Enterprises Become More Competitive by Promoting Corporate Sustainability

The Covid-19 pandemic has pushed many businesses to reconsider their management thinking towards sustainable development. The application of the Corporate Sustainability Index (CSI) to pursue 17 sustainable development goals will help enterprises both improve business efficiency and bring better values ​​to the environment and society.

Requirement for a change

At the program "Dialogues with the press: Sustainable development - lessons learned from the Covid-19 pandemic" recently organized by Vietnam Business Council for Sustainable Development (VBCSD) - Vietnam Chamber of Commerce and Industry, Mr. Nguyen Quang Vinh, Secretary General of VCCI and Vice Chair and General Secretary of VBCSD, said that during the Covid-19 pandemic, the amount of plastic waste increased sharply because people had to restrict their travel, leading to buying more ready-made items. Therefore, VBCSD is supporting businesses to implement the program of zero emissions into nature. This is a great effort for businesses, a collective initiative which needs to be supported and spread.

According to Ms. Phan Thi Thanh Xuan, Vice President and General Secretary of Vietnam Leather, Footwear and Handbag Association (LEFASO), due to the impact of the pandemic, enterprises in the leather and footwear industry have faced many difficulties and have had to leave workers go in the face of heavy impacts from global supply chain disruption. Many businesses have also shown weakness in risk management, crisis management and adaptability.

"When the pandemic hit, some businesses were unable to proactively develop timely and effective solutions, leaving themselves in difficult situations, even on the verge of collapse," Ms. Bui Thi Thu Trang, Representative of Deloitte Vietnam Co., Ltd said.

However, according to Ms. Trang, the Covid-19 pandemic has also urged many businesses to quickly change their mindsets in administration and management, prioritizing and paying more attention to building up a professional strategy of risk management for themselves in order to withstand and adapt to unexpected shocks.

Experts said that enterprises needed to associate business goals with strategies of sustainable development, green growth, environmental protection, good implementation of social security. The cost to implement sustainable development goals is not lost, but it is an investment in a more stable future for business development.

Effective business management tool

Mr. Nguyen Quang Vinh said that creating a sustainable business community was an important orientation that VCCI has been pursuing. Well implementing sustainable development criteria will open up many opportunities for businesses and countries to create more than 300 million jobs and earn more than U.S.$2 trillion.

In order to realize the above objective, it is important to have a set of indicators that are designed with the criteria of sustainable development based on three pillars of "economy - society - environment" according to international standards, and are feasible in Vietnam. Mr. Nguyen Quang Vinh affirmed that the CSI was an effective business management tool, which helped effectively support enterprises in developing business and production strategies towards sustainable development.

In addition, businesses also use CSI to make sustainability reporting. Sustainability reporting is gradually becoming an international practice, in the world, there are 30 countries putting the regulation of making sustainability reporting into their legal frameworks as a requirement for businesses. Sustainability reporting also helps businesses to attract investment and look for partners.

According to Ms. Phan Thi Thanh Xuan, in the context of many FTA agreements such as CPTPP and EVFTA having come into force, importers' requirements have been becoming higher and increasingly focused on the standards of sustainable development. “Many importers require each pair of shoes to be accompanied by a CV, which must clearly state how the shoes can be recycled, and how to handle carbon issues. Importers also require businesses to demonstrate conditions of the environment, employment and labor regimes. If businesses cannot meet these requirements, they will not be able to participate in the global supply chain.

Ms. Xuan said that the requirements of those importers were also one of the criteria in the CSI indicators. This set of indicators serves as a measure for enterprises to self-assess their competitiveness for more improvement in operation and more sustainable development.

In fact, in Vietnam, after three years of developing CSI and the Program on Benchmarking and Announcing Sustainable Companies, Mr. Vinh said that this program has brought significant changes in the business community. Specifically, 70-90% of businesses participating in the program have been implementing activities related to sustainable management. More than 80% of participating businesses have integrated environmental protection into their development strategies and plans. About 80% of participating businesses have better policies on social security and employees.

Mr. Pham Hoang Hai, Head of Cooperation Unit of the VBCSD Secretariat, said that the CSI has now been updated to conform to the requirements of implementing commitments in important free trade agreements Vietnam has signed, as well as important changes in labor and environmental management policies for enterprises. Issues related to the 17 sustainable development goals and the government’s National Action Plan to implement the 2030 Agenda for Sustainable Development have also been simplified and integrated into the CSI indicators.

VBCSD organized a field trip to a high-tech farming model that grows Japanese melons by using Israeli technology in Ha Nam province. Mr. Nguyen Hai Tho, Deputy General Director of Vietnam National Seed Group (Vinaseed), said that despite being greatly affected by supply chain disruption during the social distancing period, Vinaseed has not changed its production and business plan this year and has persisted in implementing the goals of sustainable development. Regarding sustainable development, the company always focuses on researching solutions to deal with the negative impacts of climate change. Vinaseed also develops product lines with high productivity, good quality and applies green and safe production technology, contributing to improving the quality of community life. In addition to holding a 20% share ​​of the plant seed market in Vietnam, Vinaseed has exported a lot of products to the EU and ASEAN.

By Huong Ly, Vietnam Business Forum