An inclusive vision for sustainable business actions

What adjustments do businesses now need to make in their sustainable development strategies?

Nguyen Quang Vinh, general secretary cum deputy chairman of the Vietnam Business Council for Sustainable Development

In addition to overcoming difficulties to maintain operations in limited conditions to ensure pandemic prevention, the Vietnamese business community and entrepreneurs have also demonstrated a strong spirit to serve the community and society.

Sustainable development is no longer something businesses can pay lip service to – it will have to be part of their flesh and blood to improve their ability to cope and recover in all situations.

From the medium- to long-term, the business community needs to focus on three solutions. First, it is important for firms to craft development strategies and streamline corporate governance to promote sustainability. Firms should integrate sustainable growth into their corporate governance and risk management agenda. It would also be smart to establish sustainability reports, develop key performance indicators that are directly relevant to their sustainable development strategies, and participate in the Corporate Sustainability Index (CSI).

Second, for decades, businesses have been giving priority to optimising performance instead of building strong supply chains, which has left them vulnerable to global shocks. To overcome this weakness, businesses need to actively strengthen supply chains through diversification. Enterprises should also actively build scenarios to manage short-term supply risks, as well as flexible and lean production plans, and enhance supply management with technology to avoid being completely dependent on large suppliers.

Third, businesses need to stay up-to-date with the government’s long-term economic development policies so that they can build and adjust their strategies. Similarly, they need to keep up with general development trends in the world and build business models accordingly.

How effective are the CSI indicators in supporting businesses ensuring a swift recovery?

The UN’s Sustainable Development Goals signify a shared global effort with 17 goals and 169 specific targets. Vietnam already has a national action plan to integrate these, and goals specific to Vietnam, into documents and resolutions by the National Assembly and the government.

The country has achieved several of these goals 10 years ahead of schedule and achieved a relatively high rank in the region, only behind Thailand. However, there are many tough challenges to achieve the remaining goals. Despite the many advances, only a relatively few businesses embrace sustainable development. We currently have about 800,000 enterprises but only around 0.25 per cent are members of the Vietnam Business Council for Sustainable Development, and only about 12.5 per cent have access to information on sustainable development.

This year, the Vietnam Chamber of Commerce and Industry continued to coordinate with the Ministry of Labour, Invalids and Social Affairs, the Ministry of Natural Resources and Environment, and the Vietnam General Confederation of Labour to launch the sixth edition of the CSI Programme to honour responsible businesses in three aspects: economy, society, and the environment. CSI continues to be used as a gauge of sustainability in the business community.

The initiative is open to applications from businesses of all sizes and fields across the country, to score them on 119 indicators in four areas: sustainability performance, governance, the environment, and a labour-social index.

In 2021, we have decentralised CSI indicators to differentiate businesses by size. This helped us emphasise and convey the message that sustainable development is not only a consideration for big businesses but can be achieved by all. Sustainability is possible at all levels.

CSI is particularly useful for domestic companies, 95 per cent of which are small- and medium-sized. Instead of having to research sustainability on their own, the indicators offer businesses a good starting point for what they need to look at and can be used to draw up a roadmap for sustainable development that befits their capabilities and needs.

What have been the latest new features of this programme?

Two sub-category awards for gender equality in the workplace and children’s rights in business are among the new elements of the CSI Programme this year. These contents are of interest to the global business community and they illustrate the country’s vision of leaving no-one behind. Responsible businesses can help improve children’s lives and support sustainable development. Enshrining respect for children’s rights as part of a company’s sustainability programme would aid the development of stronger communities, which is a necessary component of a productive, inclusive, and stable corporate environment.

CSI is not a fixed goal. Changes will continue after six years of adaptation because the vision will bring other important changes in the strategic thinking of the business community.