The post Covid-19 pandemic world will be one restructuring toward sustainable values, said Vu Tien Loc, president of the Vietnam Chamber of Commerce and Industry (VCCI). 

Why is sustainability important in business? What benefits does a business get from sustainable development?

Never in the history of mankind have we seen the world change as much and quickly as it is now. Society is constantly changing, requiring every government, every economy, and every business to keep innovating to catch up with the pace of evolution.

Given the current context of intensive integration and constant competition, it must create its own advantages and grow its business capabilities. It will be successful when it builds a business model that delivers lasting values to the community, adopts an innovative business vision and strategy, and is operated by devoted employees who are placed in the right position to bring their competences into full play.

Vu Tien Loc, president of the Vietnam Chamber of Commerce and Industry (VCCI).

After being recognized as sustainably developed, the business will have a higher reputation, affirm its brand value and open up new business opportunities due to increased trust from partners, investors and shareholders. It will find it easier to attract human resources, improve competitiveness and develop the green economy.

In fact, sustainable development helps business efficiently tap natural resources, use energy reasonably and move toward clean and renewable energy. This helps it optimize costs, limit systemic factors of environmental degradation and many social issues that affect operations.

How has VCCI supported enterprises to adopt sustainable corporate governance integration?

Raising awareness among the business community about corporate governance and helping SMEs adopt good governance and models are VCCI's goal.

Vietnam Business Council for Sustainable Development (VBCSD) concretized its efforts to promote sustainable corporate governance by developing Corporate Sustainability Index (CSI).

CSI is a superior corporate governance tool that sets essential indicators in social, economic and environmental fields that any business needs to grasp and implement. With more than 90 percent of Vietnamese companies being small and medium in size and falling short of resources, CSI is a powerful "right hand man" for local businesses to figure out their strong and weak points.

In the fifth year of deployment, CSI has been utilized by many companies. Many domestic and FDI firms have achieved very good results in corporate governance as a result.

In addition, VCCI has cooperated with Deloitte Vietnam to compile a handbook for business response, recovery and development during and after a crisis. The handbook can help them access advanced and effective governance principles and methods to proactively fend off, endure, and turn risks into opportunities, not only regarding Covid-19, but also other challenges in the future, for sustainable development.

What are obstacles for Vietnamese enterprises moving toward sustainable development?

Sustainable development is not an easy way to go. It requires persistence and enormous effort from the leadership to every staff member. For the Vietnamese business community, where more than 90 percent are SMEs, challenges are numerous.

Besides insufficient finances, insufficient human resources and a weak ability to access and apply technology and innovations, the legal environment still cannot provide favorable conditions for them to access preferential credit sources or adopt new business models toward sustainable development.

In addition, awareness of sustainability reporting is also a matter of concern. Nondisclosure or limited disclosure of nonfinancial information as performance indicators may reduce their ability to access capital. Moreover, if they lack accountability for sustainable development issues, they would not be able to maximize competitive advantages and face the risk of losing customers and stakeholder trust.

What business can do for sustainable development?

They need to assess the governance gap and establish a sustainable development integration strategy, consider investing in resources to improve governance capacity, and gradually approach international standards and practices. They need to focus on data quality, process and control to create a meaningful sustainability report for stakeholders. At the same time, they need to keep updated on new trends and regulations to ensure effective communication with stakeholders.

They can improve their reporting by clearly announcing their choice of Global Reporting Initiative (GRI) Standards and management methods for selected material topics. The reports may have targets for sustainable development, a specific environment, medium or long term, as well as analysis of sustainable development impacts on markets and customers.

Notably, businesses need to increase informational comparability by making targets and comparing them with previous performance instead of only presenting data for the current year as some companies often do. Furthermore, it is advisable to consider selective key data and have direct comparison with set targets along with local or regional industry regulations.