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Promote the role of businesses in environmental protection and green growth


   Promoting the role of enterprises in environment protection is the key to resolving urgent issues due to the current conditions of the environment, especially in the context that State budget spending on environmental protection has been reduced and tightened. Therefore, it is important for enterprises to attach green growth and sustainable development to their business operations in order to socialise environmental protection activities.

   1. Current status of the connection between enterprises, green growth and environmental protection in Viet Nam

   According to the report “Business performance of Vietnamese enterprises in 2011 - 2014 period” released by the General Statistics Office (GSO), the number of Vietnamese enterprises in 2011 - 2014 increased sharply, to more than 400,000 enterprises (2014), from more than 279,000 (2011). However, the scale of business in those enterprises in terms of labour and capital rose at a slow pace. At present, 72% of those companies are supermicro businesses, in terms of labour, and 76% of them are small businesses, in terms of capital. It can be seen that most small enterprises are among the main challenges for environmental protection activities, due to their being limited in receiving access to modern, environment-friendly technologies to reduce the negative impact of their production on the environment and improve their competitiveness, as Việt Nam integrates more deeply into the global community.

   Also, many enterprises have caused serious environmental pollution. Until now, 44 of 439 companies that are responsible for environmental pollution, in accordance with Decision 64/2003/QD-TTg, have not completed their waste treatment systems and caused prolonged environmental pollution; and 268 of 435 enterprises that caused serious environmental pollution in accordance with Decision 1788/QD-TTg are working to completely resolve the impact of this pollution, 136 of whom are lagging behind schedule for completing the solutions. The percentage of producers and businesses disposing of sub-standard waste water and emissions to the environment was 45.9% (2011) and 24.5% (2015). However, many industrial zones, industrial clusters and craft villages have not invested in waste treatment systems, causing environmental pollution. Overall, there are a total of 283 active industrial zones across the country. Of these, 212, or 75% of the industrial zones have completed building collective waste water treatment systems, although only 5% of the 615 active industrial clusters have invested in collective waste water treatment systems. The remaining industrial zones and clusters treat waste water by their own techniques and dispose waste water directly into the environment, causing substandard waste water pollution.

   Việt Nam has faced many challenges from the consequences of environmental pollution in its efforts to achieve green growth and sustainable development. In fact, there have been some urgent cases of environmental pollution that have rocked the public; with waste water used in daily life activities in the urban areas being directly disposed into the environment without being processed; living and industrial wastes not being well managed and having a negative impact on the environment; the total area of natural ecosystems being reduced rapidly; and biological diversity being damaged.

   Although environmental pollution issues have been increasing and taking place in various fields, the resources to resolve these issues remain limited. At present, funding for environmental protection mainly comes from State budget sources, such as environmental protection funds, investment and development funds, the national target programme and some environmental protection projects. The State has increased its funding for work on environmental protection, however, its efforts have remained limited and insufficient to completely resolve urgent problems. Besides this, there are still problems with the disbursement and use of State funding for environmental protection, for example, State funding for environmental protection has been misused in both central and local areas.

   The practices above have set some significant challenges for the implementation of the National Action Plan on Green Growth, with the focus on “greenising” local production and promoting “green” technologies in Vietnamese businesses. Therefore, it is required to push local companies to care about and make investments in activities to protect the environment.

Enterprises’investment in environment-friendly technologies will be able to reduce their production costs by using natural resources, energy and other resources less

   2. The responsibilities and interests of enterprise in making investments in environmental protection actions and green growth operations.

   Before discussing the benefits that local enterprises may receive from investing in environmental protection and green growth, it is necessary to review Corporate Social Responsibility (CSR). According to the World Business Council for Sustainable Development, “Corporate Social Responsibility is the continuing commitment by businesses to contribute to economic development, while improving the quality of life of the workforce and their families, as well as of the community and society at large.” Therefore, CSR means companies must contribute to economic sustainable development and comply with regulations on environmental protection. Superior CSR programmes for environmental protection would benefit both enterprises and the nation.

