Upon my return to China in 2013, after 15 years in the US and Canada, one of the first things I noticed was the levels of pollution in Beijing. Over time, I also saw a number of other significant challenges in our society, including food safety, inequality of educational resources and limited job opportunities for disadvantaged groups, among many others. My initial reaction was to try to help through supporting NGOs and volunteering my time, but I had a surplus of neither.

I did, however, have a platform at CKGSB through which I could promote the idea of Business for Good (BfG)—companies expanding the social value of their core business and integrating it into their corporate strategy, business development and resource allocation to spur even greater commercial success.

The students I teach are top of the pyramid entrepreneurs in China, and behind each of them is at least one corporation and myriad employees and their families. It occurred to me that if I could plant the seed of BfG in these students’ minds, and encourage them to use a business mindset and methodology to contribute to solving social issues, the potential impact was well beyond what I could achieve by myself.

In 2016, I created the BfG elective course in our EMBA program. It became a required course in 2018 and spread to all other programs later on. In 2021, we launched a one-year BfG practice-based course in which students have to design and execute a year-long BfG project within their company.

Business for Good

BfG has become something of a buzzword in recent years, yet a universally accepted definition remains elusive. But it is clearly something other than traditional corporate philanthropy. Because of their links to, and reliance upon, a company’s core competencies to be successful, the projects also help achieve greater commercial value, while pushing forward sustainable development and becoming an important force for social progress. In essence, Business for Good isn’t just about giving back—it’s about building a business model where doing good drives revenue growth.

There are a number of examples from CKGSB alumni that demonstrate the idea: a gondola company that created an accessibility-friendly product to allow wheelchair users; a smart speaker company that totally redesigned its packaging which is now recyclable, uses less resources and saves the company money on each unit; and JD Home Appliances introduction of senior customer service areas to help elderly consumers better understand and use their products.

The fundamental logic behind Business for Good draws from China’s culture of virtue and aligns with the shared ideals of sustainable development. And while familiar notions of charity and ESG are present, it distinguishes itself in significant ways.

Charity typically brings to mind monetary donations, such as those made to the Red Cross or other humanitarian organizations, and it can also include actions such as in-kind donations and volunteer work, often associated with public welfare initiatives. Charity is often seen as a moral obligation—a way to redistribute wealth and address societal needs, but with BfG we can shift that perspective away from the zero-sum game where one person’s generosity is another’s reliance, to one where everyone benefits.

Instead of merely redistributing wealth, Business for Good focuses on leveraging core competencies to innovate and reallocate resources. This means tackling social issues more effectively and creating greater value for all. Imagine it as a process of expanding the pie rather than just dividing it. Furthermore, because BfG places emphasis on multiple stakeholders, it not only increases the potential for initial distribution but also enhances the efficiency of that distribution. For instance, giving cash to help someone meet basic needs is charitable, but offering microloans empowers them to create wealth, which falls under Business for Good. When altruism drives our business practices, we pave the way for a fairer and more equitable sharing of benefits.

Then comes the relationship between BfG, and the concepts of sustainable development and ESG. The term Sustainable development was first in the 1987 UN report “Our Common Future” as a model that meets present needs without compromising future generations, all while protecting the environment. True development integrates economic growth with two critical dimensions: human development, which aims to reduce poverty and inequality while enhancing education and healthcare, and sustainable practices that ensure long-term benefits for future generations.

This framework is based on the view that social progress and environmental protection are as vital as economic growth. In 2015, the UN established 17 Sustainable Development Goals (SDGs), which represent the most inclusive action agenda in UN history, guiding global efforts toward sustainability. Importantly, the SDGs invite participation from various stakeholders—not just governments and NGOs, but also businesses and individuals—each finding their own unique ways to contribute.

In the context of international development and national policies, sustainable development directly influences corporate behavior in two key ways. First, there are disclosure standards from third-party organizations, such as GRI, CDP, ISO 26000, and stock exchange guidelines. These standards provide benchmarks for how companies should publicly report their sustainability and corporate social responsibility efforts. Second, there are evaluation standards like MSCI and SASB that assess the financial impact of a company’s sustainability practices from an investor’s perspective. In 2005, the United Nations launched the Principles for Responsible Investment (PRI), marking the introduction of the ESG concept.

ESG stands for Environmental, Social and Governance—three critical dimensions that influence corporate behavior and investment decisions. The PRI help investors understand how these ESG factors impact investments, assessing the contributions of companies to economic sustainability and social responsibility.

Since ESG originates from investment principles, its focus is closely tied to business. Essentially, ESG aims to achieve sustainable development from a commercial and investment perspective. Given that businesses inherently seek profit, the emphasis shifts away from purely economic factors to environmental and social considerations, along with the governance structures that support these goals. This framework encompasses a wide array of sustainable development topics and is concise and memorable, making it popular in discussions and policy contexts. In fact, ESG often serves as a substitute for the term “sustainable development” in various dialogues and regulatory frameworks.

In May 2024, the Shanghai, Shenzhen, and Beijing stock exchanges officially released the “Guidelines for Sustainability Reporting by Listed Companies,” establishing unified disclosure standards for the first time in China. These guidelines categorize disclosures based on ESG dimensions, indicating a shift from voluntary to mandatory sustainability reporting. This trend illustrates that sustainability (including ESG) is becoming a prevailing direction in China as well as globally. As companies face this landscape, they must consider whether to be “passively affected” or “proactively engaged.”

