“Now the word sustainability has become trendy. It refers to the development of enterprises or, in a broader sense, of the economy, but how sustainable a business should be is one of the main issues researchers and experts are concerned about." According to Nguyen Quang Vinh, Director of the Office for Business Sustainable Development (SD4B), Vietnam Chamber of Commerce and Industry, as well as General Secretary of the Vietnam Business Council for Sustainable Development (VBCSD): "In the 21st century, the roles of enterprises have changed, an enterprise is evaluated by not only revenue and profit, but also other criteria that cannot be underestimated". Son Vu reports.
More than ever, businesses are under tremendous pressure due to a change in their roles. What do you think about this statement?
It is true that the role of the business is highlighted in many respects. The businesses are not only driving forces for economic development but also key actors who supportively solve core problems relating to climate change, energy savings, environmental protection and social responsibility. The role of businesses can be considered as a tripod, the three supports being economy, society and environment.
It could be a pressure to the businesses, but from my point of view, the pressure is necessary for them to develop. If they want to be stronger, they need to enhance competitiveness through investment in sustainable development. If not, businesses will be out of the playing field. It is not true that large businesses represent for their efficiency and sustainability. Four out of ten employees (37 percent) said that the implementation of social responsibility and environmental protection is extremely important, and three of ten employees (29 percent) said that the implementation of corporate social responsibility before consumer's decision should be required. The businesses not only focus on building good business administration, but also drive their businesses toward sustainability for long-term success.
Is this also the reason the SD4B, the Global Report for Initiatives (GRI), and the Global Compact Network of the United Nations consider the sustainability report a tool to measure sustainable development of the enterprises?
The Global Compact Network of the United Nations is the largest social responsibility of the work, with the participation of more than 7,500 businesses and corporations from over 100 countries. Currently, there are more than 4000 organizations from 60 countries that use the framework of the GRI as a tool to measure the health of the company and as a main promotion solution for businesses. The European Union is about to enact a law which forces companies with more than 500 employees to make the sustainable development report. In China, the state-owned enterprises are also required to make the sustainable development report. For the stock market of Singapore, Hong Kong, India, and South Africa, to be listed, companies are required to provide non-financial report. The sustainable development report is considered a trend of the 21st century. However, this measure still sounds new to companies, regulators, and policymakers of Vietnam.
What should we do to make sustainability reporting a tool that Vietnamese businesses could use effectively?
Vietnam is facing many challenges in sustainable development such as poverty, urbanization, financial crisis, food price volatility, energy, climate change, and shortage of natural resource, etc. In this context, sustainability reporting is one of the effective tools to help monitor and evaluate the implementation of the sustainable development strategies of the companies. Sustainability reporting will help companies become more transparent in the eyes of investors and other stakeholders in the society. The value companies create will be fully recognised on the level of capital in terms of economic capital, natural capital and social capital.
The Business Council for Sustainable Development in Vietnam will submit this proposal to the National Council for Sustainable Development and Competitiveness Enhancement and the government agencies as a mechanism to encourage companies to report on corporate social responsibility activities through the sustainable development reports.
In addition, the Office for Business Sustainable Development will coordinate with the Global Compact Network of the UN to guide the companies to implement this report.
Poverty reduction is an important part of sustainable development. Creating a venture with the poor is one of many strategies many companies are considering. From your point of view, what should businesses consider when doing business with the poor?
There are many successful models of cooperation between enterprises and farmers. Hung Cuong Tea Company in Ha Giang has succeeded in working with regional farmers to create a stable amount of quality materials through financial and technical assistance. The Vietnam Friesland Campina Company is also successful in providing seed and breeding techniques for dairy farmers. The company not only collects good quality milk, but also helps create jobs and provides sustainable livelihoods. The enterprises of agriculture and fisheries, transportation, oil and gas, energy and credit can apply business models for the poor to help create sustainable livelihoods for local people, contributing to social security and creating social progress in accordance with the Party's resolutions.
To be successful in this partnership, the enterprises need further attention to the value chain. Once farmers join the business partnership, they are protected from the risks and other pressures, which may push them into tough situations. The win-win business partnership will provide mutual benefits for both the farmers and businesses, creating higher profit and stronger cooperation, as well as contributing to a sustainable society.
What specific programmes will be implemented to support and promote enterprises and the poor?
One of VBCSD’s key tasks is to promote business models and the poor. Currently we are working with the Netherlands Development Organization (SNV) in the implementation of the Vietnam Business Challenge Fund (VBCF) to help enterprises and the poor access capital. The VBCF supports 49 percent of total capital at a maximum of US$800,000 for each business project with the poor, and businesses will contribute 51 percent of the counterpart funding.
This funding mechanism ensures that Vietnamese enterprises will make their commitments. After one year of implementation, we introduced VBCF to businesses nationwide. Now there are many companies who show interest in registering for the program. It is expected that 14 business models in the field of agriculture and energy will be selected for the final round. When the project is adopted, we expect that Vietnamese enterprises will replicate this model, not only for the benefits from the financial incentives, but also the values they could obtain when they make business partnership with the poor.
Source: Vietnam Business Forum
