Business governance plays a major developmental role

How do extreme climate events like the recent ones affect Vietnam’s sustainable development goals?

The northern region of Vietnam has been going through stormy days, with Typhoon Yagi hitting several provinces and cities, causing heavy damage to infrastructure and affecting many families. Yagi is the strongest super typhoon in the East Sea in the past 30 years, a rare phenomenon that serves as a stark reminder of the increased frequency and intensity of storms as a result of oceans heating up due to climate change.

Nguyen Quang Vinh, vice chairman of the Vietnam Chamber of Commerce and Industry (VCCI) and chairman of the Vietnam Business Council for Sustainable Development

It is yet another example of how global warming and climate change have caused, are causing, and will continue to cause increasingly extreme weather events that threaten the survival of humanity. Never has it been more critical to address the urgent global goal of slowing down the warming of our planet. In this context, sustainable development has also become a necessity and a strategic requirement for businesses in Vietnam and around the world.

Achieving the goal of halving greenhouse gas (GHG) emissions by 2030 and reaching net-zero by 2050 is not just a target – it is a mandatory step for countries globally. This is an urgent task, and building trust as well as pushing for genuine action is vital to reaching that goal.

Vietnam, as a responsible nation, has made a strong commitment and is proactively working towards reducing its GHG emissions, which are the main contributors to global warming. The Party and state have placed a priority on building a sustainable development model.

This involves two key roadmaps. First is adapting to climate change and building resilience against its impacts, and second is mitigating climate change by gradually decarbonising the economy, reducing emissions, and steering the country towards reducing reliance on carbon-intensive energy sources.

What role do enterprises play in achieving these goals?

Businesses play a crucial role in building a sustainable future. Conversely, by embracing sustainability, businesses can ensure they meet necessary regulations, enhance their brand reputation, and secure long-term growth.

The practice of building strategies, implementing, and evaluating progress according to the environmental, social, and governance (ESG) framework has garnered significant attention and is being actively adopted across industries.

From a business standpoint, when we discuss net-zero, many companies tend to focus solely on environmental factors. They often consider production, technology upgrades, and machinery improvements to reduce emissions and energy consumption as the primary measures. However, sustainability requires much more than environmental considerations–it also includes strong corporate governance and social factors, such as human capital.

Corporate governance is fundamental to the success of a business’s sustainability campaign. The commitment and active participation of senior leaders, from strategy development to implementation, are essential for sustainable growth. Additionally, businesses must place people at the heart of their strategies. Putting human capital at the centre is something every company that wants to sustain long-term success must keep in mind.

What is the VCCI doing to support businesses?

We are committed to raising awareness and encouraging businesses to shift their mindset towards sustainable business practices. We emphasise the critical role that senior executives and boards of directors play in leading ESG-based governance.

The development of human capital is also a key pillar in any business’s sustainable development strategy, which in turn supports the broader goal of net-zero. We want businesses to take bolder actions by sharing green transformation initiatives and case studies of companies from various sectors.

For years, the VCCI has worked closely with many ministries and sectors, creating platforms for businesses to engage in dialogue with relevant agencies to overcome challenges. We have also shared sustainable business models that companies can learn from, helping them identify the most suitable frameworks to implement.

We have developed several key indicators to promote sustainable transformation, encouraging different stakeholders to take action. For example, the Provincial Green Index motivates provinces and cities to pursue economic growth with environmental protection. Meanwhile, the Corporate Sustainability Index encourages the business community to integrate sustainability into their corporate governance models. This helps them become more competitive while transitioning to responsible business practices.

Currently, through the Vietnam Business Council for Sustainable Development, the VCCI is also collaborating with IDH Vietnam to promote sustainable industrial zones. This includes creating and implementing the Sustainable Industrial Park Index, which guides businesses in transforming such areas to meet sustainability standards.

However, no matter how many efforts the VCCI and other organisations make, we cannot achieve these goals without the active involvement of businesses themselves. Companies must make strong commitments to sustainable development. Not only in terms of financial resources, but businesses also have the capacity to drive positive change in consumer behaviour, create sustainable livelihoods for communities, preserve biodiversity, and safeguard environmental resources.

By adopting nature-based business models, enterprises can make an enormous difference and support the sustainable transformation of other companies within their value chain.

The path to sustainable development and net-zero emissions is not a task for one group or organisation alone. It requires the collective effort of businesses, government bodies, and society as a whole. Vietnam has set a clear path towards a greener future, and with strong commitments from all stakeholders, we can successfully transition to a sustainable, low-carbon economy.