Business for Good represents this proactive approach, serving as a pathway to sustainable development and future business opportunities. The definition of “Business for Good” was formally introduced in 2021 at CKGSB, with its model first outlined in the 2019 book Future Good Companies: A Three-Step Approach for Sustainable Business.

In summary, BfG is the approach, sustainable development is the objective, and ESG serves as the practical tools.

Why is it good?

A Business for Good approach has been growing in commercial importance over the past 20 years, following the general global trend of increased awareness of sustainability.

Potential investors are taking ESG issues into account when deciding whether to spend their money, and in an increasingly strained geopolitical environment, it is likely that this trend will continue. On the other end, consumers are also becoming more discerning in their purchasing choices, with many demanding more from companies in terms of responsible practices.

Given the pressures from all sides, there is an inherent logic to approaching business operations through the BfG lens, even before taking into account the power companies have in solving the pressing global challenges of today. This is why it is also key for business school educators to instill the idea of BfG among students, encouraging them to practice BfG from their own perspective and within their own realm of expertise. From the CKGSB perspective, this is also how we can practice Business for Good.

Being good

To better understand the idea in a practical sense, I proposed a BfG triangle theory, which highlights the three core pillars that were critical for enterprises to implement BfG: the values of shared benefits, institutional support and integrating core business with societal concerns.

But as with many ideas, actually starting the process can be daunting. To help with this, I also created an ESG action map, so that entrepreneurs and business leaders can easily identify areas material to their companies that they can focus on.

There are four key foci that underpin the successful practicing of Business for Good.

Firstly, focus on core strengths and create mutual benefits. Business for Good emphasizes leveraging a company’s core competencies—not just its core business but also its strengths in technology, talent and relationships—to tackle pressing social issues. By focusing on what they do best, companies can unleash entrepreneurial spirit, ensure mutual benefits for all stakeholders and sustainably create value. This fosters a virtuous cycle of collaboration and growth between businesses and society.

Second, start with altruism and achieve profit through purpose. Since Business for Good involves doing good through business, it must align with business logic—allowing enterprises to generate profits and sustain a virtuous cycle. However, the advocated path to profitability is “benefiting others to benefit oneself”—solving others’ problems and creating value for them, which in turn generates returns for the business.

The essence of Business for Good can be summarized as “achieving profit through purpose.” In Chinese culture, the debate over “righteousness and profit” has a long history, evolving from Xunzi’s idea of “controlling profit with righteousness” to views that balance the two. Business for Good goes a step further, advocating for “purpose first, profit follows.” This sequence is critical because starting from profit does not necessarily lead to purpose, especially when short-sightedness or self-interest comes into play. On the other hand, starting from purpose—by addressing societal issues and creating genuine social value—not only earns businesses respect but also helps uncover new opportunities for profit. This is how true success is achieved.

Third, instill purpose and boost morale. We are currently in a time of global challenges—pandemics, wars and political instability—that have strained the economy. In my classes, students often ask: “If businesses are struggling to survive, how can they practice Business for Good?” Initially, I tried to persuade them with arguments, but the impact was limited. I soon realized that, as a professor, my words hold little weight for entrepreneurs facing real struggles. However, the actions of peers can be incredibly powerful. Some entrepreneurs, even in adversity, stay committed to Business for Good, focusing on altruism and achieving remarkable results that inspire others.

Over the past year, these practitioners have shared a key takeaway: when businesses embed Business for Good into their culture, employees gain a deeper sense of purpose. This sense of mission not only lifts team morale but also fosters a positive corporate culture. With purpose, challenges feel far less intimidating!

Finally, no moral coercion—just inspiration. The concept of Business for Good is not about applying moral pressure but about offering entrepreneurs a new perspective.

This approach encourages them to deeply consider societal and environmental challenges, uncover new market opportunities, and explore avenues for growth. By doing so, Business for Good not only drives the sustainable development of companies but also brings positive transformative energy to society as a whole.

Does it work?

The importance of tangible results and support in instilling purpose and inspiring others to adopt a Business for Good approach is paramount. I set up a mentor system so that mentors (some of whom are CKGSB alums and others are non-CKGSB affiliated but successful business people who share the same belief in BfG) can help our students to engage in their BfG practices.

We keep track of best practices and ask these people to come back to classrooms to share their experiences. We have also put together BfG case books, so that future students could learn from others’ experiences, both positive and negative, and develop ideas further.

As for the numbers, so far more than 2,000 CKGSB EMBA students have implemented BfG projects within their companies, out of which 30% have been featured as “best practices.” We have published two BfG case books in the past two years, featuring “best practices” among our 36th and 37^th EMBA cohorts.

Our mentor network has expanded to more than 100 members, who work with us continuously to help students start and continue with their BfG projects. And we have also published two BfG industry guidelines, one for the food industry and another for the gaming industry.

These resources and innovations have helped our students to initiate BfG projects which are truly relevant to their businesses’ core competencies, producing multilateral beneficial effects, and gaining a level of fulfilment during the process.

Moving forward

Given the current challenging global climate, the need for more BfG practitioners is only going to increase. The idea itself is sound, and the growing number of successful examples is adding strength to the argument.

From the perspective of the CKGSB course, there are three main avenues for future improvement. The first is to continue to improve the practice-based BfG course, nudging more students not only to do it, but do it better. Second, offer more in-depth mentoring for selected projects and turn them into high quality cases that can be used to teach others. And third, try to broaden the impact of the course by providing support to, and encouraging, other schools so that they can offer similar courses, and collaborating with other organizations to further support our students to engage in long-term BfG strategies.