Sustainability could be competitive advantage for Vietnamese enterprises
The majority of Vietnamese enterprises have not set a clear vision and strategy towards sustainability, not to mention setting aside financial means to fulfill their corporate social responsibilities, said an expert.
Sustainability can be leveraged as a competitive advantage for Vietnamese enterprises and pave the way for new business models, according to Bjorn Savlid, head of Commercial Section at Business Sweden.
| Overview of the forum. Source: Nguyen Tung. |
“Some say sustainability is a cost. On the contrary, we say it drives profits,” said Savlid at a conference discussing corporate social responsibility in Vietnam on December 11.
Savlid cited a study conducted by Harvard Business School in 2015 which showed that high-sustainability companies outperform low-sustainability companies, both in stock market value as well as accounting performance.
Between 1992 and 2014, the high-sustainability companies performed almost twice as well on the stock market as the low-sustainability companies did, added Savlid.
When Oxford University reviewed 190 of the highest quality academic studies conducted on the relationship between sustainability and performance they found that 88% indicated that the operational performance was improved by robust Environmental, Social and Governance practices. Growing revenue streams along positive forces in society is possible and provides a much more reliable and attractive business model for investors and consumers.
“The key to success is to focus on the sustainability factors which matters for your company and your business model,” he added.
Pham Viet Dung, editor-in-chief of Vietnam’s Entrepreneur Magazine, said sustainability is the right direction for Vietnamese companies, especially as the country is considered by the World Bank as one of the most vulnerable countries to climate change.
Vietnam’s further push for global economic integration and stronger commitments in next-generation free trade agreements, including the Comprehensive Progressive Trans – Pacific Partnership (CPTPP) and the EU – Vietnam Free Trade Agreement (EVFTA), is putting huge pressure on the country for pursuing the path of sustainable development, Dung continued.
| SME 2018 policy index scores for Vietnam. Source: OECD/ERIA (2018). |
“However, the majority of enterprises have not set a clear vision and strategy towards sustainability, not to mention setting aside financial means to fulfill their corporate social responsibilities” Dung said.
Head of the Macroeconomic Policy Department under the Central Institute of Economic Management Nguyen Anh Duong said the government remains steadfast on comprehensive reform and promoting sustainable development among the business community.
“In addition to competitive pricing, Vietnamese enterprises must understand different aspects of sustainable development, such as environment, labor or the market.”
Secretary-General of the Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Quang Vinh mentioned circular economy, which is now pursued worldwide to create a zero-waste economy, as a viable option for Vietnam.
Circular models target a more effective and optimal uses of natural resources, materials, products, semi-products and value they created, aiming to reduce the cost of loss and waste for the economy as well as protect our environment, Vinh stated, saying the preeminence of circular economy will create a more regular and sustainable development for nations than traditional linear models.
“It is time for us to act rather than talk. Vietnamese enterprises have to act more to fulfill sustainable development goals by 2030, while enterprises must play an essential role for a prosperous and sustainable Vietnam,” Vinh added.