   At the level of enterprises: Businesses will have the following benefits when they comply with CSR and environment protection standards:

   The business image and brand: With better awareness in society on the importance and meaning of environment protection, businesses taking part in environment protection will be able to earn the trust of society and consumers for their products and businesses. Therefore, their image and brand will witness an improvement and their market share and production will be sustained.

   Businesses have opportunities to integrate deeper into the global supply chain in the context of global economic integration: In recent years, environmental issues have become an indispensable part of bilateral and multilateral trade agreements between Viet Nam and other economies and organisations. Therefore, good application of CSR and environment protection by local companies will help their products meet international standards.

   Minimized costs and improved production efficiency: Companies that invest in new, environment-friendly production technologies could see an increase in their production costs at the beginning, but in the long term, they will be able to cut costs by reducing the use of energy, input materials and legal expenses for environmental issues, such as fixing environmental pollution incidents and creating a more efficient working environment for employees. In addition, businesses will increase their competitiveness in the market, especially keeping in mind that more and more countries are implementing their national programmes on green shopping and consumption.

   At the national level

   When companies increase their spending and investment in activities to protect the environment, they will help implement the policies of the Communist Party and the Government to “Enhance the management of natural resources, environment protection and sustainable development,” “restructuring of the economy” and “national strategy on green growth and sustainable development.”

   Increased investment of companies in environment protection will help create and boost new green economic sectors, in which there are businesses supplying and producing environment-oriented goods and services, offering more employment opportunities and improving living conditions of the people.

   Increased investment in environment protection will also help the State reduce its budget spending for environment protection activities. In the context that sources for State budget are limited, active participation of companies in building infrastructure and solutions on environment protection will help socialise environmental protection activities, easing demand and pressure from local authorities on State budget disbursement for environmental protection activities.

   Enhance restructuring and transformation of the economic growth model: Mobilizing companies to make investment in environment protection will be one of the key solutions to transform the country’s economic growth model and restructure its economy in the period 2011 - 2020.

   The main benefit the nation may get through mobilising companies to perform their CSR is the improvement of Vienam's position and strength in the global community. In addition, the country will be able to ensure environmental security, social stability and achieve sustainable development goals, especially the 17 targets that are part of the global millennium sustainable development goals that must be reached by 2030.

   3. Recommendations to encourage companies to take part in environment protection and green growth actions to develop the country in a sustainable way.

   The following are possible solutions to encourage local businesses to participate in environmental protection and green growth activities for the nation’s sustainable development:

   The Government must increase efforts to popularise policies on environment protection to raise awareness and social responsibility of enterprises on green growth to help them achieve sustainable development, implement the national green growth strategy and achieve the millennium sustainable development goals by 2030.

   In a market economy, companies and people are what create products and boost the country’s economic growth, leading it towards prosperity. Therefore, we need to complete the market economy mechanism in managing the use and exploitation of natural resources and environmental protection, motivating and encouraging companies to actively enhance their activities to protect the environment and achieve green growth.

   We need to study and develop economic tools and new financial mechanisms to mobilise resources from society and the business community for environmental protection. The Government needs to apply basic market economy principles in managing environmental issues such as “polluter pays principle” and “beneficiary pays principle,” and flexibly apply economic tools that suit practices in Việt Nam such as taxes, fees, charges, deposits and waste and emission trading quotas to ensure companies’ actions are subject to the legal system.

   The Government needs to complete its environmental management system from the central level to the local level, strengthen cooperation between ministries, sectors and local authorities in inspecting, checking and dealing with environmental pollution cases made by companies, and improve the role of local people and authorities to monitor enterprises in environmental protection.

   The Government needs to review, adjust and supplement regulations on environment protection to improve their validity, effectiveness and enforcement for businesses and connect them with green growth and sustainable development.

Nguyễn Thế Chinh, Lại Văn Mạnh

Institute of Strategy and Policy on Natural Resources and Environment

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