Green choices offer sustainable business development

illustration photo source Dantri.vn

As of January this year, the Russian Federation has halted the import of some kinds of seafood from Vietnam, including tra fish, due to a quality issue. Ethoxyquin residues found in Vietnamese shrimp exported to Japan resulted in the same consequences. Most recently, with the adoption of the Farm Bill 2014, the US will be putting a closer eye on the quality of Vietnam’s aquaculture.

As a result, the Vietnam Association of Seafood Producers and Exporters (VASEP) has warned its members that firms cannot export products to these markets unless their production chain from aquaculture and processing to packaging is compatible with the requirements of these countries.

In the meantime, the Japanese market has also applied regulations on antibiotics and chemicals used on exported seafood that do not always match international practice. The EU market similarly has stringent quality standards.

For local businesses operating in wood furniture manufacturing, many customers in high-value markets such as the US and Europe are paying closer heed to timber origin and the demand for tropical wood with forest stewardship certification in these markets has far outstripped supply. these customers are willing to pay more for certified products. Currently timber products with this certificate are fetching 30 per cent more than those without.

These examples illustrate that businesses face losing valuable export opportunities to these major markets if they cannot fully satisfy their environmental standards. Moreover, the domestic market has a fast growing appetite for green products, particularly among the rising middle class.

United Nations research shows that firms might lose a third of their profits if they were responsible for repairing and mitigating the damage they cause to the environment. On the other hand, if they were responsible traders, they would foresee the risk as a unique and major business opportunity that could become a competitive advantage for their business.

A representative of a foreign invested enterprises with a raft of initiatives for sustainable development and environmental caring in Vietnam said he expected more improvment in the amended LEP to inspire more firms to go green and create greater awareness of the environment.

Sharing this view, chairwoman at Ho Chi Minh City-based pharmaceutical firm Traphaco Vu Thi Thuan said green business was not easy, but firms should adopt it to increase efficiency and create sustainability.

Director of the Office for Business Sustainable Development (SD4B) under the Vietnam Chamber of Commerce and Industry Nguyen Quang Vinh said Vietnam was hard hit by the effects of climate change and businesses needed to scale up competitiveness both at home and abroad to achieve better results. Notably, their brand value would be significantly bolstered in both domestic and foreign markets if they satisfied environmental standards.

“If they are late comers to green development, local firms may lose competitiveness in overcoming trade barriers in foreign markets,” he said.