Annual sustainable development reports are a necessity
Annual sustainable development reports are a necessity
Listed companies should find a way to include sustainable development in their business strategies as they seek to improve operations, experts said on Monday.Doing so will make the business more attractive to potential investors and shareholders as they now pay more attention to green business strategies, according to Tran Thi Thanh Tu, head of the financial-banking department at the University of Economics and Business under the Vietnam National University.
As companies look for financing sources from green investors, it will make their business more profitable and reputable in the long term, she told a seminar on green finance and sustainable development.
However, many of the 200 surveyed companies do not care about sustainable development and green finance as they consider the two things “luxury commodities” given their limited resources, Tu said.
About 440 listed companies were evaluated for last year’s sustainable business awards. However, only 23 firms made it to the final assessment and those firms were the largest companies by market value.
Some of the finalists were the Vietnam Dairy Products JSC (Vinamilk), insurer Bao Viet Holdings and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).
According to Nguyen Viet Thinh, CEO of the Vietnam Institute of Directors, only 11 companies last year had independent sustainable development reports, which was almost double the number recorded in 2017. But it was still modest compared to the size of the Vietnamese business community.
Notably, the top 10 companies nominated for the awards had their sustainable development reports included in the annual reports. The largest firms by market capitalisation maintained a good quality of reports for six straight years.
Thinh said the sustainable development report must be finalised in the April-May period and the sooner it gets done the better.
Data should be collected consistently during the financial year and the report should be treated as a long-term opportunity for the business, he added.
Even top companies with best sustainable development reports have not performed data analytics to see how they have changed through the years, Thinh said.
He suggested the board of directors must play a major role in making sustainable development strategies popular to investors and shareholders, thus improving the company’s transparency and corporate governance.
“The board of directors must be strongly committed to delivering sustainable development activities and ensure the company stays on its path towards a sustainable business operation,” he said.
According to Nguyen Cong Minh Bao, Director of the Global Reporting Initiative (GRI) Vietnam, reputational risks and benefits, regulatory requirements and CEO’s directive, operational risks and benefits, investors’ interests and requirements, and market growth opportunities are among the most common factors that prevent a business from striving towards sustainable development.
Hoang Duc Hung, deputy director of PricewaterhouseCoopers (PwC) Vietnam, told attendees that compiling a sustainable development report requires the company to have sufficient human and financial resources.
Small- and medium-sized enterprises (SMEs) have to establish a specialised unit to monitor the compilation of sustainable development reports, Hung said.
“Financial and non-financial strategies must be developed within the business. And anyone responsible for preparing the firm’s sustainable development report must make sure the system and workflow are passed to the next generations, saving expenses and workloads for the business.”
“Sustainable development reports must be standardised so that they are collectable at the end of the year,” Hung said.
