Corporate social responsibility: From intention to action

Under the theme “Architects of a Better World", the UN Global Compact Leaders Summit 2013, held recently in New York, discussed the role of enterprises in cooperation with the Government and other partners to address global social challenges and sustainable development challenges.

Under the theme “Architects of a Better World", the UN Global Compact Leaders Summit 2013, held recently in New York, discussed the role of enterprises in cooperation with the Government and other partners to address global social challenges and sustainable development challenges.

Freshly returning from the summit, Nguyen Quang Vinh, Director of the Business Office for Sustainable Development under Vietnam Chamber of Commerce and Industry (VCCI), talked with the Vietnam Business Forum about this content.

Vinh said the summit, organised by the United Nations every three years and chaired by the UN Secretary General, was attended by many heads of the states. In particular, the summit attracts the participation of more than 1,200 CEOs of global leading corporations and businesses.

The approval of the Global Corporate Sustainability report 2013 is the highlight of this summit. The report focuses on assessing the sustainable development of enterprises and reviewing the policies and practices that apply to enterprises across various sectors, to put forward the concept of a comprehensive approach to corporate social responsibility (CSR) in four areas: human rights, labour, environment and anti-corruption drive.

* Could you tell us specifically about the highlights and the current trends of enterprises in the implementation of CSR that the Global Corporate Sustainability report 2013 mentioned?

Of the three times the summit was held by the UN, this is my second time to attend. The highlight of this meeting is the UN releasing a report on the implementation of CSR globally in 2013. The study is conducted comprehensively with the consultation of 2,000 companies from 113 countries with the focus on the following key issues:

First, companies are moving from good intentions to significant action, which means a move from a "good idea" to practical actions in the implementation of CSR.

Companies are making commitments, defining goals and setting policies at high rates, but still have much work to do to on the action steps: implementing, measuring and communicating. For example, while 65 percent of signatories are committing to sustainability at the CEO level, only 35 percent are training managers to integrate sustainability into strategy and operations.

Second, large companies still lead the way. Smaller companies face fundamental barriers to sustainability progress. They lack financial resources, knowledge and experience.

Third, supply chains are a roadblock to improved performance. While a majority of companies have established sustainability expectations for their suppliers, they are not tracking compliance or helping suppliers reach goals. While 83 percent of companies consider adherence to the Global Compact principles by suppliers, only 18 percent assist them with setting and reviewing goals, and just 9 percent take steps to verify remediation. And

Fourth, the companies, who have good visions, see more benefits from the implementation of CSR. This helps them to go beyond the boundaries of their businesses, as the implementation of CSR will help build up a better society and the businesses themselves could gain a lot of benefits from society.

According to the surveyed companies, the global sustainability challenges are sorted by priority from the top down, as follows: 1) education, 2) poverty reduction, 3) climate change, 4) growth/employment, 5) peace/security, 6) water and sanitation, 7) health, 8) anti-corruption, 9) energy, 10) food security, 11) inequality, 12) disaster prevention, and 13) urbanisation.

In addition, the report this year also indicates some urgent issues in the world today. The issues relate to education, climate, and growth. The report also highlights the role of government in directing the businesses and issuing the policy, legal framework and support for businesses to implement CSR.

* From your perspective, are Vietnamese businesses following the trend of world businesses in implementing CSR? Or rather, what, on the world map of CSR implementation, are Vietnamese businesses presenting?

In my opinion, basically the Vietnamese businesses are having proper awareness about the important roles of the implementation of the CSR. In particular, large companies are pioneers in regard to this issue. I could list some of typical companies such as FPT, Unilever, and Saigon Tourism. However, large companies have not deeply and comprehensively integrated CSR into their core business activities. While the world's small and medium enterprises are now facing difficulties in achieving the goals of the CSR, Vietnamese SMEs are facing even more difficulties because of unprofessional characteristics. Therefore, this requires a great effort of businesses, along with the support of government and ministries.

* For the past time, the Government of Vietnam, ministries and VCCI have kicked off many supporting activities through education and advocacy on the roles of CSR. However, does it seem that “the transition from the intention to specific action” of the companies on this issue is not making good progress?

It is true that awareness of CSR and CSR implementation of businesses have been enhanced drastically; most companies now understand the important role of this issue. However, for good performance in CSR implementation, businesses need to rely on their abilities and core businesses so that they are able to recognise what and how to perform in association with the business operation, as well as the outcomes of CSR activities and the improvement of business performance and competition. This is entirely consistent with the theory of Michael Porter and Mark Kramer, two professors from Harvard University, which mentions the creation of community and social values, as well as competitiveness enhancement among enterprises.

* Currently, companies are in the trend of restructuring. From your perspective, which CSR issues should businesses integrate into the restructuring process?

In my opinion, the implementation of CSR to any specific businesses, large or small, at any period, should not depend on whether restructuring happens or not. However, a company's restructuring will be an opportunity to integrate CSR issues into the overall strategy for a more effective implementation. If businesses see themselves as a "link" in the global value chain, the implementation of CSR should be imperatively integrated into the restructuring process, and this should be done as soon as possible. As I have said, the implementation of CSR is not only a way of building society, but also a strategy to enhance the competitiveness and sustainable development of the business.

* In this context, in order to keep pace with the trend of the world's businesses, what should Vietnamese businesses do to support companies in implementing CSR?

I think, first of all, the Government of Vietnam and the ministries should create more specific policies to encourage enterprises to implement CSR requirements. VCCI itself will also have to step up its support through collaboration with other partners around the world, like the UN and World Bank, to have more concrete actions to encourage businesses, not only in raising awareness, but also in offering capacity development programs to bring the best and typical practices to SMEs in Vietnam. In addition, the government should collaborate with ministries, especially the National Council for Sustainable Development and Competitiveness Improvement, to give guidance to businesses on each step to make sustainability reports.

Here I want to emphasise that sustainability reporting is now a trend that enterprises in the world have done, but only a few of Vietnamese businesses have made this report. Sustainability reporting not only helps businesses be more competitive and transparent, but also attracts more investment. In the coming time, the National Business Council for Sustainable Development is planning to make a proposal to the Government to support businesses in making this report.-VNA

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