IntroductionIn an effort to present a concise introduction to the treatise, this chapter shall move to look into a number of pertinent areas that would effectively lay the foundation of the discussion. As a means to an end, the chapter will commence with an overview of the background of the study before looking at the statement of the problem which in effect offers an opportunity for a presentation of the objectives and scope for the research. Having looked into that, the paper moves to examine some of the key research questions that form the pillars for the investigation. he chapter concludes with a view of the structure of the research.Research Backgroundhe increasing pace of globali!ation implies that nations need to take stock ofthe manner in which they take care of the environment and communities in which that undertake their commercial activities. "ith the increased monitoring and calls from bodies such as the #nited $ations, it has now become apparent that companies need to take measure that would ensure all their commercial activities are sustainable.In essence, this would then imply that these companies need to make effort towards social welfare programs %for both its employees and clients& and protection of the environment from run'off effects of their commercial activities. (odern economic perspectives point out that regardless of the industry, companies need to take social and environmental activities as to being part of their corporate philosophy in such a manner that it comes up with a sustainable model for its commerce, the society and more importantly, the environment. "hereas the short term benefits for such a move may be deemed as to being minuscule, the increased use of sustainability index by investors implies that such efforts are designed for the long haul whereby significant profits will be directly correlated with the extent in which the company is sustainable. "ith the above premise in mind, it then follows that the respective board of management need to develop models that would align their need for economic gain with that of a sustainable model that is aware of the need to safeguard the socioeconomic status for posterity. In other words, the firm needs to be keen to ensure that it places ample emphasis on environmental impact assessment, effective management of solid waste, payment of relevant environmental taxes and use of materials that reduce amount of waste produced. )uch a feat is not simple as the growth of the global economy has made competition for limited market become fierce to the extent that firms look towards short term objectives, that is, maximi!ed profits with little regard for the environment. Indeed, with lessons from a number of oil companies such as *+, such short cited measures often lead to poor standards of operations that results in accidents that jeopardi!e the environment leading to firms being forced into parting with compensation fees. In other cases, consumer watch awareness groups call for the society to boycott the consumption of products from such companies thus leadingto a drop in profits and eventually market value. )uch unwarranted risks are viewed as the major propellant for firms to take social and environmental accounting more seriously.*ased on the above, it then holds that the concept of ,)- as a whole serves tooffer linkages between commerce and the environment. In particular, what it does is that is connects commerce with socioeconomic polices as well as offer a linkage between the enterprise with the community. his is achieved through one of the tenets of ,)- which calls for the enterprise to adopt clean and environmentally friendly policies that would essentially reduce production of waste %especially toxic ones& that would in turn reduce its carbon footprint and thus offer a first line of mitigation strategy towards climate change. In addition to the above tenet, ,)- dictates that the firms need to be open about their business processes in areas such as competition and manufacturing processes. As such, the above can only be achieved by first ensuring that the top leadership of the firm implement internal measures of conformity towards regulationsat all levels %from state to international&. )uch regulations would essentially pertain towards business admiration, audit, ethics and cost accounting. In not so many words,,)- is not a concept that may be accomplished overnight but one that needs serious investment of human capital and more importantly the need to learn from past experiences. "hen such training and learning are underway, the board of management need to take it a notch higher and move towards including a ,orporate )ocial -esponsibility -eport and )ustainability .evelopment resport as part of their annual corporate reports. )uffice to say that firms that are listed within various security exchange listing that the above report is now mandatory and demanding in such a manner that the comprehensiveness of such a report has a direct bearing on thevalue of share of a company.In conclusion, this paper posits that whereas the main function of commerce is generation of profit, socioeconomic awareness is the pillar that would ensure sustainable development of the firm and the industry as a whole. /ffectively, firms that take ,)- seriously are often seen in the eyes of the community as honorable institutions that the consumer would find it in them to engage in meaningful commerce. /rgo, for companies looking towards the long run, there is need to invest in business activities that are socially responsible, that is, ones that respect both the society and natural resources.Corporate Social Responsibility in Chinao fully comprehend the case of corporate social responsibility in ,hina, one needs top fully comprehend the state of the ,hinese economy. *ased on 012342 figures, ,hina effectively became the largest trading power after amassing over #)56.78 trillion in trade thus making its voice at the "9 ever more pronounced %"hite, 2346&. Its foreign exchange reserves hit the #)52.7: trillion mark in 012343%IA$), 2344&. /ffectively, the nation received the highest in 0.I %an estimated #)52:6 billion& albeit its outward investment was a meager #)5;2.