CSI - Powerful Instrument for Businesses after Covid 19

10:29:43 AM | 5/27/2020

The Covid-19 pandemic exposed gaps in economic governance and operation and showed the importance and urgency of sustainable development. In this context, the CSI Program and Index has shown its importance and significance of helping businesses improve their competitiveness and enhance their resilience in all scenarios.

This was the affirmation by Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI) and Chairman of the Vietnam Business Council for Sustainable Development (VBCSD), at the Launching Ceremony of the Program for Benchmarking and Announcing Sustainable Companies in Vietnam in 2020, recently held in Hanoi.

Dr. Loc said, although Vietnam is among rare economies that have initially controlled the pandemic, businesses are still facing a lot of difficulties due to cash flow shortage and output market disruptions. Businesses still need support to survive and grow. In this context, sustainable development is the only solution to overcome the pandemic. And, to a certain extent, pandemic is the price to be paid for not pursuing sustainable development”. Sustainability values will prevail in the post-epidemic era.

Sustainable development is key to economic development, for both the world and Vietnam, he said. Sustainable development and sustainability institutions are the foundation to re-open the economy. This is not only confined to messages and declarations but must be specified with models and importantly gauges for measuring. The Corporate Sustainability Index (CSI) is not just a set of 127 indicators but a very scientific and effective business management tool specifically designed for Vietnamese businesses. CSI helps them specify the action roadmap for sustainable development and answer the questions by many other businesses in Vietnam: What is sustainable development? What do businesses need to have sustainable development?

After four years of implementation, the Program for Benchmarking and Announcing Sustainable Companies in Vietnam has obtained significant achievements. Specifically:

- More than 1,500 enterprises have joined the program, with more than 300 recognized to be sustainable companies

- Raising awareness and encouraging the business community to pursue sustainable development in general and stronger corporate governance in particular.

- According to a report on corporate sustainability of enterprises participating in the Program in 2016-2018, released by VBCSD-VCCI in 2019, having joined the Program, companies witnessed significant improvement in business performance and productivity and excelled their peers that did not take part in the program. Typically, when taking into account the average labor productivity in 2018, participating companies reported that an employee made more than VND7.5 billion a year while an employee of non-participating enterprises was only VND830 million.

Besides, according to VCCI President, sustainable development must be a common concern, not only for large-scale and multinational corporations but also for micro, small and medium-sized enterprises. Thus, he hoped that there will be a system with three sets of indicators applicable to different sizes and adaptability of enterprises: Large, medium, small and micro as the way we categorize our education system: Tertiary, secondary and primary.

In 2020, the Program will receive applications from businesses of all sizes and fields across the country in the form of hard or electronic copy, all free of charge. Candidate companies will fill in the CSI form with 127 indicators categorized in four areas: Sustainability Performance Index, Governance Index, Environment Index, and Social - Labor Index.

Remarking on new points, a representative of the VBCSD Secretariat said that CSI 2020 was updated with many new contents by VBCSD-VCCI and leading experts in social and economic fields to comply with requirements from important free trade agreements (FTAs) that Vietnam recently signed (e.g. CPTPP - Comprehensive and Progressive Agreement for Trans-Pacific Partnership, EVFTA - EU-Vietnam Free Trade Agreement) as well as important changes in labor and environmental policies that produce significant impacts on business operations. In particular, the issues related to the 17 Sustainable Development Goals (SGDs) and the National Action Plan for Implementation of the 2030 Agenda for Sustainable Development were streamlined and integrated into the CSI 2020.

On the business side, VCCI President Loc encouraged each company to integrate CSI into the heart of its management strategy, apply CSI for sustainability reporting, regularly refer to the index to promptly detect its weaknesses and shortcomings in business for improvement, and at the same time, grasp opportunities for development investment. The more businesses apply CSI, the more professional and methodical their corporate governance will be. This will help them improve their competitiveness, and enhance their resilience and recovery in all scenarios.

The Program for Benchmarking and Announcing Sustainable Companies in Vietnam in 2020 was jointly launched by VCCI-VBCSD in coordination with the Ministry of Labor, Invalids and Social Affairs, the Ministry of Natural Resources and Environment, and the Vietnam General Confederation of Labor. The deadline for receiving applications is August 15, 2020. The Announcement Ceremony of Sustainable Businesses is slated for November 2020 in Hanoi.

Mr. Nguyen Van Duc, Vice Chairman of TNG Investment and Trading JSC

Adversities such as epidemics, social changes, population growth, urbanization speed and inequality in development opportunity are causing systematic and direct effects on sustainable growth opportunity of any company in the long term. The garment and textile industry in general and TNG in particular have faced many challenges.

Since its establishment, especially after it went public and floated its shares on the HNX, TNG has always pursued sustainable development, considering it a crosscutting principle and operation of the company. We understand that, to survive, we must align our interests with the prosperity of the nation and the rights of the community and move towards sustainable development in the long term.

TNG integrated all sustainable factors into the company’s production and business activities. Specifically, TNG used CSI to self-assess regulatory compliance and measure economic, environmental and social sustainability; integrated CSI information with the company’s risk management system; constructed environment-friendly, energy-efficient green factories according to LEED international standards and LOTUS Vietnam standards.

Without doubt, adopting CSI is a commitment to pursue sustainable and transparent development of the company’s business operations.

Mr. Ta Bao Long, Communications Director, Tetra Pak Vietnam JSC

Since its presence in Vietnam, Tetra Pak has set its own responsibility of promoting the entire industry towards the highest environmental standards and paving the way for many sustainability initiatives. Tetra Pak has implemented these activities since 2007.

Having studied CSI, Tetra Pak found it perfectly suited to the company's criteria. Applying it does not change the company’s development objectives but makes the corporate governance better. Besides, due to the extensive coverage of environmental, human and other factors, when it is applied, we feel very confident because these indicators are completely similar to what Tetra Pak is pursuing. This index fits well not only FDI enterprises but also others because, as Dr. Vu Tien Loc, VCCI President said, this index is close to international standards and useful for businesses to integrate better into the world economy.

Tetra Pak pledges to accompany VBCSD in the coming years to contribute further to the common goal of Vietnam’s sustainable development.

Ha Thu (Vietnam Business Forum)