is the

first step of implement ISO 14001 and then organization needs to consider

ISO14001 consultancy. ISO 9001 on the other hand is an international standard that

gives requirements for an organization’s quality management system (QMS).

4.3 (A) ASUS versus ACER (Taiwan

Comparison)

Acer Incorporated’s principal activities are to develop market and sell

computer workstations, PC servers, business desktops, computer-related

components and software. The company claims to be the world’s number 4 ranking

vendor for PCs and notebooks after Dell, HP and Lenovo (Acer Inc, 2006). Its

other activities include repair services of Acer brand products, investing, financing,

construction, and provision of internet, electronics services and information

storage.(van Dijk, 2007)

Acer recognizes the importance of Corporate Social Responsibility by stating:

“As an ethical and responsible enterprise, Acer believes in building a

people-friendly environment that cultivates innovative thinking, and in creating a

sustainable company while providing positive contributions to society. We regard

the interests of our customers, employees and shareholders with foremost

importance. With company growth and profitability achieved, Acer holds to the

spirit of giving back to the society that sustains it and is committed to

implementing CSR for sustainable operations.”

(http://global.acer.com/about/sustainability.htm, June 29, 2011)

55

Acer’s interest in CSR is very recent and seems to focus predominantly on

environmental issues. Only in 2005, Acer published its first Corporate

Environmental Report. The report mainly focuses on the environmental

performance of Acer while human and labor rights are hardly addressed.( van Dijk,

2007)

6According to the company, Acer's global operation, spanning across Europe,

Middle East, Africa, the Americas, Greater China and the Asia Pacific, is devoted

to:

1. Ensuring that its products and operations meet all applicable environmental

regulatory requirements.

2. Selecting technologies that minimize harmful, non-environmentally sensitive

materials; conserve energy; and are recyclable.

3. Saving energies, preventing pollution, minimizing and recycling discards in its

daily operations.

4. Promoting awareness of its environmental policy among employees and

partners in our supply chain.

5. Building an Environmental Management System (EMS) to continually

monitor and improve activities.

56

ISO 14001

Certification

( company policy)

ISO 9001/9002

Certification

(company policy)

Eco-Labels

ASUS yes yes Energy Star, EU

Flower, Taiwan Green

Mark, EPEAT

ACER yes yes Energy Star, EPEAT

Table 4.2 The ASUS and ACER Green CSR Comparison

Acer is an ISO 9001 and 14001 certified company. Also all of Acer’s tier-one

suppliers have acquired ISO 14001 certification. Acer states that it adheres to the

EU Directive on the restriction of hazardous substances (RoHS) by prohibiting the

use of lead, cadmium, mercury, hexavalent chromium and brominated flame

retardants PBB and PBDE. On January 1, 2006, all Acer products will comply with

the RoHS Directive. On August, 2005, according to the company, all Acer

operations and products comply with the EU Directive on Waste Electrical &

Electronic Equipment (WEEE). Acer is a partner of the EPA Energy Star program,

through which companies and organisations aim to complete successful

whole-building energy efficiency upgrades.

Commentary:

Like ASUS, Acer is one of Taiwan’s biggest computer manufacturers. The

company is considered as ASUS’s strongest rival among the local computer

57

industries in comparison of quality, sales and products. Given the fact that both

these computer industries have many things in common, what makes it different is

its “company branding”. ASUS’ would create its own name that would create an

impression on its users and also non users. By creating a CSR, companies’ would

be able to reach the social level which is not exclusively users alone. Taking the

case of Acer’s effort in answering the call, by joining sustainability programs and

or by complying with sustainability policy, a company could make a trade marking

not only on their products but for their company’s image as well. Acer unlike

ASUS, is a member of Electronic Industry Code of Conduct, that serves as a

standard for company to create corporate ethics.

4.3 (B) ASUS versus Toshiba (International

Comparison/ Japan)

7Toshiba Corporation is a Japanese high-technology electrical and electronics

manufacturing firm, headquartered in Tokyo, Japan. It is the 7th largest integrated

manufacturer of electric and electronic equipment in the world.