< million in the same year. *esides the above figures, the nation has seen a number of its firms become increasingly involved with the #) securities whereby as of 01233=, the nation become #)> largest holder of #) public debt standing at #)54.4; trillion worth of #) reasury *onds %Hornby, 233=&. he robustness of its firms is evident asseen in the 0orbes 01234< report that =: ,hinese companies formed part of the :33 largest global firms and that five out of ten of the largest public firms have their base in ,hina not to mention that the world>s largest bank %measured by total asset& is her Industrial and ,ommercial *ank of ,hina %,hen, 234s corporate social responsibility be measured fromE .o the consumers in developed nations have adequate exposure to the extent in which they possess rights that call forfirms to respect their well'being and that of their environmentE In search for some of the above answers, it is revealed that the application of the ,)- policy to the firm ought to be based on a top'down approach but of coursebe contingent on the number of persons that are being served within the firm>s market. /rgo, it then follows that the firm may result to applying different ethical rules when serving a different number of clients all together.aking a step back, it is important to take note of the fact that firms may not be entirely ready to invest in ,)- in nations where the industry lacks the relevant legal framework to facilitate as much. Indeed, if the events of the 23th century are anything to go by, firms were often lost in the cause to amass huge profit instead of thinking of investing their profits on the community, well, voluntarily that is. ,onsequently, nations moved too slowly begin to develop policies that towards this end albeit only resulting in a series of laws that were overlapping at the various levelsof government %from the ministerial level to the county council levels&. 0or full implementation, there has always been the huge task of getting a single regulator to try and piece together all these policies, considering that different government agencies issued different requirements. (ore importantly, it is very important to take note of the fact that the polices are often designed to affect large'scale enterprises as the government often assumes that they are often the ones that are more likely to have a huge impact on the community and environment. (oreover, going after the small'scale enterprise may be easily be misconstrued as the government creating an uncomfortable environment for business activities. (ore so, for the case of ,hina, whose economy was still largely centrally planned only a few decades ago, it lacks adequate legal framework for full scale implementation.he fact that the ,hinese economy has been in a constant state of transition from a planned economy, communist, implies that the situation presented a gap in thegovernment when it came to trying to keep up with the emergence and growth of a free market economy. Indeed, the .eng Fiaoping open market reforms were good forthe overall promotion of commerce but detrimental for the consumers and environment. ,ase in point, there is visible evidence to show the extent of disregard for environmental sustainability in *eijing where residents are even seen to be walking with nose masks to protect them from the heavily polluted air. All these was a result of *eijing failing to regulate the market thus allowing competition to take an unprecedented turn whereby oversight takes a back seat. )uch then places her exports in a precarious position whereby it often receives a lot of quality complaints. /ffectively, the mode of accounting practices in ,hina, that is, traditional, need to undergo massive reforms, especially taking note of the fact that the nation is a member of global trading organi!ations such as "9 and A)/A$. In addition to this, the increased growth and profitability of ,hinese firms to the extent that a number of them are in operation abroad implies that the nation has an ideal opportunity to shape it commercial philosophy and show the world that its firms can indeed engage in sustainable business operations. /rgo, firms need to be cogni!ant ofthe fact that reducing cost of operations need not be a reason to lower quality standardsA the nation needs to understand that it being among the largest economy faces competition from the #)A who would be ready to present them as cut'throat business people.Objectives of Research*ased on the ideas presented above, it then follows that the ensuing research possess two key objectivesG%a& o investigate the level of awareness on ,)- and )ocial and /nvironmental Accounting in the context of ,hinese commerceA%b& o understand the current status of ,)- and )ocial and /nvironmental Accounting in the context of ,hinese doctrines of commerce.Scope of the Research *ased on the research topic, the research variables are evident. he research intends to cover the concept of social and environmental accounting within the context of ,hinese and foreign companies operating within ,hina. (oreover, it undertakes a case study approach of investigating the manner in which Arcelor(ittal,$ippon )teel, $ucor and #) )teel have adopted ,)-. /mphasis will be placed on demystifying the level of awareness, benefits and problems. he object of the research will be based on collection and analysis of secondary data spanning a periodof three months %Bune 234: to )eptember 234:&.Research Questionso aid the development of the study and the full reali!ation of the hypothesis, six core research questions have been formulatedG%i& "hat is ,)-E%ii& "hat is environmental and social accountingE%iii& "hy are they important to business activitiesE%iv& o what extent are ,hinese companies aware of the importance of environmental and social accounting issues in the commercial activitiesE%v& How do ,hinese companies implement ,)- and environmental and social accounting in realityE%vi& How are foreign companies in the iron and steel industry working towards environmental and social accountingEStructure of Research his research paper is divide into five key areas.