SCG Passion for Inclusive Green Growth: Driving Force Towards Net-Zero Society by Applying ESG Strategy

11:21:53 AM | 6/25/2024

Pursuing a green economy has emerged as a prevailing trend that numerous nations and businesses worldwide embrace. Within this landscape, SCG stands out for its steadfast dedication to sustainability, exemplified through its proactive adoption of the Inclusive Green Growth direction.

Embedded within the holistic framework of the ESG 4 Plus strategy, SCG's initiatives underscore its commitment to Net Zero. Through these strategic efforts, SCG not only demonstrates its resolve to address pressing environmental challenges but also catalyzes inclusive and sustainable development within the communities it operates.

Mr. Thammasak Sethaudom, President & Chief Executive Officer of SCG

SCG's vision for a green economy in Vietnam

In the face of global economic and climate fluctuations, transitioning to a green economy has become imperative for businesses worldwide. For Vietnamese enterprises, this shift is not just about adhering to the Vietnamese government's commitment made at COP26 but also about meeting the growing demands of environmentally conscious consumers. However, green economic development in Vietnam is still in its nascent stages, necessitating substantial investments in capital, human resources, and scientific and technological advancements. Despite requiring a capital investment of $34 billion for its green transition, Vietnam secured only $200 million in private investments in 2023.

Leveraging its extensive vision, resources, and experience of a more than 100-year conglomerate, SCG has been at the forefront of implementing green economy principles throughout its production and operations in Vietnam. SCG's approach to sustainability is encapsulated in its Inclusive Green Growth direction, which includes increasing the share of clean energy that helps reduce costs, expediting green innovations to address global megatrends, and expanding into high-potential markets. Developed under the framework of the ESG 4 Plus strategy (Set Net-Zero – Go Green – Reduce Inequality – Embrace Collaboration Plus Trust through Transparency), this direction underscores SCG's unwavering commitment to sustainability goals and transparent governance.

Towards net zero target

To address the urgent global issue, SCG is committed to achieving net-zero greenhouse gas emissions by 2050 through innovative solutions. For years, SCG has actively promoted a low-carbon society, balancing business growth with reduced carbon emissions. By integrating advanced technologies into its production processes, SCG continues to lead the way in sustainable business practices.

Accordingly, SCGP (Packaging business of SCG) in Vietnam has been actively promoting the use of solar energy as a source of electricity. With solar energy production capacity distributed across SCGP's factories in different provinces, the company is committed to sustainable energy practices. In 2023, the company expanded the installation of solar energy to its nine subsidiaries, bringing the total capacity of solar energy production to around 22.52 megawatts to date. This has helped to reduce greenhouse gas emissions by 20,855 tons of carbon dioxide equivalent per year.

Another notable example is the low-carbon cement from SCG’s Cement and Green Solution Business. The standout feature of SCG Low Carbon Super Cement is its green production process, which helps reduce carbon emissions by 20% compared to conventional cement. To achieve this goal, SCG has improved its production processes to reduce energy consumption and carbon emissions, while increasing the proportion of renewable energy sources and alternative fuels to replace fossil fuels. Additionally, the company has implemented a Waste Heat Recovery system at its cement production plants to further reduce carbon emissions.

Promoting green products

With the goal of going green, SCG is dedicated to eco–friendly innovation so consumers can take part in easing greenhouse gas emissions and reducing resource consumption in line with the circular economy notion. The target is set to increase the proportion of the SCG Green Choice label products by twofolds from 32% to 67% by 2030.

Going green, pioneering a groundbreaking innovation in Vietnam, Prime Group, a subsidiary of SCG, has introduced Slim Tiles, setting a new standard in the tile industry. These lightweight, easily installable tiles not only enhance convenience and efficiency in installation but also significantly contribute to environmental sustainability. By reducing raw material and energy consumption by 40%, Slim Tiles represent a major advancement in eco-friendly building materials. This innovation aligns with global trends towards sustainable construction practices and demonstrates Prime's commitment to environmental responsibility, marking a significant step forward in the pursuit of green building solutions.

Not only introducing environmentally friendly products, SCG also focuses on promoting green initiatives in the production process. Accordingly, Long Son Petrochemicals Complex (LSP) – a flagship project in Ba Ria-Vung Tau province and the first petrochemical complex in Vietnam, invested by SCGC (Chemicals Business of SCG) – employs advanced technologies with a strong focus on safety measures, environmental protection, and social responsibility. The complex has implemented Vietnam's first Enclosed Ground Flare system. This system efficiently burns off excess gas, eliminating smoke, minimizing noise, and ensuring the flame is not visible, in contrast to conventional elevated flaring systems. Moreover, LSP conserves 24 hectares of mangroves on-site in Long Son commune.

Efforts to reduce inequality

SCG understands that inequality threatens long-term social and economic development, undermines poverty reduction efforts, and diminishes people's sense of fulfillment and self-worth. Sustainable development and a better planet for all are unattainable if people are excluded from opportunities for a better life. Therefore, for years, SCG has actively worked to ensure inequality reduction in the areas where it operates. The conglomerate focuses on creating educational opportunities for the younger generation, ensuring no one is left behind, and training them to adopt a green mindset and become future leaders of society.

