Vietnamese Businesses Need to Act More

9:43:13 AM | 17/1/2020

Sustainable development was disregarded by many companies 20 years ago because their primary concern was how to have stable business performance and to earn money to pay salaries for workers. But, in the last decade, sustainable development has been seen as a matter of inclusive development in all aspects of life, from economy, society and labor to environment.

Since the 2030 Agenda, with a focus on 17 sustainable development goals (SDGs), was adopted by 193 world leaders, including Vietnam, with the message of “leaving no one behind” in 2015, sustainable development has become a clearer and more practical story, placed at the heart of enterprises, especially trendy ones, seeking to go far by humanistic and social business.

Even when the Corporate Sustainability Index (CSI) was introduced, not many Vietnamese companies clearly recognized its importance and benefits, although CSI was meticulously elaborated by the Vietnam Business Council for Sustainable Development (VBCSD) and the Vietnam Chamber of Commerce and Industry (VCCI) to provide them with an excellent and scientific business management tool to achieve sustainable development.

But, this story is now very different. The awareness of the business community of sustainable development has completely changed, a result of tireless efforts of VBCSD and VCCI to spread CSI superiority into the business community. To date, CSI has been gradually integrated in every activity of many enterprises.

When we applied this index, we found many companies interested in and concerned about CSI criteria and targets to deliver true sustainable development. Therefore, with each passing year, CSI is updated to adapt to Vietnamese laws and approach international standards. In particular, reducing the number of criteria enables more companies to apply CSI.

In 2019, CSI was streamlined from 131 targets to 98 targets, in three categories: economy, society and environment. 90% of indicators are regulatory compliance. Indicators were updated and grouped more scientifically and better adapted international standards and domestic laws. CSI is highly applicable and suitable for many purposes. Unlike in previous years, this year’s update is enclosed with a guidance manual. Each indicator is explained in detail and instructed to declare information and submit reference documents because most reference documents relate to their production and business activities, thus information declaration is easier and more convenient. In addition, CSI is also developed into an application available at the website vbcsd.vn and is equipped with supporting functions to interact with users in the online filing process. The CSI software improvement ensures that users get maximum support and addresses concerns about this type of filing.

Thus, businesses already have a tool to check their health on their own and to work out right business plans.

In 2020, VCCI will submit to the Government a scheme on scaling up CSI application. This is an important and proud task and responsibility that the Government assigned to VCCI under Decision 1362/QD-TTg on approving the plan for sustainable private business development to 2025, with a vision to 2030.

This illustrates the Government's recognition of VCCI-VBCSD's tireless efforts over the past years for a stronger business community.

Perhaps, this is also a good signal for the business community because using this index in business operations does not increase administrative procedures and costs for enterprises. That is our prerequisite principle when carrying out the project. We also intend to build CSI into a business sustainability index.

In addition, VBCSD-VCCI will coordinate with local authorities to improve the effect of local business management by using CSI and scale up sector-specific CSI application in key industries.

After five years of application, CSI has changed the mindset of the business community, especially small and medium-sized enterprises (SMEs). Instead of seeing SDGs as a burden and a superficial action, many businesses have defined this as the right path to open up greater, more sustainable business opportunities.

According to the statistics of the Business and Sustainable Development Commission, incorporating SDGs at the heart of the company's business strategy can help create at least US$12,000 billion worth of market opportunities and create about 380 million new jobs by 2030, of which 90% will be in Asia. Launching the circular economy can also generate market opportunities worth US$4,500 billion and these opportunities are equally divided for all businesses. This is also the reason why we are promoting the circular economy in Vietnam. Despite its advantages, this model has not yet been widely scaled up because the biggest difficulty for companies to adopt it is investment resources for research, development and innovation. We need to understand that the circular economy is not defined to just recycling, reusing or renewing, but this model aims to extend product/service life right from product designing. The second difficulty is access to “green credit” to develop this business.

And, the last difficulty is legal barriers. Because there is no specific legal framework or law on circular economy, businesses cannot know whether their activities are proper or not. Everything takes time. Therefore, in the past time, VCCI and VBCSD have always tried to realize this. The efforts of the Government or VBCSD-VCCI are not enough because this needs deeper cooperation and stronger action from the very business community to successfully deliver the country’s sustainable development goals.

Nguyen Quang Vinh,
Secretary General of VCCI
Vice Chairman of VBCSD