In the context of many countries around the world have been promoting the use of Sustainability Report (SR) as a mandatory tool to assess and manage the implementation of corporate social responsibility (CSR) of businesses, especially those with labour-intensive and large scale capital, most Vietnamese enterprises still have not understood the role of SR implementation in their development and integration process. Vietnam Business Forum interviewed Mr Nguyen Quang Vinh, Director of the Office for Business Sustainable Development (SD4B) on this issue. Huong Ly reports.
Could you explain the reasons why developing sustainability reporting has become an inevitable trend in the world for the recent years?
It is clear that, SR implementation is an inevitable trend in the world. This is because SR is not only a tool for improving business efficiency, identifying risks and opportunities. More importantly, it is also a tool that helps enterprises enhance their credibility, demonstrate commitments in the implementation of corporate social responsibility, and enhance their competitive advantages towards the sustainable development.
Specifically, there are more than 600 organisations from 65 countries participating in the Global Reporting Initiative. Most of these organisations are located in Australia, Brazil, China, India, South Africa and the United States. The ratios of implementing the Global Reporting Initiative divided by continents are listed as follows: 45 percent in Europe, 18 percent in Asia, 14 percent in North America, 14 percent in Latin America, and 5 percent in Africa.
Accordingly, over 30 countries have issued 142 legal regulations for the Sustainability Report; of which 65 percent is compulsory. On the other hand, enterprises listed on the stock exchange have been requested or voluntarily guided to implement the Sustainability Report by many countries and stock markets since 2006. In addition, a series of SR initiatives have been deployed by the UN and other international organisations, such as the network of United Nations Global Compact (UNGC), the Global Sustainability Report 2013; the International Integrated Reporting Council (IIRC); the Global Reporting Initiative (GRI), etc.
In the context of the economic crisis, most of Vietnam enterprises are grappling with their difficulties, are "sacrificing" short term benefits to get sustainability goals and spending extra costs for developing SR possible to be voluntarily accepted by enterprises?
Vietnam is facing with many challenges in the field of sustainable development, such as poverty, urbanisation, financial crisis, food and energy price volatility, climate change, depletion of natural resource etc. In this context, sustainability report is one of the effective tools to help monitor and assess the implementation of sustainable development strategies of enterprises. Sustainability report helps enterprises become more transparent in the eyes of investors and other stakeholders in society. The values created by enterprises are more completely recognised in terms of utilizing economic capital, financial capital, natural capital and social capital.
Could you give us your opinions about the current condition of SR development in Vietnam?
In recent years, sustainable development has been integrated in a wide range of policies, codes of law and legal documents, etc. Therefore, the implementation of sustainable development has been partially reflected in the production and business activities of enterprises. However, implementing and reporting separately about sustainable development is still a relatively new concept for Vietnamese enterprises.
Recently, the Vietnam Business Council for Sustainable Development (VBCSD)-VCCI has conducted a survey among 150 outstanding enterprises which represent sectors such as energy, manufacturing, business in Vietnam on the topic of sustainable development. The results show that, up to more 50 percent of businesses do not know what SR is, 44 percent of enterprises know little about SR. However, the good thing is, regardless of their limited knowledge about this kind of report, most businesses are eager to learn and plan for SR conduction in the near future.
Some large scale corporations such as Bao Viet, Vinamilk, FPT have also understood, applied and published their SRs, which can be considered exemplary cases for other enterprises.
With your experience, could you share with us your proposed solutions to quickly “universalise” SR development to the business community?
In order to get this achieved well, we recommend developing a roadmap for the application of SR at Vietnamese enterprises: The world’s experience suggests that this roadmap should be divided into 2 phases: voluntary phase and mandatory phase. Large enterprises to start first (the voluntary phase: 2014 – 2015; the mandatory phase: from 2016 onwards) and followed by small and medium enterprises (the voluntary phase: 2014 – 2019; the mandatory phase: from 2020 onwards). In addition, training courses held by the VBCSD in collaboration with the GRI in Hanoi and Ho Chi Minh City also indicated that a number of listed enterprises are showing their high interest in this issue.
Secondly, the government to issue policies to support and encourage the implementation of SR at enterprises, such as favorable tax rate, loan and investment conditions, etc. Rewards and honours should be granted for the enterprises with good SR implementation.
Thirdly, the VBCSD to collaborate with the National Council for Sustainable Development and Competiveness Improvement, the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment, the Ministry of Labors - Invalids and Social Affairs, the Vietnam General Confederation of Labor and international organisations to organize training courses on developing SR.
Fourthly, the VBCSD to support enterprises to prepare and promote their SRs on the international SR framework, such as the GRI, IIRC, UNGC principles and starting to develop the sustainability report database of Vietnam.
Lastly, the VBCSD to collaborate with relevant ministries, governmental agencies and international organisations to develop a set of SR index, which is initially applied for listed enterprises.
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