Listed Firms Hold Advantage in Race to Sustainability

“Later this year, the Vietnam Business Council for Sustainable Development (VBCSD) under the Vietnam Chamber of Commerce and Industry (VCCI) will announce the rankings of sustainable companies in Vietnam for the first time. Listed companies will have a lot of advantages in the race to be final winners of sustainable development awards,” said Mr Nguyen Quang Vinh, VCCI Deputy Secretary General and VBCSD Secretary General, in an interview with Vietnam Business Forum. Huong Giang reports.

Which tools and criteria will VBCSD use rate candidate companies of sustainable development?

In July 2014, VBCSD established an expert group responsible for developing a corporate sustainability index (CSI), attended by top-notched experts from governmental agencies, domestic and international non-governmental organisations, and business representatives. The group has worked hard to complete this index based on common practices and international standards.

At a meeting with VBCSD at the end of 2015, Deputy Prime Minister Vu Duc Dam, Chairman of the National Council for Sustainable Development and Competitiveness Improvement, directed VCCI and VBCSD to expeditiously complete the CSI and coordinate with relevant ministries, branches and localities to rate and honour companies of sustainable development in Vietnam from 2016. This is expected to add another stepping stone for businesses nationwide to head for sustainable development.

Following this guide, VBCSD has deployed many actions and tested CSI in 20 big companies engaged in a variety of industries. Fact findings will be used to standardise CSI. To date, CSI is ready to rate companies and VBCSD will use this index to score, name and honour companies of sustainable development for the first time by the end of this year.

Is CSI accurate and reliable enough when it is used to rate companies of different scales and industries?

It is true that the scale, industry nature and operating field of companies are varied and different but they all share three key points: Economic indicators (revenue, profit), social indicators (employee policy, community impact) and environmental indicators (the environment inside and outside the company).

These three factors are used to assess corporate sustainability. Therefore, based on three scoring factors, CSI ensures accurate results of measuring corporate sustainability, even in companies that seem unrelated to environmental factors like service companies.

For example, banks’ operations do not directly relate to environmental factors but their active funding for environmental protection projects is indirectly contributing to environmental protection, which brings sustainable benefits to the community.

CSI is applied independently, objectively and placed under no pressure or influence. Thus, the outcome is reliable and helps winning companies to add values to their brands and reputations.

You have said that listed companies have a lot of advantages in the race to the winner short-list of companies of sustainable development. What are these advantages?

As soon as CSI is applied to rank corporate sustainability in Vietnam in 2016, VBCSD will coordinate closely and effectively with ministries, departments and businesses, including the State Securities Committee of Vietnam (SSC), the Hanoi Stock Exchange (HNX) and the Ho Chi Minh City Stock Exchange (HOSE). It is undeniable that sustainable development of listed companies is concerned by companies themselves, authorities and investors.

In particular, foreign investors are increasingly taking sustainability factors of a company as an important criterion for making investment decisions. This not only aims to minimise risk exposure to their capital but also brings sustainable benefits to them and indirectly enhance the attention of target companies to sustainable development, thus bringing long-term benefits for companies themselves, shareholders and communities.

From this motivating factor together with their self-awareness of sustainable development, listed companies are pioneering in information transparency and initially applying international sustainable development standards to their production and business activities.

These are the advantages of listed companies in the race to the winning list of companies of sustainable development to be announced by VBCSD/VCCI later this year.

Backed by the government for sustainable development, VBCSD expects to create a strong ripple effect on the business community and the economy to a greater extent. Thus, it generates sustainable value not only for businesses and shareholders but also for the community and the economy.

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At the United Nations Sustainable Development Summit 2015, 193 UN members unanimously agreed on 169 targets of 17 Sustainable Development Goals (SDGs). This is the most comprehensive set of global criteria for the time being because sustainable development is ultimately a powerful factor that embraces all fields of politics, economy and society. The summit called the business community to apply innovative business solutions to address sustainable development challenges.

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