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Chủ Nhật, ngày 22/05/2022

Corporate Sustainability Index - Effective risk management tool for businesses

29/10/2021

    The fourth wave of the COVID-19 pandemic has caused the Vietnamese business community to face unprecedented challenges. This is the time when businesses need a "transformation" in thinking and doing business. Therefore, choosing sustainable development is no longer a matter of large businesses.

    With the tool to assess the level of sustainable development of businesses as the Corporate Sustainability Index (CSI), the goal of the Program on Benchmarking and Announcing Sustainable Companies in Việt Nam is not only to praise businesses with humanistic business thinking, balancing economic benefits with social development, environmental protection, but also to raise awareness and promote business community to implement sustainable corporate governance. After 5 years of implementation, the Program has attracted many businesses (about 1,500 businesses) operating in different sectors across the country to apply for participation. Being voted in the annual "sustainable companies" list of the Program is a proud title, a recognition of the Government, ministries, departments/sectors, business community, organizations and the society on the activities of pioneering businesses that have made outstanding contributions to the sustainable development of the Vietnamese business community. This title also opens up opportunities for businesses in improving their reputation and brand, attracting human resources and new business opportunities through increasing the trust of partners, investors and shareholders, contributing to business development in a sustainable way, improving the competitiveness of businesses in the context of current international economic integration. Especially, after 5 years of implementation, the greatest success of the Program must be mentioned first of all as the change in awareness and change in business thinking when businesses have more access to the concept of sustainable development. Businesses better understand the benefits of sustainable development, it is not the cost, but above all, it is their close opportunity. According to the Better Business, Better World Report, successful implementation of the 17 Sustainable Development Goals could create a market worth at least 12 trillion USD per year and 380 million new jobs by 2030.

    Additionally, through important programs such as Vietnam Corporate Sustainability Forum (VCSF), National Conference on Sustainable Development, the Vietnam Business Council for Sustainable Development (VBCSD) under the Vietnam Chamber of Commerce and Industry (VCCI) has contributed significantly to promoting dialogue on sustainable development at the national scale, thereby brought sustainable development of businesses into the agenda of the Government, ministries and sectors and put sustainable development at the heart of business strategy of the business community. According to the results obtained from the Quick Survey on Business Situation Amidst the COVID-19 Pandemic and Recommendations from VBCSD Members launched by the VBCSD in early 2020, businesses with strong commitment to sustainable development in general and sustainable corporate governance through the application of the CSI in particular have been suffering less from the COVID-19 pandemic. Typical businesses of the Vietnamese business community such as PAN Group, PNJ, Bảo Việt, and Traphaco all affirmed that their sustainable development orientation has promoted the most obvious effectiveness in the "heart of the storm" of the COVID-19, businesses are more resilient to the challenges of the pandemic. Thus, it is obvious that CSI is an effective risk management tool for businesses. This has been proven through the operation situation of businesses in the current COVID-19 context.

State Vice President Đặng Thị Ngọc Thịnh and delegates at the Announcing Ceremony

for Sustainable Companies in Việt Nam 2020

    This year, VBCSD continues to coordinate with the Ministry of Labour, Invalids and Social Affairs, the Ministry of Natural Resources and Environment (MONRE) and the Vietnam General Confederation of Labour to organize the Program on Benchmarking and Announcing Sustainable Companies in Việt Nam with many changes in selection criteria. The Program will accept registration applications from businesses of all sizes and sectors across the country, either via delivery of hard copies or online declaration, free of charge. Accordingly, businesses participating in the Program will declare information with 119 indicators in four areas: Sustainability, Corporate governance; Environmental; Social and labour indicators. However, the most important progress of CSI 2021 is the hierarchy of indicators into three levels for different sizes of businesses. 53 M indicators are common to all types of businesses and are the minimum indicators for small and micro businesses, 28 C indicators are basic for medium and large businesses, 38 A indicators are advanced indicating that businesses, in addition to complying with the Law, have also developed a healthy business ecosystem, ensuring sustainable business benefits for partners and other stakeholders. Thus, in order to participate, small and micro businesses need to ensure their full implementation of the contents of the M indicators, depending on the actual situation of production and business, they can declare more information according to the C and A indicators to get more bonus points from the Organizer. Similarly, medium and large businesses need to make sure to declare enough information according to the M and C indicators and can declare more information according to the A indicators...

