Sustainability in business: Tencent’s strategic upgrade towards sustainable social innovation

Iris He

On April 19 2021, Pony Ma, the Chief Executive Officer of Tencent, announced the company’s latest strategic upgrade, which would establish a Sustainable Social Value Group within the Corporate Development Group (CDG) with an investment of RMB 50 billion. He explained that the focus would be on innovation with sustainable social value, including education innovation, basic science, rural revitalization, carbon neutrality, FEW (food, energy, and water), public emergency, gerontechnology, public welfare digitalization and more.

Source: http://zw.china.com.cn/2021-04/19/content_77418784.html

This strategic upgrade is Tencent’s biggest reform since the “930 Reform” in 2018. In the last transformation, Tencent made a major structural adjustment, accelerated science and technology upgrade and put forward the vision of “tech for good.” Unlike the old mission, which prioritized individual users over the wider society, this new vision emphasized the importance of using its technology to help construct a cleaner, healthier, safer, and more sustainable world.

Source: http://science.china.com.cn/images/2017-08/21/d94c2744-9686-4a83-bec9-bc44b01eb716.jpg

Tencent’s dedication in reducing the impact of Covid-19 on China has proved to the public its determination in implementing the vision. In the past year, Tencent launched the International Anti-Covid-19 Service Package and provided open source tools to help curb the transmission of COVID-19. In terms of China’s economic recovery, Tencent’s “Digital Ark” program aims to improve sustainable development through cost reductions, build new pathways for customer acquisition, and establish specialized funds to promote technology-driven business. It supported micro, small and medium-sized Chinese enterprises in key industries such as agriculture, commerce, education, healthcare and tourism through digital transformation. Tencent’s active contributions to societal welfare light some hope in the effect of this upgrade on sustainability.

Source: https://static.www.tencent.com/uploads/2020/03/26/598d0ed017b6f01a049bafddb2ccd407.jpg!article.cover

According to Professor Zeqi Qiu, the director at Peking University Center for Sociological Research and Development Studies, Tencent’s strategic upgrade focuses on long-term social value rather than short-term economic benefits. As one of the biggest tech companies in China, Tencent’s innovative social values will benefit numerous citizens, if not all. As a platform-oriented enterprise, Tencent can impact thousands of collaborators through its technology, such as Mini Programs, and guide them to explore innovation in social values. In his view, the resulting benefits would far exceed the numbers on Tencent’s financial statements. This is true in many different ways. For example, committing to sustainability practice helps to enhance the company’s credibility, which is an important factor that many stakeholders consider when judging a company’s potential. Besides, customers would build higher trust in companies that pursue environmentally-friendly goals. According to the “China Sustainability Consumption Report 2019” released by SynTao China Sustainable Development Case Center, 70% of Chinese consumers are aware of “sustainability,” and more than 70% are willing to pay higher prices for sustainable products. This further strengthens the sustainable pursuit in business as a driver of customer’s satisfaction. What’s more,Tencent’s upgrade towards more sustainable practices could prepare it well for future potential changes in China’s laws and regulations, which in turn helps minimize operating risks, enhances communication with public decision-makers, and can ultimately deliver a competitive advantage.

Source: http://www.1000thinktank.com/u/cms/www/201706/12152312b7l5.jpg

Lv Peng, a researcher at the Institute of Sociology of the Chinese Academy of Social Sciences, used the metaphor of the cohabitation between birds and trees to describe the relationship between Tencent and its partners. He pointed out that Tencent empowered individual businesses through a complete set of toolboxes for creating social impacts, amplifying Tencent’s contribution to social wellness to a much greater degree. Peng believed that the sustainable social value innovation proposed by Tencent would significantly impact not only the Chinese businesses market but also the global business community, and it would inspire them to prioritize sustainability in their business. As Tencent is one of the pioneering companies in China, its investment in sustainable strategies would create higher market standards and make it difficult for competitors to justify their environmentally irresponsible practices.

Despite Tencent’s continuous work in the public good, its new vision in promoting innovation on sustainable social values is certainly possible on paper, but difficult to accomplish. Since a successful social reform always involves the collaboration among social organizations, governments, and corporations, Tencent will need to expand its networks beyond individual enterprises to realize an impactful societal reformation. In addition, as more power comes with higher social responsibilities, Tencent needs to improve its services and avoid common problems in tech companies, such as privacy protection, to sustain its reputation among users. In response to the challenge, Tony Ma expressed his hope that Tencent would become the initiator of sustainable social innovation in the Chinese market, and he promised that Tencent would continue to respond to the societal needs and develop along with the country.

About the author:

Iris He is a Journalist in SRP’s Writing and Interviewing Program. She is a third-year Cognitive Science student with a minor in Computer Science at McGill University. Her areas of interest center around sustainability, mental health, and technology innovation.

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