Along with Corporate Social Responsibility (CSR), voluntary social standards have rapidly gained importance in China. A growing number of export-oriented Chinese companies are now making an effort to comply with international voluntary social standards, while Chinese governmental institutions as well as trade and industry associations are developing their own voluntary standard systems.

By committing to voluntary social standards companies along the supply chain can prove to their customers, their workers, the local community and society at large that they assume their Corporate Social Responsibility. The growing importance of voluntary social standards is hence a reflection of the increasing consumer and general stakeholder awareness of, and demand for, sustainable global production and consumption.

However, a number of challenges are still in the way of a widespread application of voluntary social standards in China. They include, but are not limited to, the following:

• Lack of  transparency of the voluntary standards landscape;
• Low awareness and understanding of standards and their benefits by both public and private sector stakeholders;
• Limited capacity and scale of advisory services and training to implement standards;
• Deficiencies in coordination, cooperation and alignment/harmonisation among and between standard initiatives, local and foreign ones.

The Sino-German CSR Project seeks to address these challenges and thereby promotes the widespread use of voluntary standards in China through an integrated initiative under the framework of the Monterrey Fund for Trade Policy and Trade Promotion of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Support to scaling up voluntary social standards in China will be provided via the Monterrey Fund for two years until September 2011. The objective of the Monterrey Fund in China is to "improve the preconditions for a broad and sustainable implementation of voluntary social standards in the Chinese economy."  It focuses on the following aspects:

• Support the harmonization and alignment between national and international social standards initiatives as well as between different companies’ initiatives;
• Strengthen a transparent and efficient market for standard-related service offers in the areas of training, consulting and auditing; and
• Support the transfer and the scaling up of social standards, i.e., awareness-raising and integration among different industry sectors. Furthermore, on the basis of gained experience and developed approaches, foster them on the national and sub-national policy level.

In addition, the Monterrey Fund Initiative aims at developing a pilot approach for the systematic implementation of voluntary social standards in China and in other countries.

In order to ensure that widespread impact can be achieved, the Sino-German CSR Project focuses, among others, on the following activities:

• Support renowned industry and trade associations in driving forward their CSR agenda, amongst others by implementing voluntary social standards in their member companies (e.g., China International Contractors Association – CHINCA; China National Chamber of Commerce for Import and Export of Machinery and Electronic Products – CCCME; China Packaging Federation – CPF);
• Promote the application of international good practice for developing standards in China and facilitate alignment among and between foreign and domestic standards by cooperating with prominent standard-setting initiatives (e.g., Social Accountability International – SAI / SA8000; Business Social Compliance Initiative – BSCI; China National Textile and Apparel Council – CNTAC; local Chinese standard initiatives);
• Facilitate multi-stakeholder forums (e.g., Consultation on Promoting Stakeholder Engagement and Social Responsibility in China; Roundtable on CSR and Rights and Interests of Employees);
• Develop innovative learning tools for the Chinese context and disseminate international good practice on standards (e.g., comparison tool for standards; website on sustainable supply chains; dissemination of Codes of the International Social and Environmental Accreditation and Labelling Alliance – ISEAL).

The Monterrey Fund was established by BMZ in 2002. Its overall objective is to build the capacities of partner country decision-makers and stakeholders to develop and implement coherent and comprehensive strategies for the promotion of trade and investment. The project approach generally is to offer capacity development to a broad range of stakeholders, i.e. policy-makers and civil service officials, business associations, chambers of commerce and civil society groups in partner countries. Further information on the Monterrey Fund can be found here https://www.gtz.de/en/themen/wirtschaft-beschaeftigung/12781.htm.