As consumers tend to choose products by companies that show high responsibility for sustainable development, many companies in Vietnam are strengthening their competitiveness by applying the country’s corporate sustainability index.
|The CSI provides key insights into how a company can gear operations towards sustainability, Photo: Le Toan |
Nestlé Vietnam has been conducting sustainable development activities for years now through its solid co-operation with coffee farmers, partners, and consumers. The company has helped improve the quality of 20,000 hectares of aging coffee area, increasing coffee yield and the quality of coffee beans. Farmers’ income increased by 30-100 per cent thanks to Nestlé Vietnam’s techniques, particularly the intercropping model applied by 80 per cent of them. Moreover, all Nescafé products are made from 100 per cent high-quality Vietnamese coffee beans. The products are widely accepted by consumers in 25 countries worldwide.
“Every year, Nestlé purchases 20-25 per cent of Vietnam’s total coffee output for domestic consumption and exports,” said Le Thi Hoai Thuong, head of External Relations of Nestlé Vietnam, at last week’s workshop in Hanoi on businesses’ role in implementing sustainable development.
Pham Hoang Hai, chief secretary of the Vietnam Business Council for Sustainable Development (VBSD), told VIR that Nestlé Vietnam is among many businesses in Vietnam pursuing sustainable development initiatives, including the corporate sustainability index (CSI). “Many companies in Vietnam are using the CSI very well, such as HEINEKEN, Bao Viet Holdings, Traphaco, Vinamilk, and TBS Group. Their profiles prove their success in applying CSI to sustainability reporting,” Hai said.
The CSI was introduced by the Vietnam Chamber of Commerce and Industry a few years ago, to rank local businesses.
It also helps businesses manage risks and increases their ability to recognise opportunities and emerging development trends. It also supports the legislative process to create a favourable legal environment for businesses.
“The CSI is essential for businesses, especially in sight of the global trend that investors and consumers choose products and producers that have a clean track record and show high responsibility towards the society, the economy, and the environment,” Hai said, referring to a PwC survey which showed that 78 per cent of consumers said that they are more likely to purchase from those who signed up to the UN’s Sustainable Development Goals.
According to the VBSD, in 2015 and 2016, when the CSI was released, it was immediately applied on a massive scale by foreign firms, but gained little traction among Vietnamese companies. However, this year, the number of these Vietnamese companies has strongly increased because their awareness of the CSI has significantly improved.
“Current statistics show that the rate of Vietnamese and foreign businesses applying the CSI is 50:50. Not only big companies, but many small- and medium-sized ones have also began applying the CSI,” Hai said. “For example, Bao Viet Group has been using the CSI for two years, and this helped increase their brand value to billions of US dollars, while retaining the largest market share in the local insurance market.”
Under current regulations, companies which have been listed on the bourse will have to implement the CSI, and unlisted ones are also encouraged to follow suit. If companies want to apply the CSI, they should register at the VBSD which will appraise their profiles for eligibility.
“In the context of Industry 4.0, the value of enterprises has changed. Previously, visible values were higher than invisible ones. However, invisible values account for 83 per cent now, while visible value is only 17 per cent. This means that the CSI has contributed significantly to creating and developing enterprises’ invisible value, which is demonstrated by factors such as prestige and brand name,” Hai said.
By Thanh Dat