Scaling Up Corporate Sustainability Standards

9:59:31 AM | 8/12/2020

The year 2020 underscores the importance of sustainable economic growth and corporate governance as the Vietnam Chamber of Commerce and Industry (VCCI) has submitted a program on scaling up the Corporate Sustainability Index (CSI) to the Government.

Updated and improved sustainability index

According to Mr. Nguyen Quang Vinh, General Secretary of VCCI and Vice Chair of the Vietnam Business Council for Sustainable Development (VBCSD), the program is an important responsibility assigned by the Government to VCCI as per Decision 1362/QD-TTg on ratifying the plan for sustainable private companies to 2025, with a vision to 2030. In addition, in September 2020, the Government issued Resolution 136 to speed up the fulfilment of sustainable development goals in all sectors, levels and localities from now to 2030. This reflected the Government’s acknowledgement of VCCI-VBCSD’s efforts in building a powerful business community in the past years.

“The application of CSI standards to business does not result in an increase in administrative procedures and costs, which was our prerequisite principle when we worked out this program. We have also planned to build a new set of CSI standards,” he emphasized.

The difference between criteria and the index is the former represents contents that companies need to fulfil in economic, environmental and social areas. Meanwhile, the current set of criteria is a collection of questions about corporate sustainability information.

After four years of carrying out the Program on Benchmarking and Announcing Sustainable Businesses, VBCSD has received positive responses from businesses. Each year, the CSI Index is revised and updated to be in line with Vietnamese laws and approach international standards. In 2020, the CSI Index has been updated with 127 indicators. VBCSD provides businesses with basic information about sustainable corporate governance, helping them with strategic actions to transform their normal business model into the sustainable business model.

Meeting business needs

After more than four years, VCCI-VBCSD has conducted a survey on CSI impacts on corporate governance of program-joining enterprises. The survey showed that they carried out much better information disclosure than those that did not join the program (control group). Specifically, joining companies made sustainability reporting three times more than non-participating ones. Besides CSI, sustainability reporting is increasingly recognized as an important tool for businesses to attract investors and improve their position to the Government, authorities, investors, partners, customers and stakeholders.

As for competitiveness, the survey showed that most candidate companies had a quite positive outlook on competitiveness progress. A majority of companies fulfilling sustainable development goals said that their performance was higher than that of their competitors (control group) in the market.

Notably, product research and development was invested more by joining companies (69%, compared to 24% of the control group). Marketing was also done better by joining firms, when only 27% of the control group confidently performed better than their competitors.

Mr. Vinh said, with these positive results, VCCI-VBCSD believed that when the CSI scale-up program is launched, sustainable corporate governance will be given a complete facelift.

“In addition to policy study and construction, completing the CSI Index is an expression of the companionship of the government and central agencies with the business community. The ultimate goal is to eradicate all conflicts in business activity. The economic values that businesses create are meant to create a better world. That is also what I always emphasize “better business, better world,” he emphasized.

Source: Vietnam Business Forum