8Toshiba presents clear information on its attitude towards Corporate Social

Responsibility (CRS) in its annual report and website: “Toshiba Group positions

Corporate Social Responsibility activities as main pillar for management. To earn

the trust of society, our business activities must be fair. Toshiba Group places the

highest priority on “human life and safety” and “legal compliance” throughout our

business activities.”

9In addition to social elements, Toshiba’s procurement policy also contains

guidelines on environmental demands on suppliers:

58

1. Suppliers are encouraged to adopt ISO 14001-based environmental

management systems and to promote third-party certification.

2. Suppliers are encouraged to utilize Green Procurement, which provides for the

procurement of parts and materials that have the smallest negative impact on

the environment. Suppliers are also encouraged to reduce or eliminate use of

potentially hazardous substances.

3. Suppliers are encouraged to promote environmental protection activities, such

as, the establishment of positive environmental policies, the improvement of

systems that affect the environment and to provide training opportunities in

the area.

Toshiba’s Green Procurement Details provide further information on the

company’s environmental policy towards suppliers. Green procurement mainly

implies that Toshiba prefer procurement from suppliers that are promoting

environmental activities (mainly (intention to) adoption of the ISO 14001

certification) and of intermediates that have minimal environmental impact

.

59

Table 4.3 ASUS and Toshiba Green CSR Comparison

ISO 14001

Certification

ISO 9001/9002

Certification

Eco-Labels

ASUS yes yes Energy Star, EU

Flower, Taiwan Green

Mark, EPEAT

TOSHIBA Not specified though

preferred certified

suppliers

Not specified though

preferred certified

suppliers

Not specified

Toshiba Group has developed Environmental Vision 2050, a corporate vision

that envisages affluent lifestyles in harmony with the Earth as an ideal situation of

mankind in 2050, and will work to realize this vision.

Throughout the life cycle of products from manufacture and use to reuse and

recycling, Toshiba Group will strive to provide safer and more comfortable lifestyles

and create enriched value for customers. The Group will also strive for harmony with

the Earth by working to mitigate climate change, using resources efficiently, and

managing chemicals, the three pillars of its environmental management system.

Commentary:

Toshiba is one of the leading Asian companies in the computer industry. Taking

ASUS as a subject to compare, we can see that Toshiba developed its CSR out of the

norms of the usually “standard” form that is adhering to the international standards

that CSR should follow. From this point of analysis, Toshiba deviated from the

60

common CSR tradition of following certain rules or achieving CSR recognition to

prove its CSR competency. What remains then is the idea on how sincere a CSR

program can be? Toshiba, created its own CSR vision using their own criteria without

basing into merit-base CSR or publicity CSR. It doesn’t mean that merit-base CSR or

publicity is bad but Toshiba, in comparison to ASUS, we can projéct a CSR out of

standard compliance as a corporate policy but rather a corporate policy that creates a

compliance to optional standards.

4.3 (C) ASUS versus DELL (International

Comparison / USA)

Dell Inc. is an American computer hardware company based in Round Rock,

Texas. During 2005 Dell was the number one supplier of personal computer systems

(PCs) worldwide as well as in the United States. Dell’s founder, Michael Dell,

pioneered the direct-to-consumer sales model for computers. Dell has completely

abandoned retail stores and sells all its custom-assembled PCs directly to consumers

by mail order, allowing for higher flexibility, lower inventories, lower costs, and

higher profit margins. A second feature of Dell is the Wintel platform (Microsoft

Windows operating system and Intel microprocessor), which characterizes its PCs.

Although Dell has exclusively used Intel chips in its computer systems in 2006 the

company announced plans to use chips from AMD in some of its high-end servers.

(van Dijk, 2007)

10Dell’s website contains clear statements on its CRS policy: “As a company

with an extensive global supply chain, we recognize that we have a responsibility to

work with our suppliers to promote sustainable environmental practices, the health

and safety of people and fundamental human rights and dignity.”