%i& ,hapter 4 H Introduction%ii& ,hapter 2 H Iiterature -eview%iii& ,hapter 6 H he )tatus of )/A in ,hinese ,ompanies%iv& ,hapter < H he )tatus of )/A in 0oreign ,ompanies%v& ,hapter : H ,onclusionIn the first chapter, a background that offers the rationale to the research paperis offered thus setting out the objective and scope of the research. ,onsequently, ,hapter wo offers a literature review of accounting theory with regards to ,)-, the triple bottom line and the importance of ,)- on business activities. (oreover, the section will deal with particulars on social and environmental accounting. In the thirdchapter, the focus shifts to understanding the awareness, benefits and problems faced by ,hinese accounting when it comes to ,)-. he same focus is then offered in ,hapter 0our albeit towards foreign companies with particular emphasis on Arcelor(ittal, $ippon )teel, $ucor and #) )teel. he last chapter provides a conclusion for the research alongside recommendations and limitations of the study besides suggestions for further research. "ith the complete research paper in place, an Abstract is presented thereby offering a concise summary to the discussionIntroduction he ensuing section seeks to make headways into offering a literature review on corporate social responsibility and that of social and environmental accounting. /mphasis will also be placed on making an understanding on the manner in which the above concepts and applied in practice. Cey to note is the fact that the review places a premium on ensuring that it correlates with the background of the research. Corporate Social Responsibility0or the sake of clarity, this review is divided into three key sections so as to increase its depth of research. hese sections areG%a& .efinition of ,)-A%b& he riple *ottom Iine and %c& he Importance of ,)- on business activities.efinition of CSRhe term ,)- may take up a myriad number of definitions all pointing to form of self'regulations that corporations integrate within their business models. Darious developed nations have their own blue print on what exactly it entails. 0or example, within the /uropean #nion, it is understood as to being Ja concept wherebycompanies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basisK. /vidently, the above definitions brings out the notion of non'coercion into complying with such a task. (oreover, it points out to the fact that the core function of the concept goes beyond sustaining the social and environmental setup but also goes on to make mention of the need to include the stakeholders in their endeavors in such a manner that points out that the endeavor goes beyond the need to make a company profitable.In other words, ,)- is all about how companies can be able to be profitable whilst still being able to align itself with a measure of social and environmental responsibilities.Indeed (c"illians L )iegel %2334& point out that ,)- activities ought to go beyond the need for an enterprise to satisfy a legal need thus again emphasi!ing the fact that the endeavor is purely voluntary. $evertheless, there are those that object to the entire notion. 0riedman %4=83& points to the fact that Jthe social responsibility of business is to increase its profitsK. In other words, his thesis argues that a company can only be able to help the community by being able to accrue huge profits that would in turn spur economic growth. However, with the increase growth in the concept of globali!ation, *lowfield L (urray %2337& suggest that it has led to the development of a new kind of relationship between the corporation and society. )uch a relationship is one in which the enterprise is willing to listen to the desires and callsfrom the society %Ammenberg, 2342&. In conclusion, there is overwhelming literature to support the earlier conjecture on ,)- whereby it ought to then be perceived as an activity that is goal oriented and one that is based on the norms of both the society and the enterprise. )uch a norm is said to be built on a series of dialogue that is in turn expressed or achieved through the firm implementing codes of conduct or standards and certification systems.According to Danclay:, *I is a philosophy or a way of thinking about ,)- but nota method of accounting. In his investigation on implementing *I, too many agencies and companies inappropriately appreciate the philosophy of *I and only response to the reporting requirements. (oreover, the implementation of *I gets struggled due to the social and environmental indicators have not been determined.!he Importance of CSR in Commerce,)- is the responsibility of the companies for acting in socially responsible manner,in which it is expected that a company go further than required by law so as toG reat employees fairly and with respectA 9perate with integrity and in an ethical manner in all its businessA -espect human rightsA )ustain the environment for future generationsA *e a responsible neighbour in the community and a goodMcorporate citi!en .+ratik and ,handan further comment that business enterprises have introduced ,)- reports to their operation to against the damage on their sales and reputations becausethe attacks from the activist groups who have highlighted wrong doing of the enterprisesN activities. he ,)- report might be included in the annual report or separate corporate social responsibility report such as social and environmental report or sustainability report. hese reports indicate a company s commitmenttoward ethical behaviour and highlight their progress towards achieving their strategic ,)- objectives.According to +ratik and ,handan:, the company who performs ,)- well will be abletoG4. "in new business. 2. Increase customer retention. 6. .evelop and enhance relationships with customers, suppliers andnetworks.