Promoting Corporate Social Responsibility

Many workforce training schools including CFVG are paying attention to Corporate Social Responsibility (CSR). A Vietnam Business Forum reporter had an exchange talk with Mr André SCHMITT, Director of CFVG Ho Chi Minh City on the issue.

Why do we have to implement CSR in Vietnam?
Concern for CSR has developed hand in hand with increasing demand for profit. The latter can be dated back to the early-70s in developed countries with the concomitance of intensifying competition, technological change and the start of the progressive transfer of power from corporate CEOs to shareholders. Globalization and worldwide competition has increased the trend for profit search. At the same time, the inability of governments to counterbalance effects of mobile capital created a direct reaction towards firms. Implementing CSR is a way to change the conduct of firms in order to take into account other stakeholders like employees, communities and the environment.

 

The recent financial crisis shows that Vietnam’s economy belongs to the world’s supply chain. It does not escape from global competition pressure. Implementing CSR practices is as difficult a task as in any developed country. Recent events like the pollution of the Thi Vai River, Chinese contaminated milk, numerous conflicts opposing employers and employees have proven that the implementation of CSR principles is necessary to promote sustainable economic development.

 

What is CFVG’s role in implementing CSR and putting it into practice?
In 2008, CFVG responded to the global call for business schools and academic associations to advance corporate social responsibility worldwide. The school has committed to adhere to the Principles for Responsible Management Education (PRME), which was unveiled by a group of scholars and leading academic organizations at the UN Global Compact Leaders Summit in July of 2007.

 

By adhering to the Principles for Responsible Management Education, CFVG reaffirms its commitment to providing excellence in management education to both Vietnamese students and companies, to applying international standards to its programmes, and to developing the capabilities of students to be future generators of sustainable value for businesses and society.

 

The conference organized by CFVG on 20^th April 2009 aims at facilitating dialogue and debate among educators, businesses, government, consumers, media, civil society organizations and other interested groups and stakeholders on critical issues related to global social responsibility and sustainability.

 

How was CSR implemented in France and what were the effects?
CSR processes are still developing within French companies. As in most countries in the world, a significant proportion of a company’s value (potentially over 60 per cent) relates to intangible assets. That is why firms are very sensitive to NGOs and citizens actions that could degrade their image. Rather than responding to criticisms, many of them prefer to adopt a proactive strategy by implementing voluntary CSR processes.

 

For instance in the French food retailing sector, Yann Chabin, professor at the University of Montpellier, has shown that over the last seven years, companies like Carrefour, Casino (Big C in Vietnam) Auchan have explicitly recognised the impacts they have on the environment and on the society, leading them to undertake sustainable development and ethical programs. This translated into the diffusion of indicators of sustainable development in their annual reports within the framework of legal obligations.

 

Are there any difficulties when implementing CSR processes?
It is indeed difficult to implement effective CSR processes because eventually CEOs have to find a trade-off between financial objectives and ethical or environmental concerns. Competition and shareholders’ pressure are often too strong to follow other objectives than profit maximization.

 

However, whatever its position within a corporation, anybody is sensitive to some extent to the harm one can cause. There is always some scope to exert empathy with others. The question of responsibility should thus be reformulated: Do the procedures, the governance or incentives of a corporation promote responsibility for the other or weaken it? Thus, a company can be considered socially responsible if it is willing to adapt processes that protect those who are vulnerable to its conduct. This means in turn that companies must be able to identify vulnerable stakeholders. This also explains why CSR took possession of many fields going from sustainable development to corporate governance as we will see in the conference held today.

 

Ms Lan Huong, professor at CFVG Ho Chi Minh City, has shown that an important step is to explore the perception of CSR from Vietnamese consumers and to describe their ethical behavior. This perception influences directly their buying behavior and should help companies and manufacturers to adapt efficient CSR programs.

 

I would add that citizens should fully realize the power of public opinion and media coverage to change corporate behavior. It would then facilitate the introduction of well accepted indicators of ethical and environmental progress that could help to distinguish truly responsible firms. I believe that firms are willing to play the game if we can establish clearly undisputed indicators that are adopted by all firms.