Sustainable development—From commitments to action

Monday, 2016-12-12 18:40:46
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Vinamilk pursues sustainable development by combining business operations with hunger eradication and poverty alleviation. In this photo, Vinamilk staff sign contracts for the purchase of raw milk from local farmers in Cu Chi District, Ho Chi Minh City. (Photo: Dang Kim Phuong)
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NDO—2016 marks one year since Vietnam signed the Paris climate change agreement adopted at adopted at the 21st session of the Conference of Parties to the United Nations Framework Convention on Climate Change (COP 21) and ratified the 2030 Agenda for Sustainable Development (SD).

To put these commitments into force, it is necessary to create a shift in thinking leading to practical action by the business community. However, the fact that a majority of enterprises are lagging behind in the application of sustainable development poses the risk of missing out on a “passport” for domestic businesses during international integration.

Urgency in the era of SD

It is not coincidental that the 2030 Agenda for SD has emphasised the role of businesses in the successful attainment of the seventeen SD goals, besides the role of governments and international organisations, as this is considered one of the key factors playing a significant role in shaping and investing in innovation to meet the requirements of SD.

Though Vietnamese enterprises almost all note the necessity of pursuing SD goals, the thinking of “waiting to become strong enough to make investments” has pulled them down. Procrastination and an inaccurate understanding of SD by enterprises have led to impatience not only among experts but even among managers.

Deputy Prime Minister Vu Duc Dam, who is chairman of the National Council on Sustainable Development and Enhanced National Competitiveness, claimed that SD in Vietnam has been challenged from thought to practice. The deputy PM himself used to “quiz” people on the seventeen SD goals. Most of them knew about those goals, but not many realised there were 169 corresponding targets for SD indicators.

Similarly, one might speak competently about Vietnam’s competitiveness ranking compared to others in the region and the world, but very few, including officials from specialised ministries and agencies, can answer about the 114 specific criteria for assessing competitiveness.

“This indicates a concern that many people believe that SD is the responsibility of State ministries and agencies. However, at such State bodies, these criteria are not well understood and properly implemented,” Deputy PM Dam said.

State management agencies must be responsible for the current situation where enterprises are not fully aware of SD.

According to the Global Innovation Index for 2016 released by WIPO, Cornell University and INSEAD, surveying 128 nations in seven groups of indicators, including macroeconomic institutions, capital and investment markets and the business environment, Vietnam’s ministries and sectors still do not properly appreciate improvements.

According to the report, the criteria for green growth and new technologies have not been considered value added for domestic sectors and businesses. There is no motivation for enterprises to reform input factors, thus creating obstacles to Vietnam catching up with developed countries.

Rating businesses through a joint SD index

For the first time, Vietnam has organised an award ceremony classifying enterprises according to sustainable development criteria. (Credit: NDO)

When asked about the importance of SD for businesses, Malcolm Brinded, a member of Royal Dutch Shell PLC’s Board of Management said that businesses not concerned about SD would not survive for long, as SD was not one among many options, but rather the only way for each enterprise to develop.

Clearly, in a world that is increasingly becoming flatter with more intense competition, a business gaining a certificate proving that it meets the requirements of the Corporate Sustainability Index (CSI) would be a “passport” to demonstrate its competitive advantage over global rivals.

Tran Vu Hoai, deputy chairman of Unilever Vietnam, related that when engaged in the development model aimed at sustainability, brands developed under sustainable models by Unilever have recorded increasing growth year by year. The proportion of the consumption of local raw materials has also increased along with stable revenues.

Around 30% of Unilever’s sustainable brands saw faster growth, 28% of its energy has come from renewable sources, it has saved more than EUR600 million since 2008 and it has become one of the best workplaces in 34 countries, all during its pursuit of the SD goals over the past few years.

It is a fact that foreign-funded enterprises seem to be better prepared to implement SD plans than Vietnamese ones. That helps them ensure profitability while still being very “friendly” with consumers. So what should be done to make the remaining majority of businesses indifferent to this opportunity no longer?

According to Deputy PM Dam, to solve the problem of investment for SD, on the one hand the Government must improve the business environment and on the other hand it should also urge businesses to take action.

By now, alongside their own interests, enterprises can no longer be indifferent to the seventeen SD goals and 169 SD indicators throughout the world, from which they should find relevant and feasible targets and criteria to apply. That is a practical contribution to the nation’s SD.

There is no time to waste, only time to act in a more substantive way, starting from the creation of a policy framework to promote the implementation of SD in the business community.

Obviously, SD requires association and coordination as well as multidisciplinary creativity and endeavours. Therefore, the targets require the joint efforts of both the Government and the whole society.

Kristan Shoultz, Acting UN Resident Coordinator in Vietnam, said that promoting the relationship between the private sector and the State under the public - private partnership model plays a key role in addressing environmental, social and business ethical challenges.

This is a platform to promote a comprehensive and effective approach to development, as to get rich by doing good things is an emerging trend among enterprises looking for new markets in the developing countries, Kristan shared.

One of important issues for Vietnam's SD objectives is the determination from the government through strong moves towards creating a large and more convenient development space for businesses to effectively use resources, basing on the spirit that "the State does not carry out too many things that businesses and the society could do better," Deputy PM Dam said.

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