Vietnamese version published in Forbes Vietnam, July 2021 –
Interview with Christina Ameln, Sustainability Strategist & Advisor – Purple IVY | AVPN | Sustainable Vietnam by Forbes Reporter Ms. Linh Chi.
How do you see CSR activities in Vietnamese companies today?
When I first arrived, my impressions of the state of CSR in Vietnam was at its beginning. CSR was ad-hoc and focused on charity giving. And those with supply chains focused solely on checking off lists of requirements that would prove they ‘passed the test. CSR is now further along. Over the years, the ‘CSR Events’ mainly attended by not-for-profits, international organizations and students now include more engaged corporate representatives.
Vietnam has been full throttle on its economic development with an expected growth of 7.6% even this year unlike other countries in the region. But if you look beyond GDP and incorporate social and environmental, Vietnam is also one of the most vulnerable countries to climate change.
In the last year, sustainable development has also become a daily subject of conversation. COVID-19 has catalyzed this further, demonstrating connections among sectors, countries and people.
More corporates in Vietnam see the benefits and the risks of proactively addressing climate, environmental and social issues.
Another big driver of this move toward CSR is investors. Investors are getting louder on ESG. The position of investors is clear: they are demanding to know what corporates are doing on Environment, Social and Governance. They want to companies to be more prepared – not only for future financial shake-ups but also for environmental and social ones. Investors want to bet on companies that are most likely to survive.
Those engaging more on CSR are still the big companies and MNCs. This is due in part to their size and reach, as well as to the demands of their stakeholders. Nevertheless, a growing segment that are driving the agenda are start-ups and SMEs that focus on purpose-driven, sustainable products and impact
I am however still missing a core business process in CSR.
What are the biggest barrier for companies when doing CSR activities in Vietnam?
Definition
In my work at sustainability consultancy Purple IVY, CSR is defined under the three pillars of sustainability – environment, social and governance. This approach is also supported by many corporates outside of Vietnam; they are distancing themselves from CSR in favour of a more all-encompassing concept integrated with their business.
Leadership & Sustainability Goals
Sustainability starts with a leadership mindset. And effective leadership at all levels is important and even more so, leadership from the top. Without leadership it is hard to ensure integration of sustainability in every part of the value chain. It sets the tone so sustainability goals are business goals.
Value Chain Integration
For MNCs, the challenge is often integrating sustainability all the way from headquarters to national affiliates, e.g. Vietnam. This can be due to rigid headquarter approaches that do not fit local markets, regulations, resources and know-how.
Cost Perception
For local companies, there is the misconception that it will be costly. I see quite the opposite. Focusing on efficiencies can generate significant cost savings, strengthen market positions, attract the right talent, long-term investors and lessen the impact of a crisis. Failure to adapt will be costlier in the future. Instead of seeing sustainability as a cost or a PR activity, companies should see it as an investment.
What the short- and long-term solutions for companies to work on sustainable development?
Each of these challenges is linked to opportunity. Vietnam has a key opportunity to leapfrog towards a greater sustainability from lessons learned.
How?
By integrating sustainability into business:
- Think and plan
- Identify what is relevant and unique to your company – look internal and external impacts
- Prioritize what is most applicable. Do get knowledgeable experts to help you
- Do work with your stakeholders – collaborate with other companies, not-for-profits, government, etc. There is much to learn from each other and opportunities to reinforce each other’s work.
- Map and measure your impacts along your value chain. As the saying goes – “What gets measured, gets managed”.
- Define and align your goals, targets and integrate into your business (do not just list activities but define your North Star)
- Engage, collaborate and motivate
These steps are no longer a good-to-have but also a must-have as more international markets implement regulations on sustainability.
For example, the European Green Deal is an intergovernmental institution driving a transition to reach climate neutrality by 2050 and support businesses to be world leaders in green products and technology. Vietnamese companies that plan to compete or collaborate with businesses in the EU will have no choice but to engage on these topics as well.
More than 90% of Vietnamese enterprises are SMEs, how should they approach CSR?
There are many opportunities for SMEs to stand out with a stronger brand, purpose, values, resilient working process, reputation and impact.
For example, AVPN, a network of social funders that moves more capital to social investment, has identified Vietnam as one of the most dynamic impact investing hubs in Southeast Asia.
Impact investing looks at companies that create positive and sustainable impact beyond just traditional financial returns. Sustainability is not only possible for big business. If SMEs want to grow and prosper, they need to invest in this and themselves too.
Let me conclude by reflecting forward.
I have seen much progress in Vietnam over the years. I am hoping to see more work on sustainability integration. I am excited to see this tipping point in the near future.
In recent years, the business community in Vietnam has been actively promoting CSR under various forms and names. However, both academic studies, as well as practices suggest that CSR is not fully comprehended and is quite often misunderstood as corporate giving, though philanthropic responsibility is only one of the four pillars of CSR (i.e. economic, legal, ethical, and philanthropic responsibilities).
CSR activities in Vietnam are therefore rather inconsistent depending on the size and scale of a company.
