Listed company awards highlight greener progress

The Vietnam Listed Companies Awards 2021 was hosted online to honour enterprises

Le Hai Tra, CEO of the Ho Chi Minh City Stock Exchange (HSX) said, “At COP26, the government showed a strong commitment to the global initiative on combating climate change and was highly appreciated by the international community. To maintain sustainable growth and development, Vietnam needs to pay more attention specifically to topics likes environmental, social, and governance (ESG) principles – which is of interest to the international investment community.”

Tran Anh Dao, deputy CEO of the HSX and chairwoman of the selection panel of the Vietnam Listed Companies Awards 2021, said that through the selection, the committee wished to send a message to the business community on responding to climate change.

“Those activities should start from the minor ones as shown in the annual reports to create tremendous achievements and help fight climate change,” Dao said.

“When international economic integration takes place more deeply and strongly, good governance towards sustainable development is an inevitable trend of businesses around the world, including financial institutions and organised investors,” said Dao.

According to Tran Van Dung, chairman of the State Securities Commission of Vietnam, in 2020 and 2021, Vietnam’s stock market had overcome many difficulties and achieved impressive growth.

“The total market capitalisation reached more than $330 billion, up 44.7 per cent compared to the end of 2020, equivalent to more than 121 per cent of GDP,” Dung cited.

Vietnam’s stock market has risen to the top of the ASEAN region regarding index growth and ranked second in terms of trading value. The average trading value of a session was reported at more than $1 billion and there have been significant sessions that reached nearly $2 billion in 2021, Dung added.

Many listed companies have also reported positive business results with growth in both revenues and profits. The 500 companies of the VNAllshare-index that were evaluated showcased that the quality of their annual report has improved significantly compared to 2020, in both content and performance.

“The level of compliance with regulations on corporate governance has also improved significantly, and the number of companies that made sustainability reports is also the highest in recent years. These are successful highlights of this year’s selection and also good news for Vietnam’s stock market and all domestic and foreign investors,” Dung added.

This year, for the first time, the preliminary selection was carried out by a group of independent experts from the Centre for Research and Training from the Ho Chi Minh City University of Technology. The preliminary results were then verified once more by the two stock exchanges, before being transferred to the top four auditing firms involved for review, to ensure accuracy and objectiveness in the selection process.

The organisers also added the issue of greenhouse-gas emissions to the criteria for the annual reports as achievable bonus scores. This was to encourage listed companies to take the lead in implementing the commitments to respond to climate change, thereby spreading positive effects to the whole business community.

Among the most excellent companies were HD Bank, Vinamilk, NovaLand Group, and Vingroup. Vietnam National Reinsurance Corporation achieved Outstanding Progress in the Annual Report category.

Corporate governance was also a topic that many businesses and investors were interested in. A total of 90 companies were selected for the final round of the best corporate governance report content, classified by capitalised groups, with each group having 30 companies.

In the final round, the panel selected 14 companies, among them being Rong Viet Securities JSC, Tan Cang Logistics & Stevedoring, Traphaco, Vinamilk, Thanh Cong-Bien Hoa JSC, and Bao Viet Holdings. Vietnam National Petroleum Group won a prize for outstanding progress in its corporate governance work.

Last year was also the ninth that included votes for sustainable development reports with the support of an expert panel from the Association of Chartered Certified Accountants (ACCA).

According to those reports, many companies have shown a solid commitment to ensuring the health and safety of employees and the community, securing jobs and welfare for employees, and implementing programmes to connect the community and supporting the fight against the pandemic.

In this category, VVinamilk gained the first prize and Century Synthetic Fiber Corporation gained second, followed by VICOSTONE JSC, The PAN Group, Vietnam National Petroleum Group, and Everpia JSC.

Dominic Scriven - Chairman Dragon Capital It is essential for enterprises to devise a solution that will generate economic benefits while addressing current environmental issues. To do so, they need to define a governance model for climate change, develop a strategy for risk assessment, and establish action plans. From 2030 to 2050, the forecasted value at risk from climate change of Dragon Capital will amount to nearly $48 million annually. To minimise this loss, we apply the Task Force on Climate-related Financial Disclosures which aims to enhance and broaden reporting of climate-related financial information. This is a set of guidelines for businesses to evaluate the risks and opportunities presented by climate change. The three environmental, social, and governance (ESG) factors are changing rapidly in terms of content and composition. ESG standards are diversifying, making it more difficult for enterprises to comply. Hence, they need to identify priorities and work on resolving them.

Nguyen Phuong Chi - Strategic director Century Synthetic Fiber Corporation Since 2016, the company has started to measure carbon footprint related to the process of using diesel oil used for its forklifts as well as energy consumption. Over 20 years ago, the corporation built its workplace culture to promote innovation, energy saving, and environmental protection. Every month, the financial department will compare energy consumption with the standard and analyse the reasons. Relevant departments will also be involved to find solutions to minimise energy and fuel consumption in each quarter. We are working to standardise carbon footprint calculation in accordance with international standards. The company has yet to set up clear targets to reduce carbon footprint because this depends on the types of products in each production session. To enhance our sustainable development efforts, we have invested in energy-saving equipment and technology to reduce emissions.

Vu Chi Dung - Director general International Cooperation Department, SSC The provision on the disclosure of direct and indirect greenhouse gas emissions (GHG) of enterprises demonstrates the contribution of Vietnam to ASEAN’s initiative to combat climate change. This is a new quantitative point among other qualitative factors in a traditional ESG report. The establishment of the ASEAN Taxonomy for Sustainable Finance has a direct impact on Vietnam’s financial market. The taxonomy acts as the reference point for sustainable projects and activities in ASEAN, assisting issuers and investors in determining the sustainability effect of a project or economic activity. Company boards need to establish a plan compliant with legal requirements and realistic in its operations. Enterprises, state management agencies, and investors need to devote joint efforts in communicating and discussing issues to establish solutions that contribute to the sustainable development of the economy.

Nguyen Viet Thinh - President ACCA Vietnam Member Advisory Committee There has been a steady improvement in the quality of sustainable development reports over the years. About 70 out of 500 listed companies have updated information about GHG emissions in their reports. Meanwhile, 20 businesses have quantified emissions. After measuring their carbon footprint, businesses have to set targets to reduce emissions over the years. This is good practice for them to fully realise their sustainable development goals. By setting clear targets, businesses can come up with solutions to reduce GHG emissions. Half of businesses have already delivered analysis and described initiatives to minimise carbon footprint. With clear objectives, investors will feel more secure. However, no Vietnamese listed firms have set targets to lower carbon footprints in their reports. If there is no goal, businesses are just measuring their carbon footprint to keep up with market requirements.