61

Dell's environmental policy consists of the following objectives:

1. Design products with the environment in mind: reducing energy consumption

and avoiding environmentally sensitive materials

2. Prevent waste and pollution: waste minimization, recycling ad pollution

prevention

3. Continually improve performance: implementation of environmental

management system

4. Demonstrate responsibility to stakeholders: communication and engagement of

stakeholders

5. Comply with the law: comply with environmental laws and meet commitments

with voluntary environmental programs.

ISO 14001

Certification

ISO 9001/9002

Certification

Eco-Labels

ASUS yes yes Energy Star, EU

Flower, Taiwan Green

Mark, EPEAT

DELL Yes (along with

suppliers)

Yes (along with

suppliers)

Energy Star, EPEAT,

Blue Angel, TCO

Table 4.4 ASUS and Dell Green CSR Comparison

Dell requires that its suppliers are compliant with ISO 14001 certification or

62

submit a schedule for achieving certification. According to information in the

sustainability report 98 percent of the target suppliers (i.e. top 80 percent spend with

focus in China) achieved or maintained the ISO 14001 certification in the fiscal year

2006. Dell has actively participated in the Environmental Protection Agency (EPA)

Energy Star program for more than a decade. It states that many of its desktops and

notebooks now exceed the current levels set by the EPA for energy efficiency. Finally,

Dell actively participates in a number of environmental standards. (van Dijk, 2007)

Commentary:

Comparing to ASUS, Dell can be perceived as a corporate achiever in terms of

sustainability. Like ASUS, Dell complied with standards and requirements by creating

programs and maintaining product sustainability. Dell is a good comparison between

local CSR compliance by ASUS and US CSR compliance by Dell. We can perceive

the CSR compliance in the US system. In the case of Taiwan where CSR is not a

trend when formulating corporate policy, Dell CSR can be a good model for

international companies in creating their corporate social responsibility policy.

4.3 (D) ASUS versus Apple (International

Comparison/ USA)

Apple Computer, Inc. is an American computer technology corporation

headquartered in Cupertino, California. It develops, sells, and supports a variety of

electronic products including personal computers, portable media players, computer

software, and computer hardware accessories. The company's most well known

products include the Macintosh line of personal computers, the Mac OS X operating

system, the iPod portable music player, and the iTunes Music Store. Apple

63

Computer's desktop and laptop computers include its Mac mini, iMac, and MacBook

for the consumer and education markets, and more powerful Power Mac and

MacBook Pro for high-end consumers and professionals involved in design and

publishing.

Apple does not publish a separate CSR report. It also does not provide a ‘glossy’

annual report for its shareholders. Instead one can download a copy of the Form 10-K,

the annual report required by the U.S. Securities and Exchange Commission. The

10-K includes information such as company history, organizational structure,

executive compensation, equity, subsidiaries, and audited financial statements, among

other information. However, in the case of Apple, it does not contain information on

CSR issues. In this respect two documents are relevant:

(1) Ethics, Apple’s company code of conduct, which deals, among others with

corporate governance, information disclosure, environmental health and safety, and

procurement;

(2) The Apple Supplier Code of Conduct, which in particular deals with working

conditions of suppliers. (van Dijk, 2007)

Apple has adopted the precautionary approach and claims that throughout the

complete production process, from design through manufacturing, use and recycling,

it ensures that its products and activities are environmentally sound. It focuses on four

areas: product design, manufacturing, energy efficiency and recycling. Since 2001 all

Apple computers and displays have earned the Energy Star Rating. Apple states that

their manufacturing sites are certified to the ISO 14001 standard. As noted on

www.apple.com/environment: ’Apple’s manufacturing site is certified to the ISO

14001 standard, which helps companies manage environmental impacts in an

integrated, systematic way’. It is however not clear which manufacturing sites have

obtained certification. Apple claims that all its products are RhoS compliant.

64

ISO 14001

Certification

ISO 9001/9002

Certification

Eco-Labels

ASUS yes yes Energy Star, EU

Flower, Taiwan Green

Mark, EPEAT

APPLE yes Not specified Energy Star, TCO

Table 4.5 ASUS and Apple Green CSR Comparison

According to Apple, for more than 20 years, Apple has been working on ways to

minimize the impact the company and their products have on the environment.

