Great Opportunities for Businesses Embracing Green Growth Objectives

With respect to the green future, could you elaborate on how Vietnamese businesses are adapting to this paradigm shift? Furthermore, what strategies does VCCI have in place to assist and guide companies toward green production and sustainable business practices?

The potential for companies engaging in sustainable practices is substantial. As an illustration, the transition to a circular economy, aligned with environmental principles, is projected to generate global market opportunities of approximately US$4.5 trillion from 2015 to 2030, according to estimates by Accenture Strategy.

Within Vietnam, numerous enterprises are proactively aligning themselves with this progressive trend. The PAN Group, an exemplary agribusiness, annually realizes a substantial income of VND15 billion through collaboration to process 7,500 tons of shrimp heads and shells into animal feeds. Concurrently, domestic companies like Faslink, a fashion input supplier, have diversified their offerings with fabrics derived from unconventional sources such as coffee grounds, lotus fibers, mint fibers, and seashells, resulting in successful market penetration. Sokfarm, leveraging coconut areas affected by salinity in Tra Vinh, demonstrates innovation by processing nectar into beverages and soy sauces, achieving a 3-5 times revenue increase from these previously underutilized coconut trees.

Looking ahead, the Vietnam Chamber of Commerce and Industry (VCCI), spearheaded by the Vietnam Business Council for Sustainable Development (VBCSD), is committed to advancing responsible business practices. This commitment entails fostering awareness within the business community through the establishment of a sustainable development press network, organizing prominent dialogues like the Vietnam Corporate Sustainability Forum (VCSF), and collaborating closely with relevant agencies and partners to advocate policies conducive to sustainable development and circular economy initiatives aligned with the Net Zero objectives in Vietnam. Furthermore, VCCI aims to incentivize the preparation and dissemination of sustainability reports and Environmental, Social, and Governance (ESG) practices, as well as fortifying membership and partnership networks with both domestic and international development organizations, thereby facilitating the exchange of best practices through dedicated working groups.

As sustainable development trends gain momentum and more award programs for green and sustainable businesses are being organized, could you highlight the unique aspects of VCCI’s Program on Benchmarking and Announcing Sustainable Businesses (CSI) compared to similar programs?

In 2023, the CSI Program marks its eighth consecutive year, initiated by VCCI under governmental guidance and in collaboration with the Ministry of Labor, Invalids and Social Affairs, the Ministry of Natural Resources and Environment, and the Vietnam General Confederation of Labor. Notably, the Central Economic Commission's participation in the Program Steering Committee adds a significant layer of credibility, setting the CSI Program apart from other similar initiatives.

The cornerstone for evaluating corporate sustainability in this program is the meticulously crafted Corporate Sustainability Index (CSI), developed by VCCI in conjunction with leading industry experts since 2014. Pioneering in Vietnam, this index serves as a valuable tool for businesses aspiring to adopt sustainable corporate governance.

It is crucial to underscore that the CSI Program extends beyond recognizing outstanding sustainable enterprises in Vietnam. Rather, it serves as a catalyst for encouraging businesses to embrace sustainable practices, fostering accountability, and specifically promoting the adoption of the CSI Index.

Companies excelling in sustainable corporate governance and accountability, coupled with the preparation and dissemination of reports, can substantially enhance their competitiveness. Such efforts attract more investment, solidify their standing with customers, regulators and stakeholders, and enable deeper integration into the global value chain - a distinctive advantage.

The dynamic nature of the CSI Index, subject to annual updates and adjustments, provides businesses with a holistic perspective on factors requiring attention in formulating sustainable development strategies. This eliminates the need to expend considerable time and resources gathering information from diverse sources.

Noteworthy entities such as PNJ, SASCO, Nestlé, The PAN Group, Bao Viet Holdings, Traphaco, HEINEKEN Vietnam and Vinamilk serve as exemplars. These companies have successfully applied the CSI Index over multiple years, attesting to its recognition and high regard within the business community.

The CSI Program, characterized by prestige, transparency, and meticulous implementation under the auspices of VCCI and relevant ministries, distinguishes itself through an entirely online application process. An independent jury council assesses candidates through software, seeks consultations on legal compliance, and presents outcomes to the Steering Committee for meticulous deliberation, voting, and approval of the list of sustainable businesses recognized at the annual award ceremony - marking a distinctive feature of the CSI Program.

Delegates at the Vietnam Corporate Sustainability Forum 2023

The Program has been in operation for seven years now. Could you provide some insights into the influence it has had on the business community during this period?

As previously highlighted, the CSI Program transcends mere business evaluation and commendation; its primary objective is to instigate a paradigm shift within the business community - encouraging a departure from profit-centric ideologies to the adoption of a responsible business mindset. In navigating the fiercely competitive contemporary landscape, companies are compelled to embrace systematic, scientific, and transparent corporate management strategies to not only retain customers but also attract discerning investors.

Over the past years, our implementation of the CSI Program has involved an array of communication, awareness-raising, training and coaching initiatives for businesses. These endeavors have proven instrumental in reshaping their business mindset and fortifying their ability to embrace corporate governance - a domain traditionally perceived as a significant weakness among domestic companies.

With seven CSI editions behind us, we have observed an increasing participation of Vietnamese companies in the program. Notably, in 2022, the distribution of Top 10 sustainable businesses in Vietnam revealed that 75% were Vietnamese, while the remaining 25% were foreign entities. In the broader context of the Top 100, the proportions were 66% Vietnamese and 34% foreign, underscoring a robust and progressive inclination among Vietnamese companies toward sustainable business practices.

A study conducted by VBCSD-VCCI in 2019 to assess the sustainable development progress of businesses utilizing the CSI corroborated the positive impact of participation. The findings illustrated advancements in various sustainability aspects, including corporate governance, information transparency, labor practices, social security, workplace democracy, community engagement, environmental protection and climate change response, among participants in comparison to non-participants.

Importantly, amid the recent challenges posed by the COVID-19 pandemic, companies adopting sustainable development strategies, particularly those leveraging the CSI Index, demonstrated greater resilience than the general average. This resilience translated into a more robust recovery. Such encouraging outcomes serve as a testament to the value of sustainable development - a challenging path, undoubtedly, but one that yields significant and enduring rewards for those who persist in their efforts.

Thank you very much!