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Forum urges companies to govern for sustainability

forum urges companies to govern for sustainability hinh 0

The event was held by the State Securities Commission of Vietnam (SSC), the Ho Chi Minh Stock Exchange, the Hanoi Stock Exchange, and the International Finance Corporation (IFC).

SSC Vice Chairman Pham Hong Son said that Vietnam aspires to develop fast and sustainably towards becoming an upper-middle-income country. To realise this goal, many organisations and businesses have paid attention to governing for sustainability, while still balancing environmental and social aspects. 

Amar Gill, Managing Director and co-head of Investment Stewardship at APAC BlackRock, said governing for sustainability is a long-term issue and such, directors’ boards need to be aware of this issue to make long-term management strategies.

Meanwhile, Dominic Scriven, Executive Chairman of Dragon Capital Group Ltd., said that governing for sustainability benefits not only enterprises, but also other relevant parties and consumers. In many countries, there are companies unaware of the commitments needed for sustainability principles, and when potential risks become a reality, they will have a great toll on their prestige and time, he said.

Scriven added that governing for sustainability requires not only verbal commitments but also adequate awareness and action plans. Directors’ boards play a crucial role in governing for sustainability and they require the participation of independent and gender-balanced members, which is also a factor of sustainable development, he added.

Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Laos, said capital markets have paid increasing attention to the ways boards of directors deal with issues of environmental and social impacts. 

The environment-, society-, and governance-related practices have become an important factor in their investment decisions, he said, noting that with a clear connection between the proper governance of environmental and social impacts and long-term business efficiency, the companies committed to good sustainability practices will have more of an advantage in attracting attention from investors.

According to the ASEAN Corporate Governance Scorecard 2017-2018, the average corporate governance in Vietnam scores 41.3 points, compared to the ASEAN average of 71.01 points, out of the maximum 130 points. The country’s average score has increased by some 9 percent annually since 2012.