They’ve developed and formulated the company’s first environmental policy in 1990,

and every year since then, they’ve continued to make the company products more

energy efficient, eliminated many toxic substances, and embraced renewable energy

in their facilities. In 2009, they became the first company in the industry to report

comprehensive calculations of the company’s total carbon footprint including

environmental reports for every product giving the public an opportunity to judge

Apple’s efforts and track its progress in detail.

Commentary:

Apple is one of the top computer companies in the world given the fact of its

uniqueness in design, software and format. Like Dell and ASUS, Apple complied and

achieved much in the field of the so called Green CSR. The only difference is that

Apple CSR is not well published since Apple’s branding was overshadowed by “it’s

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Apple” tag. In this case, we can assume that CSR of Apple is either a mere trend or

just to say that the company complies or got a CSR program in order to be in the

corporate tradition to have a CSR.

4.3 (E) ASUS Comparison as a whole

To consolidate all the ASUS comparison from 4 companies, we can see the table

below (see Table 4.6). Notice that the US Energy Star and the EU EPEAT were the

most present among the eco labels, while Swede TCO is both present to US computer

companies of DELL and Apple. Majority of the 5 compared industries had

incorporated ISO’s 140001 and 9001/9002 certification as a part of their corporate

policy and a requirement for their suppliers.

ISO 140001 ISO 9001/9002 Energy Star EPEAT Other label

ASUS Ya Ya � � �

ACER Ya Ya � � =

TOSHIBA Yb Yb = = =

DELL Ya Ya � � �

APPLE Ya X � = �

Ya= ISO certification incorporated in the corporate policy and suppliers

Yb= ISO certification required to suppliers

X= not incorporated nor unspecified

Table 4.6 Matrix of Comparison

The voluntary compliance of the companies to ISO 14001, contributes to the

effort of lessening the threat to environment amidst the challenge of development. The

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involvement of procedures and supply chain to create a criterion for quality and

sustainability through ISO 9001/9002, though voluntary assures the participation of

the corporate sector as a stakeholder in this social agenda. Sustainable development

has been widely considered as an important issue in the high-tech industry.

Sustainable development was initially referring to environmental concerns, and

now also compassing social, ethical and economically issues. Sustainability is a

composite of social, economical and environmental issues (Carroll, 1981, 1999; DJSI,

2006). Sustainable development has been defined as “development that meets the

needs of the present without compromising the ability of the future generations to

meet their own needs”. (Law, 2010)

According to Law, 2010, a growing number of organizations or firms have begun

to adopt corporate responsibility strategies to contribute to sustainable development

goals. These strategies are aimed at aligning the self-interest of the firms with the

greater public good in ways that add value to both the firms and the society. Asian

organizations are far lagging behind those in the West in having supportive policies

and sustainable development strategies (Welford, 2005). Some Asian countries have

moved towards sustainable development (Mental et al., 2007). Asia has been

developing itself in many areas, within the context of sustainable society, new

institutions and collaborations are formed to drive changes.

Although some companies don’t incorporate environmental standards in their

corporate policy, some of them require their contractors to adhere thus forming the so

called “Green Logistics” and “Green Outsourcing”. In the case of Toshiba for

instance where they require their suppliers to adhere in some of the environmental

standards such as ISO 14000 and others. For Apple computers for example, Taiwan’s

Chimei Innolux (CMI) expecting to open a transaction with Apple for their LCD’s.

CMI, incorporate both ISO 14000 and ISO 9001 in their corporate policy.