With the annual scholarship program SCG Sharing the Dream, now in its 17th year, SCG aims to empower young students to pursue their educational aspirations. The program not only provides financial support to students in difficult circumstances but also inspires them to overcome adversity and live their dreams to the fullest. Over the years, the program has empowered more than 5,500 quality students, laying a solid foundation for talented Vietnam's human resources with a new green mindset.

In addition to its scholarship program, SCG demonstrates its dedication to social responsibility by organizing Children's Day events for students at the School for Children with Disabilities in Ba Ria-Vung Tau Province. These events, which have been held for several years, feature practical activities such as career counseling, and celebrations on International Children's Day. By providing support and inspiration to these young students, SCG is fostering potential green warriors creating a fresher future with Net Zero.

Besides education, SCG contributes to reducing inequality by creating livelihoods for disadvantaged local communities. Accordingly, LSP has actively engaged in community engagement initiatives, including vocational training for local people, procurement, and packaging instructions. Notably, the dried seafood gift package features eco-friendly water hyacinth handicraft baskets and high-quality dried specialties, contributing to Long Son's economic development. By enhancing the quality of local Long Son products, LSP is contributing to the betterment of community income and, consequently, improving the quality of life for residents.

With the belief that the younger generation can achieve a better life through education, SCG scholarships are part of SCG's ongoing efforts to provide access to quality education for young people, thereby contributing to the sustainable development of Vietnam

Fostering collaboration

Sustainable development and the net-zero goal cannot be achieved through isolated efforts alone; it requires collaboration from multiple parties. SCG's inclusive approach involves collaboration with SMEs and local communities to drive mutual growth and transformation. This inclusivity extends across generations, encouraging collaboration for innovation and progress. SCG collaborates with various stakeholders, including government entities, employees, and the younger generation, to ensure comprehensive engagement in sustainability initiatives.

In particular, SCG collaborates annually with the Ministry of Natural Resources and Environment (MONRE) to organize the Circular Economy Forum. This forum provides a platform for sharing best practices and discussing the sustainable development of Vietnam, motivating other stakeholders to join the green movement. The Vietnam Circular Economy Forum 2023 is particularly significant as it introduces the NAPCE (National Action Plan on Circular Economy) to stakeholders across various sectors. This event plays a crucial role in disseminating the NAPCE, raising awareness, and garnering support for its implementation.

Internally, SCG fosters employee awareness and encourages green practices through consistent policies and initiatives such as the "SCG có gì hay?" (SCG Do you know it yet?) video series. These efforts aim to cultivate a culture of sustainability within the organization.

Furthermore, SCG is committed to educating the younger generation about ESG (Environmental, Social, and Governance) principles. Activities like the SCGP Speak Out Challenge competition and ESG Engagement Series for SCG Sharing The Dream scholars provide the young with platforms for learning and development.

Accordingly, the annual SCGP Packaging Speak Out competition promotes innovative and eco-conscious packaging solutions, inspiring Vietnamese youth to contribute to sustainable business practices. In 2023, under the theme of "Sales Promoting Packaging," this year's competition served as a beacon of inspiration for the Vietnamese youth. Driven by a profound passion for customer-centric design, the competition not only unleashed the creativity of Vietnamese young people but also provided a new avenue to promote businesses. By offering inventive, marketable, and eco-conscious packaging solutions tailored to a variety of needs, SCGP Packaging Speak Out 2023 - Vietnam showcases the innovative spirit of the nation's youth while facilitating sustainable business practices.

Moreover, the SCG Sharing The Dream Scholarship organizes ESG activities to engage with the young generation and nurture scholars into global citizens who contribute to the country's sustainability. Through online and offline training, video lectures, expertise and guest speakers sharing, factory visits, and collaborative ESG projects, where students gain practical knowledge and are empowered to make a positive impact on their communities. These initiatives reflect SCG's dedication to sustainability and building a brighter future for Vietnam.

Commitment to fairness and transparency

Moving forward to the Net-Zero future, all these initiatives are carried out with a commitment to transparency, reflecting the ESG 4 Plus strategy that SCG has been consistently pursuing over the years. The conglomerate has continuously directed the organization towards the ESG 4 Plus concept with good governance as operations remain to be fair, transparent and accountable. Moreover, SCG focuses on conveying the values to the employees, generation after generation, building on the corporate culture.

With these efforts, SCG was recently honored for the third consecutive year in the list of Outstanding Foreign-Invested Enterprises (FIEs) in Vietnam at the Golden Dragon Awards 2023-2024. Previously, six-member companies of SCG, including four companies under PRIME Group (Prime Dai Loc JSC, Prime Dai Viet JSC, Prime Tien Phong JSC, Prime Yen Binh JSC), as well as Vina Kraft Paper Co., Ltd. and SCG Concrete Roof (Vietnam) Co., Ltd., were also recognized in the Top 100 Sustainable Enterprises of 2023 (CSI 2023).

By steadfastly adhering to these principles, SCG not only contributes to the sustainable development of Vietnam but also sets a benchmark for businesses worldwide to follow. Through its comprehensive approach, SCG exemplifies how businesses can achieve economic growth while fostering environmental and social well-being.

By Van Luong, Vietnam Business Forum