Sustainable Development and New Business Mindset

9:46:15 AM | 5/30/2022

Many companies have gradually shifted their approach and strategy from “business for profit” to “responsible business,” said Mr. Nguyen Quang Vinh, Vice President of VCCI, in an interview granted to our reporter. Huong Ly reports.

What do you think about the efforts to promote and enforce sustainable development on the business community?

For businesses, sustainable development can be simply understood as a corporate governance strategy adaptable to all circumstances, built on the harmony of economic benefits (profit and revenue) and benefits of employees and environmental protection, thus helping them strengthen competitiveness and achieve long-term sustainable growth. Therefore, in recent years, many companies have gradually shifted their approach and strategy from "business for profit" to “business for responsibility.”

Over the past 10 years, VCCI has importantly helped the Vietnamese business community to change business thinking, and pursue and adopt a sustainable business strategy through activities carried out by the Vietnam Business Council for Sustainable Development (VBCSD-VCCI), most notably the Corporate Sustainability Index (CSI). After six editions, we have noticed that more Vietnamese enterprises are joining the CSI Program. Most recently, in 2021, Vietnamese and foreign companies accounted for 55% and 45% in the Top 10 sustainable companies, respectively. In the Top 100, the respective shares were 63% and 27%. This is showing readiness, transformation and business progress to increasingly strong and progressive sustainability of Vietnamese enterprises.

After four COVID-19 pandemic outbreaks, the Government and the business community have all understood more clearly the role of sustainable development. This is not only a "compass " for business development in a good time but also plays an important role in leading businesses to get out of crisis to recover. Companies having sustainability strategies and applying the Corporate Sustainability Index (CSI) have shown much better resilience than others. As a result, their resilience is stronger.

Could you tell us about the new features of the Program for Benchmarking and Ranking Sustainable Businesses in 2022?

This year's program continues to be implemented under the direction of the Ministry of Natural Resources and Environment, the Ministry of Labor, Invalids and Social Affairs, the Vietnam General Confederation of Labor and the Vietnam Chamber of Commerce and Industry (VCCI). At the same time, the program also continues to use the Corporate Sustainability Index (CSI) as the basis for assessing corporate sustainability. With 130 indicators, CSI Index 2022 is adapted to a new approach toward responsible business as specified in relevant laws and regulations: Respect for legitimate rights and interests of employees and other stakeholders in the community, based on the revised Labor Code 2019, effective from January 1, 2021; Law on Environment 2014 and revised Law on Environment 2020 related to commitments on climate change adaptation and voluntary nationally determined contributions (NDC) at COP-21 and COP-26; GRI and ESG sustainability reporting standards; ISO26000 social responsibility standards, and finally new-generation free trade agreements like EVFTA, CTTPP, RCEP and UKFTA.

This year, in addition to evaluating and announcing the Top 100 sustainable businesses, we will also award outstanding businesses for fostering the circular economy, response to climate change, women's empowerment and gender equality in the workplace, and responsible business for human rights and children's rights.

In the new CSI standards, you have just mentioned ESG. Would you mind telling us more about this standard?

At the ASEAN-U.S. Summit, part of the Prime Minister's visit to the United States, one of the issues raised to boost Vietnam – U.S. bilateral trade relations is businesses are challenged by environmental, social and governance (ESG) matters. By integrating ESG into the new edition of the CSI Index, businesses will have a more intuitive approach to their governance through three aspects:

The first is business-environment interaction, evidenced by businesses’ actions to combat climate change, conserve biodiversity, protect natural resources, reduce carbon emissions, and mitigate air and water pollution.

The second is the impact of enterprises on society and the community through programs to protect occupational health and safety, improve working conditions, and fulfill their legal obligations to protect human rights in the workplace and secure the privacy and data security of customers and partners.

And finally, principles need to be applied when building the governance apparatus at each enterprise, including transparent governance, ethical business, and increased ownership of shareholders and employees, independence of the Board of Directors, and ultimately building a diverse, inclusive culture in the workplace.

Thus, needless to say, the above factors are important to constitute a detailed governance framework that businesses of different sizes can rely on to build governance and development strategies. That is also our goal of building the CSI Index 2022, a sustainability assessment tool for every business, irrespective of their sizes, from giant to micro.

By Vietnam Business Forum