    With the hierarchy of indicators of the CSI 2021 according to different business sizes, VBCSD wants to emphasize and convey the message "Sustainable development is not a distant, big thing only for large businesses, which is very practical and can be made tangible through the good implementation of the legal provisions. Sustainable development can be done at all levels of businesses. This is especially useful for domestic businesses, which are more than 95% small and medium businesses. Now, instead of spending a lot of effort on researching the "matrix" of information, businesses can envision a roadmap to implement sustainable development on a small to large scale, thereby develop their own business strategy and plan in line with current capacity and future orientation. This helps businesses save a lot of time and resources in corporate governance towards sustainable development. In that way, the spirit and culture of sustainable development have been spreading more strongly, reaching even those businesses who once felt "falling out of the net" of development assistance.

    The new feature of the CSI Program 2021 also includes two sub-awards for "Gender equality in the workplace" and "Children's rights in business". These are all contents that the world business community is very interested in, demonstrating the vision of "Leave no one behind" in the culture of sustainable business. Because businesses can contribute to improving the lives of children through their responsible business policies and practices, contributing to sustainable development. Respecting children's rights as part of a business's sustainability program will help develop stronger communities, which is essential to creating an effective, inclusive and stable business environment. With the issue of improving gender equality in the workplace, this is a significant contribution to economic growth, labour productivity, and talent attraction and retention, which are key factors for the sustainable development of businesses. The award is an opportunity for Vietnamese businesses to get closer to international standards on gender equality, aiming to develop an equal, diverse and sustainable working environment.

    Additionally, VBCSD will continue to focus a lot of resources to promote businesses to deploy the circular economy model in production and business activities because this is not only a preeminent model being pursued by the international business community, but it is also an important orientation that has been incorporated into the Government's recent economic development policies. VCCI will also work to expand the circular economy sub-award within the framework of the CSI Program in the coming years.

    Sustainable development is a common global goal with 17 goals, including 169 specific targets. Việt Nam has a national action plan that integrates 17 international goals and selects its specific goals to include in the Communist Party's Documents, the Codes, and the Resolutions on socio-economic development of the Communist Party, National Assembly and Government. Việt Nam has reached the finish line early in implementing a number of UN Sustainable Development Goals and achieved a relatively high ranking in the region (Just behind Thailand). Looking at the long term, to achieve the goals set out in the next ten years, we still have many great challenges. Despite many advances, the spread of sustainable development in the country is still not high. The country currently has about 800,000 businesses, but only about 2,000 businesses (Accounting for more than 2%) are members of the sustainable development business community in Việt Nam and only about 100,000 businesses (Nearly 15%) have access to information about sustainable development. Therefore, CSI will be a tool to help the business community be consistent with the sustainable development goals and spread, go together to the end on this path.

    In the coming time, VBCSD will continue to promote more strongly its core activities: Communication - awareness raising, research, training, international cooperation and partnership to implement the new initiatives on sustainable development for businesses. Along with that, VBCSD will also continue to organize annual forums for dialogue on sustainable development so that the business community has the opportunity to exchange and share experiences in implementing sustainable development, as well as contribute their voices to policy recommendations to create a favourable investment and business environment for businesses. In order to be able to turn risks into opportunities, support businesses to quickly catch up with the development trend of global businesses, improve competitiveness to be resilient domestically and reach out to the world, VBCSD will focus its resources on implementation of 2 orientations: Promoting the implementation of the circular economy model in Việt Nam and developing a business community with a sustainable corporate governance foundation. Those are the "shortcuts" that Vietnamese businesses can "leapfrog".

    The reality of the Vietnamese business community's operations in the context of the complicated developments of the COVID-19 pandemic also shows that businesses that develop their own governance model towards sustainable development will be more resilient and stronger, there are even businesses that not only stand firm but also find opportunities to break through and overcome. CSI has not been "framed" after six years of voting and the change will continue as the vision of "Leave no one behind" will also bring other important changes to the strategic thinking of the business community.

Nguyễn Thị Quỳnh Nga

Office for Business Sustainable Development

(Source: Vietnam Environment Administration Magazine, English Edition III - 2021)

 

 

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