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4.4 Green ASUS and its Impact

The publishing of Corporate Social and Environmental reports aims at

demonstrating ASUS' commitment towards stakeholder communication and data

transparency. In 2005, ASUS published the first Environmental, Health and Safety

Report. In 2007, ASUS was honored to present the first Environmental Sustainability

Report. In 2008, they release their first English Corporate Sustainability Report that

follows the Sustainability Reporting Guidelines v3.0 (G3) defined by Global

Reporting Initiative (GRI). The reports aim to shows details on ASUS's global

activities, which contribute to sustainable developments. In 2009, ASUS release the

Corporate Sustainability Report which follows the Global Reporting Initiative (GRI)

G3 guidelines and receives the GRI-checked Application Level B icon. Furthermore,

in 2010, ASUS achieves the highest Application Level A and also receives the

GRI-checked Application Level A icon. ASUS will continuously improve and

disclose more achievements in corporate social responsibility efforts in the future.

ASUS has a full-time environmental health and safety team that is responsible

for company-wide environmental security management. The team assesses the

environmental impact arose from company's activities to make sure the company meet

environmental regulations and government-related environmental requirements and

continues to promote the improvement plan, thereby lowering the environmental

impact to the minimum, moving towards "zero-pollution" goal.

Each site is equipped with an independent sewage treatment plant. The disposal

and handling procedures of sewage are in accordance with relevant provisions, thus in

complied with environmental regulations. The main source of wastewater is from

office use. The wastewater will not pollute the surrounding surface water for it is

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processed through the sewage treatment system and the effluent meets the discharge

standards. Designated members are responsible for the set up and maintenance of the

sewage treatment plant to ensure that all equipments and processes are in the best

condition. ASUS also assign an external environmental agency to perform the quality

check of the effluent water periodically and hold a committee meeting to review and

monitor the wastewater management. The government also conducts random audits to

avoid the environmental impact brought by effluents.

ASUSTek commits to reduce 15% of the GHG emissions associated with energy

use by 2015 (based on 2008 level). As one of the world's leading computer brands,

ASUS is willing to devote itself to climate change issue and promote energy saving

and carbon reduction based on “no regret policy”. Since 2004, ASUS has required the

manufacture sites to implement energy saving project, and in 2005 we saved about

11% of electricity used in manufacture sites in Taiwan. After ASUS had announced

spin off OEM and Brand in January 2008 and became a Brand company.

The GHG inventory followed ISO 14064, and the scope was defined in Taiwan

only. Scope 1 included diesel oil of emergency generators, gasoline of transportation

buses, energy consumption by the facilities in headquarter, air conditions and

refrigerants in headquarters; Scope 2 included electricity of office buildings/sites and

dormitory; Scope 3 included natural gasses from cafeteria, canteen, gasses and

refrigerants. The total and the types of energy consumed in 2008 were 18,810 MWh

of electricity, 228 liters of diesel oil, and 9,201 liters of gasoline. The calculation of

CO2-e emissions are based on the emission factor and CO2 electricity coefficient

provided by Bureau of Energy, Ministry of Economic Affairs of Taiwan, and the

global warming potential (GWP) defined in IPCC 2006 Guidelines. The total CO2-e

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emissions were 12,374.1 metric tonnes of CO2-e, with Scope 2 whose type of source

is electricity makes up the majority of the GHG emissions.

Year 2008 is the company’s first time doing the GHG inventory for Scope 3

GHG emissions, starting with the cafeteria and canteen. The company is planning to

further expand the Scope 3 inventory to business traveling by combining the

Employee business traveling system with the internal GHG Database IT platform for

GHG emissions. In addition, ASUS will also discuss with the company’s major

suppliers and outsourcers to corporate and process the GHG inventory.

Aside from GHG Reduction, several programs of ASUS were introduced to meet

the demands and address issues the current environmental challenges poses. Such as

product recycle and end of life management, Green Products and others. For product

recycling and disposal for instance, old computers, notebook computers, and other

electronic equipment contain hazardous chemicals that can be harmful to the

environment when disposed in a landfill with trash. By recycling, the metals, plastics,

and components found in an old computer will be broken down and reused to make

new products. And, the environment is protected from any uncontrolled release of

harmful chemicals. ASUS works with recycling vendors with the highest standards

for protecting the environment, ensuring worker safety, and complying with global

environmental laws. Their commitment to recycling old equipment grows out of our

work to protect the environment in many ways. In Taiwan, according to the Recycling

Fund Management Board of Environmental Protection Administration Executive

Yuan and ASUS' project "PC Recycling for A Brighter Future", the PC recycling rate

was 41.2% and the recycling weight is around 4000 tons in 2007; 46.1% and around

3000 tons in 2008. ASUS has established recycling service in Taiwan, Europe and

North America. Global recycling rate reached 8%, and recycling weight was around

3750 tons. Computers that can be recycled and re used were usually donated to

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individuals or institutions that don’t have computers thus creating a CSR chain from

environment to social service.

