Vietnam Business Council for Sustainable Development Needed for Economic Growth

With the strong progress of the Vietnam business community, which plays an important role in Vietnam’s socio-economic development strategy, and less attention of enterprises in environmental protection in recent years, businesses are considered key suppliers of solutions and contributions to the country’s sustainable development (SD).

 

To catch up with this trend, an initiative to establish the Vietnam Business Council for Sustainable Development (VBCSD) is being started by the International Union for Conservation of Nature (IUCN), Vietnam Chamber of Commerce and Industry (VCCI) and SNV Netherlands Development Organization. The World Business Council for Sustainable Development (WBCSD) has branches in over 60 countries and would like to expand that network to Vietnam.

 

The initiative aims to set up and maintain VBCSD with a large network of members and partners, to expand the inclusive business (IB) based on engaging low-income communities to the core business of enterprises, and to demonstrate the relevance and added value of VBCSD through pilot projects, training, outreach and networking.

 

Being a business-led, demand-driven initiative, VBCSD will be directed by 12 founding companies, including Holcim Vietnam, BP, Unilever, Son Ha Garment Co., Shell Vietnam, Dragon Clean Development, Hanoi Trade Corp., Vietnam Coal and Mineral Group, Nippon Vietnam, Ho Chi Minh Securities Co., Saigontourist, OSB, HiPT, Bayer Vietnam Ltd., and SGS Vietnam Ltd. Among 120 companies in a survey conducted by VCCI and IUCN, 92 companies are interested in joining VBCSD.

 

It is necessary to set up the council at the moment, especially when the business environment is increasingly competitive, the corporate responsibility toward the society and environment will help enterprises build up good images and create long-term benefits. The industries of furniture, cement, hydro-electricity, tourism and agricultural production much depend on natural resources and clean environment. SNV also proposes a concept “to engage low income segments into the value chain of large corporations as suppliers, distributors or consumers in a win-win situation to create economic benefits and reduce poverty.” 

 

According to Dr. Doan Duy Khuong, VCCI Vice President, carrying out corporate social responsibility (CSR) is a necessary and urgent task for business and civil communities and the Government. Enterprises, civil and social organizations, and the Government need to cooperate because Vietnam has limited resources in this issue and should learn much from international organizations. VBCSD is the best platform to establish the cooperation and increase the involvement of the private sector in the country’s SD, Mr Khuong noted.

 

VCCI and relevant partners are calling for more constructive ideas from local and international organizations to the VBCSD action plan which is expected to be submitted to the Government for approval in the second quarter this year. VBCSD expects to have more than 100 members by 2010.

 

 

Climate change will have social and economic impacts. A projected sea level rise of 1 meter by 2100 would affect 10 percent of Vietnam’s population and decrease GDP by 10 percent.

 

Government has programs that address these issues such as Agenda 21, National Target Programme on Climate Change, etc., but social accountability is needed from businesses to stabilize the macro-economy. CSR needs the cooperation of related stakeholders, so the VBCSD will be a supporting mechanism to develop SD solutions.

 

Development cannot be sustainable if significant sectors of society are left out. It is essential to make total economic sense to invest in ways to link businesses to low-income segments of society.

 

IB requires initial investment to develop new business models. WBCSD and SNV have worked on this in Latin America and demonstrated its feasibility. They have 70-80 IB models that have expanded markets for businesses. IB is a win-win for accessing a new market for businesses and increasing incomes for poor people.

 

VBCSD can share those success stories and develop similar models in Vietnam.

 

Meeting SD standards is of interest as international markets require it. Customers from the US, EU, and Japan appreciate responsible businesses and safe products. Toxic chemicals in textiles are forbidden for export to international markets, for example.

 

The garment sector wants to address waste treatment and pollution from garment factories but lack funds. The issue needs funding and support from the Government. The association has contributed to SD by developing projects in remote areas, employing poor workers, and female workers.

 

IUCN recognizes the increasing role of the business sector in environmental protection and SD. Accordingly, the establishment of VBCSD will meet business community demand.

 

Cement industry worldwide is responsible for 5 per cent of global CO₂ emissions so it is incumbent upon companies like Holcim to be part of the SD solution and bring a business perspective to the debate. Business can profit from a focus on environmental performance by building reputations as responsible partners in communities where they work.

 

SD and CSR must be a medium to long-term process that incurs some short-term costs, and companies must think where they want to be not in five years, but in 20 or 50 years.

 

Groups or subcommittees of the council will give us a way to take specific action on this broad topic. Groups could be a blend of experienced companies and NGOs who could work with less-experienced businesses to address their concerns. We need to change the mindset toward SD from a business cost to a business investment.

 

The council’s operation model is set up based on the models of BCSDs from China, Malaysia, Thailand and other countries, and needed to be subject to real situation in Vietnam. It is planned to elect one of founding members to be Secretariat member, VCCI just provides added values, support the imitative from businesses such as Greenship Building, Cement Initiative, Planning, Water Imitative, and others.

 

Donors are expected to provide seed money for the start-up stage. In the long-term, VBCSD will raise funds from member fees and activities funded in part by members.

 

Vietnam has seen the development progress for nearly 30 years, but domestic enterprises are only beginning to gain an understanding of SD. Vietnam can learn experience and best practices from BCSDs in other ASEAN countries. Every sector could have its own council, including councils at the local level, but they need to have linkages to national VBCSD.

VBCSD should help pre-calculate the costs of activities to help enterprises plan and develop appropriate approaches to SD.

 

VBCSD should meet business needs by focusing on the concerns of the different industries that comprise it. It needs a detailed agenda for groups of enterprises and for each sector to orient "green" business. VBCSD would benefit from international organizations by sharing their experience and views, like how Norwegian Embassy helps with green ship-building program.