What It Means To Do Business Responsibly

By Cam Ha

November 13, 2020| 09:49 am GMT+7

Last year the bank I used to work for announced its withdrawal from two major thermal power projects.

Ever since the Paris Agreement, an agreement within the 2015 United Nations Framework Convention on Climate Change, took effect in November 2016, financial institutions around the world have been facing huge pressure from non-governmental organizations (NGOs) and civil society organizations (CSOs) to say “no” to the coal mining and coal-fired power to keep the earth’s temperature from rising by more than 2 degrees Celsius.That was in line with a commitment it had made in 2018 to stop funding new coal-fired power plants. To me, that was one of the most notable examples of fulfilling corporate social responsibility (CSR).

The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping the global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius, according to the UN Climate Change.

So far more than 100 financial institutions, including banks and insurance firms, around the world have divested from coal-fired power projects.

When I was still working at the bank, I saw it announce the specific categories it would refuse to fund in the oil and gas, fossil fuels, mining, agriculture, and fisheries sectors. The bank itself has an ambitious goal of reaching zero emissions in its operations by 2030 through the use of renewable energy.

I learned about the concepts of “fair trade” and “CSR” for the first time while working as a reporter during the process of Vietnam joining the World Trade Organization (WTO) in 2005.

The term CSR had been used by economists since the early 1950s and had become popular in the U.S. since the 1970s.

When it first came to Vietnam, it referred mostly to good labor policies or standards to ensure food safety and hygiene, especially for exports.

With the boom in trade post the WTO accession, Vietnamese companies gradually became familiar with technical barriers in the European, American and Japanese markets.

In free trade agreements the country signed recently such as the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), CSR regulations occupy a separate chapter by themselves.

Preferential market access and tariffs are linked to labor and environmental protection legislation, transparency and good governance.

But from what I have observed many companies in Vietnam are yet to get a clear understanding of CSR, not surprising since micro, small and medium-sized account for 97 percent. Most of them face certain challenges and lack the resources and opportunities needed to either learn or care about their social responsibilities.

Then I have seen some companies that do well and earn high profits but misunderstand the concept of CSR. They stop with spending money on building churches, pagodas and temples, performing rituals and making offerings to the gods they worship but ignore problems faced by the community and society.

Both the government and businesses need to ensure economic growth on the basis of the rational use of resources to meet the needs of today’s generation without harming the next.

CSR involves not just business ethics but also a commitment by each individual and organization to contribute to improving the community in which they live and operate.

Business executives, shareholders, employees, customers, contractors… all can contribute to the implementation of CSR.

We have seen many sad cases of companies giving CSR the go-by, like in 2008 when monosodium glutamate producer Vedan Vietnam admitted it had been discharging untreated waste into the Thi Vai River in the southern Dong Nai Province for years and in 2016 when Taiwanese steel plant Formosa caused one of the biggest environmental disasters in Vietnamese history, polluting 200 kilometers (125 miles) of coastline in the central Ha Tinh Province and three neighboring provinces.

The landslide triggered by floods in October in the central province of Thua Thien-Hue that killed five workers at the Rao Trang 3 hydropower plant and left 12 others missing is the most recent example. It should be noted that the ability to manage disaster risks is part of CSR.


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Rescuers look for workers buried under a landslide at the Rao Trang 3 hydropower plant in the central Thua Thien-Hue Province in October 2020. Photo by VnExpress/Vo Thanh.

Along with that, CSO, NGO, the press, experts and active citizens should put greater pressure on behaviors that damage the environment or are irresponsible to the employees and the community. During every rainy and stormy season, for every tribulation, we also witness countless noble deeds by people from everywhere. All relief activities are worth cheering, but they are not enough. For sustainable development, CSR plays a key role, with state agencies having to create a dialogue channel and have both incentives and sanctions to make businesses more responsible and, if possible, do business more kindly.

Businesses create jobs and wealth, but doing businesses by destroying the ecosystem and disregarding the health and safety of people will be self-destructive.

Living and operating in harmony with nature and with the community is no longer a choice but our only option before it’s too late.

*Cam Ha is an entrepreneur and a communication specialist. The opinions expressed are her own.

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