The strong commitment of the company for energy sustainability and

environmental preservation and to reduce carbon use and GHG emission through

creating energy efficient yet sustainable products and reducing energy consumption of

ASUS’s FABs contributes a lot to what the Sustainable Energy Policy aims. The eco

computers of ASUS help in improving energy efficiency and sustainability in every

usage. The lesser energy consumption will be, the lesser the use of carbon, thus

reducing carbon emission and GHG emission. The lesser the energy consumption will

be, the energy supply will be stable.

Despite of the efforts, what was the impact of these that would make a societal

significance?

A report released by Ethical Corporation, examines how organizations can

incorporate the measurement of social and economic reporting into their CSR

activities. Its premise is that companies are beginning to realise that corporate

responsibility is about much more than being green, despite a hazy understanding of

exactly how social and economic impact studies benefit their business.

It attempts to analyze different impact models - giving case studies and examples

from different companies. These include managing supply chains, assessing

integration into the local community and contributing to social and economic

development. Its learning includes demonstrations of CSR achievements from other

sectors. For example, it shows how international aid agencies have come to measure

developments after years of struggle. It showcases examples which are relevant for

the private sector. On the case of ASUS, its Green ASUS contributed in this social

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endeavor of promoting sustainable energy and efficiency through improving from

within, starting from their own products and corporate policies. The impact of

business on communities is becoming an increasingly important element of CSR

activity.

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Chapter V

Limitations and Conclusion

This paper used limited resources in order to investigate how a company behaves

on a policy. The difficulty of investigating due to limited literatures left some

theoretical gap in this paper. The information was based on the ASUS CSR report

since 2008 publication to present with other resource data since the company started

its formal CSR documentation on the year 2005. This paper despite of its limitations

can serve as:

1. Pilot studies for further studies on corporate behavior towards public policy.

2. A related literature on CSR analysis in general and CSR management.

3. A reference for companies on formulating their CSR policies.

The case of ASUS is both achieving yet remains ambiguous. Achieving in the

sense that ASUS achieved a lot and exerted efforts just to improve their CSR. The

question then is why ASUS exerted much on these? What is the real motivation of the

company? As stated on Chapter 3 assumptions that it’s either governmental factors

that is, it’s either stakeholder’s participatory governance or mere compliance or

corporate factors that is, it’s either a value creation CSR or just a business strategy for

corporate branding.

As Wu, et.al (2006) stated that like high-tech, companies need to develop

sustainable products to meet the market needs. The sustainable product development

involves both cost and market factors that reflect the common themes of enhanced

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profitability, improved product marketability and consumers’ perception on the firms’

corporate social performance. Management and scholars have been searching for the

determinants of motivating factors of sustainable development. To date, though, we

still do not really understand why some firms are more motivated and performing

better than other firms in sustainability and business performance. However, there is a

clear lack of comparative approaches, and very little empirical research has dealt with

the influencing factors. None of the researches account for the high-tech

manufacturing industry in the region.

Shall we view CSR as publicity building? Publicity like this can be a key part of

using CSR to win contracts. People want to buy from businesses they respect. CSR

can be particularly effective for targeting ethical companies, the public sector and

not-for-profit organizations.

At the same time, you should see CSR as part of a continuing process of building

long-term value. Everything you do should help improve your reputation and

encourage customers and other stakeholders to stay involved with you. A business

that buys recycled paper - but exploits its customers and ignores the community - has

missed the point.

