Pioneering sustainability reporting increases value for businesses

A view of the workshop. (Photo: sbv.gov.vn)

During a workshop on reporting practices held on in Hanoi on June 6, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu said international organisations and governments of countries are increasingly interested in a company's Environmental, Social and Governance (ESG) standards. So the bank wants to promote standardisation of regulations and policies within agencies, financial institutions and banks and get them to publish such information within a sustainable development report.

In Vietnam, organisations and businesses have gradually realised the importance of building a sustainable development report, so they have pioneered preparing such reports even before there was a mandatory legal requirement to do so.

The banking industry is also aiming to open up many opportunities related to sustainable business. Information related to sustainable development will support analysis and decision-making to help banks comply with regulations and identify factors that promote more sustainable business operations.

Deputy Director of the SBV’s Department of Credit for Economic Sectors Pham Thi Thanh Tung said that since 2022 the SBV has added content on the activities of the banking industry towards a green economy and sustainable growth in its annual reports.

Several banks have so far published a separate sustainable development report such as BIDV, ACB and HDBank, while some others integrate the report in their annual reports.

As a bank that identifies the need for sustainable development, Le Ngoc Lam, General Director of BIDV, said BIDV has established a steering committee and a project management board to build and implement a sustainable development strategy and ESG overall practices to strongly promote the implementation of sustainable finance operations. The year of 2023 marked the seventh consecutive year that BIDV has implemented a sustainable development report according to a comprehensive plan in accordance with guidelines of Global Reporting Initiative (GRI) standards.

BIDV is the country’s first bank to issue a sustainable loan framework according to international standards. The bank implements its risk management appraisal according to SBV’s regulations on 100% of investment projects with the environmental affecting factors.

Thanks to the work, BIDV has made many important contributions in the sustainable development journey of the Vietnamese economy, Lam said, noting green projects, which received BIDV’s funding in 2023, increased by 24.1% compared to 2022.

To further encourage Vietnamese businesses to practise sustainable development reporting, experts suggest that Vietnam need to perfect the legal framework and develop detailed standards for the disclosure of sustainable development information, in accordance with laws and socio-economic conditions of the country to help increase transparency and evaluate effectively the reporting information.

Besides promoting supporting policies on training to help enterprises improve knowledge and skills in practising sustainable development reporting, the Government should also issue clear incentive policies, such as tax incentives and financial support, to encourage businesses to promote the preparation of sustainable development reports.

In addition, it is also necessary to strengthen the cooperation between Vietnamese agencies and international organisations in building the sustainable development data framework to ensure it is comprehensive and transparent./.