Business Leaders Embracing Social Responsibility

10:01:19 AM | 3/14/2024

The exercise of social responsibility extends beyond a mere strategy for entrepreneurs to attain their business objectives. It is increasingly being recognized as an inherent duty of business leaders, a trend that is gaining widespread acceptance and becoming an integral part of their operations. Entrepreneurs, in their roles as owners, leaders, managers and representatives of their businesses, are demonstrating their commitment to society. They are not only contributing to the betterment of their workers’ quality of life but also adding value to the community and society at large.

Many businesses overlook social responsibility

Dr. Nguyen Thuy Linh from the General Department of the Commission for Management of State Capital at Enterprises (CMSC) said that more campaigns on corporate social responsibility (CSR), environment and sustainable development have been launched by companies in Vietnam like Toyota with “Go Green” Campaign (a televised educational program that provides basic knowledge about environmental issues, along with the Go Green Student Club and many other community events); Honda with “I love Vietnam” Campaign (a televised education program on road traffic safety); Unilever with environmental hygiene education program for children in mountainous areas; Microsoft, Qualcomm and HP with Topic64 information technology training program; Panasonic with “Eco Ideas” Campaign; and Canon with eco-bag exchange activity.

Not only foreign-invested firms but many Vietnamese companies have also exercised social responsibility such as Vinamilk, FPT and Vingroup which are sustainable businesses that effectively adopt environmental - social - corporate governance (ESG) investment criteria in terms of ethics and responsibility to society. In 2020, Vinamilk was highly appreciated by investors for applying ESG criteria in business operations with an ESG score 58% higher than the industry average. The idea of building the circular economy with biogas systems on dairy farms to turn waste into resources such as fertilizer, water and gas helped Vinamilk reduce waste and greenhouse gases and operate environmentally friendly farms. FPT Corporation developed the 3P strategy (Profit, People, Planet). Accordingly, in addition to generating profits, the firm paid attention to practical activities like improving life quality, bettering the working environment and joining charity and blood donation activities.

However, many businesses still ignore social responsibility. Linh said, the lack of resources and commitment to social responsibility of Vietnamese businesses is the main cause of this reality. Many consider economic benefits above all, pursue profits at all costs, gain illegal profits for themselves and cause physical, mental and health damage many times more than their short-term gains. Many even think that “corporate social responsibility is only for large, multinational corporations” or “corporate social responsibility is a luxury option of developed countries, not developing countries”. Therefore, it is important to change their attitude from “corporate social responsibility as a cost” to “corporate social responsibility as an investment”. From another perspective, seeking to pursue long-term, sustainable corporate social responsibility, some domestic businesses face the challenge of lacking human resources with knowledge and skills about corporate social responsibility and sustainable development.

Pressures from the public, consumers and international business standards are main driving forces for social responsibility of Vietnamese businesses to be enhanced. Serious environmental pollution caused by factories, food safety incidents and pesticide residues in fruits and vegetables have raised concerns about social responsibility of domestic businesses and an alarming bell against Vietnamese business ethics and culture.

Besides, Vietnamese exporters encounter certification and standards issues when foreign investors and buyers require them to conduct business with respect to people, community and environment. For example, the Vietnam – U.S. textile and apparel agreement includes an obligation for Vietnamese authorities to encourage exporters to adopt corporate social responsibility rules in exchange for access to the U.S. market.

Building a complete legal framework for actions

To raise the social responsibility of entrepreneurs, according to Dr. Nguyen Thuy Linh, the Government needs to build a complete legal framework for entrepreneurs and enterprises to take action. In the current integration period, Vietnam is increasingly participating in many trade agreements where there are many commitments to the quality of the working environment and environmental issues. The Government, as a social regulatory agency, is necessary to introduce a unified reference system for companies to follow and take action.

In addition, it is necessary to boost communications to raise business awareness about gains of exercising social responsibility. VCCI has coordinated with many agencies to launch the “Corporate Social Responsibility Awards” and “Outstanding Vietnamese Entrepreneurs”. These activities have produced a positive impact on the awareness of entrepreneurs and enterprises in carrying out social responsibility. VCCI has also worked with entrepreneurs and enterprises to better exercise social responsibility in addition to having an implementation quality evaluation system where there is a basis for praises and rewards. Moreover, entrepreneurs and enterprises can organize seminars, conferences and dialogues with employees to reassess outcomes and share matters of concern in fulfilling social responsibility.

Dr. Nguyen Thuy Linh emphasized that it is necessary to create a specialized department in charge of social responsibility. This department will be responsible for researching and collecting information about issues within the business. Its personnel will work directly with employees to hear their expectations and opinions for a better working environment. Capturing direct opinions will help implement social responsibility effectively and realistically and avoid superficial acts.

Besides, to facilitate entrepreneurs to perform their social responsibility well, the Government needs to have more appropriate policies and laws for entrepreneurs, with more support and just treatment to the private economy, said Dr. Dang Thi Hong Hoa from the Department of International Cooperation, Ho Chi Minh National Academy of Politics. The Government needs to effectively introduce more appropriate policies on attraction, employment, appreciation and treatment of entrepreneurs to encourage them to work wholeheartedly for the sake of the nation. It also needs to have policies and measures to enable entrepreneurs to invest in technological research and innovation, improve product and service quality, conduct design research and test new products and services. At the same time, it necessarily focuses on investing in business development in high-tech zones; enhance the performance of industrial zones, craft villages and agricultural areas, and especially strengthen investment association and cooperation between enterprises and entrepreneurs with workers, farmers and scientists.

Particularly, it is important to accelerate administrative reform for entrepreneurs and enterprises, uphold the responsibility and accountability of state agencies, facilitate entrepreneurs and enterprises to run successful business; encourage and take measures to protect entrepreneurs against negative acts, corruption and waste. At the same time, it is necessary to have a breakthrough perspective to promote Vietnamese cultural and values, foster political positivity, labor capacity, patriotism, dedication, and sense of responsibility of Vietnamese people in general and entrepreneurs in particular.

By Anh Mai, Vietnam Business Forum