You could consider working towards a management standard which you can then

use to publicize your ethical, environmental or social responsibility. For example,

many businesses have already achieved the environmental management standard ISO

14001.Building a reputation as a responsible business sets you apart. Companies often

favor suppliers who demonstrate responsible policies, as this can have a positive

impact on how they are perceived by customers. As for ASUS reducing resource use,

waste and emissions doesn't just help the environment - it saves you money too. It's

74

not difficult to cut utility bills and waste disposal costs and you can bring immediate

cash benefits.

Whatever the reason of ASUS, it should be seen on the brighter side wherein we

should focus on its effects in regards to this societal agenda rather than scrutinizing

the motives of ASUS that drove the company to implement CSR. As a

recommendation, companies should develop more programs that will cater to the

needs of the society not to what will suit to the government’s policy. Since

stakeholders are called for participatory governance, all sectors should work for the

betterment of the state. Let CSR be a means for the corporate sector not only to

response to policy but rather as a corporate principle.

Conclusion

Since Taiwan is not one of the countries listed in Annex 1 of Kyoto Protocol,

Taiwan has no immediate risk of emissions restriction from Kyoto Protocol. However,

Taiwan government is proactively promoting energy saving policy and drafting

Greenhouse Gas reduction law. The use and development of renewable energy has

become a major policy incentive in Taiwan. Some measures, promoting renewable

energy, were previously instituted, but many legal and institutional barriers,

hampering the development of renewable energy, remain; thus, it is necessary to

encourage discussion to eliminate barriers and implement support mechanisms.

The challenge of rapidly increasing global greenhouse gases (GHGs), and their

pervasive impact on humanity, has spurred international initiatives for limitations on

GHG production. Among others, the Taiwanese government is paying close attention

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to this issue. According to the Challenge 2008: National Development Plan and the

Nuclear-free Homeland Policy, the government of Taiwan has offered favorable price

incentives to renewable energy producers, for up to 12% of the country’s total power

generating capacity (about 6500 MW). Furthermore, according to the Nuclear-free

Homeland Action Plan, a budget of NT$3 billion (US$90 millions) will be made

available each year, commencing 2004, to promote the development of clean energy

and energy saving industries. This shows that the use and development of renewable

energy has become a major policy incentive for the Taiwanese government. (Wu, et.

al, 2006)

Fig. 5.1 Development Progress of Renewable Energy of President’s Committee of Advisors on Science and Technology

(Source: Wu, et al ,2006)

ASUS is in support of and is happy to see the legislation of GHG reduction law,

thus the company became the member of the Business Council for Sustainable

Development (BCSD) and also joined the GHG Reduction Law working group of

Taiwan Corporate Sustainability Forum (TCSF) of BCSD in 2008 to show ASUS’

commitment of GHG reduction law.

Since 2007, ASUS has answered Carbon Disclosure Project (CDP) questionnaire

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to disclose the GHG inventory data and environmental protection strategies. CDP is a

non-government organization which works with shareholders and corporations to

disclose the greenhouse gas emissions of major corporations and possesses abundant

information regarding climate change collected from all over the world. ASUS

voluntarily answers CDP questionnaire and exchange GHG information through such

platform to share our experience in the area of energy saving. ASUS will continuously

improve itself and contribute more to the topic of global climate change issue.

Despite these achievements, there are points to consider. On the part of the

government, is the Sustainable Energy Policy, a strong commitment of Taiwan

government not only in securing Taiwan’s energy but also its commitment for a

sustainable development for the future or just a lip service of the government just to

show that they’re committed and participant to the international agenda despite

Taiwan’s current international status? ASUS, truly drove the global business

environment but how sincere the company is and not just a green washing propaganda,

as a way of Strategic CSR approach? In principle, basing on the product as well as the

effectiveness of the programs implemented of ASUS in response to the sustainability

policy of Taiwan would give us the idea on how a certain company, ASUSTek in

particular would comply to the call of government. Whether the intention is more of

the Strategic CSR rather than Responsive CSR, we can clearly see how CSR would

serve as a channel for public-private partnership thus creating participatory

governance among the stakeholders.

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