VN firms’ awareness of social responsibility rising
Vietnamese firms are becoming more aware of corporate social responsibility (CSR) in terms of building brand, securing key staff and winning future contracts, said a recent report.
For them, enhancing public attitude towards the brand is seen as most important (93 percent), followed by Investor Relations (89 percent) and Staff Recruitment and Retention (86 percent), said the 2011 Grant Thornton International Business Report (IBR).
It shows genuine social responsibilities within the context of securing a financially successful business, according to the report.
Moreover, Vietnam does not see CSR as a ‘Save the Planet’, protecting the environment, issue but as a much wider commercial and people subject.
“Looking at the data in detail, as an emerging economy, Vietnam is at the forefront of its ASEAN neighbors in developing a very optimistic attitude to CSR,” said Kenneth Atkinson, Managing Partner of Grant Thornton Vietnam.
“Whilst mature economies are continuing the struggle to rebuild businesses after the economic downturn, Vietnam can take comfort from its GDP growth position and maintain its progress in developing positive opinion in its employees, consumers and potential business partners,” he said.
“As Vietnam moves towards a more open and transparent business environment, it should take the opportunity of encouraging more complete financial and business reporting,” Atkinson said.
“Potential investors will have more confidence in an emerging market that shows leadership in implementing socially responsible practices as a contribution to businesses efforts to attract and retain skilled workers, build brand values and appeal to multinationals for which CSR is becoming higher on the supplier/investment selection agenda,” he added.
On the global scale, businesses remain focused on the merits of CSR in terms of building brand, securing key staff and winning future contracts.
Some 56 percent of businesses cite public attitudes/brand building and recruitment/retention of staff as the key drivers this year, alongside cost management, highlighting the importance of public opinion in shaping businesses' CSR priorities.
However, just 36 percent of businesses globally are motivated to move to more ethical practices by a desire to 'save the planet', down from 40 percent in 2008.
As businesses in mature markets continue to grapple with sluggish growth, businesses in emerging economies appear most concerned with reducing their impact on the environment, said the report.
Some 60 percent of the BRIC nations and 59 percent of those in the ASEAN group cite saving the planet as a driver towards more ethical business practices, compared to just 30 percent in the EU and 27 percent in North America.
"In an increasingly crowded and dynamic marketplace, businesses globally are becoming more aware that adopting a proactive approach to wider corporate social responsibility issues can help them to stand out in the minds of employees, consumers and potential partners,” said Ed Nusbaum, CEO of Grant Thornton International.
“Moreover, as businesses, and indeed consumers, in mature economies struggle with the fallout from the economic downturn, altruistic concerns over the environment have been forced into a backseat role,” he said.
Businesses are focusing on the bottom line and consumers are looking for ways to make declining real disposable incomes go further. That said, businesses in emerging markets, as we have seen with the wider global economy, appear ready to take the initiative in driving the CSR agenda forward," he added.
Meanwhile, levels of CSR activity undertaken in relation to the environment, workforce and wider community vary significantly across the globe.
Businesses in northern Europe and Southern Africa, together with much of North America and the Asia-Pacific region lead the way in initiating socially responsible practices, with those in mainland Europe lagging behind.
The survey also uncovered some polarization in the reporting of CSR practices: A quarter of businesses globally report their CSR activity, but this ranges from 53 percent in Latin America and 41 percent in the BRIC economies to 17 percent in North America and 18 percent in the G7 economies.
Moreover, businesses are divided as to whether the reporting of CSR activity should be integrated with financial reporting: 44 percent agree that this represents best practice, but 40 percent disagree with a further 16 percent unsure.
"All businesses should look closely at the potential commercial benefits of reporting their CSR activity. A competitive advantage exists for businesses which can demonstrate leadership in implementing socially responsible and transparent practices and seize the opportunity to attract and retain skilled workers, build brand value and secure future contracts with multinationals who frequently adopt strict CSR guidelines in selecting their suppliers," Nusbaun said.
The Grant Thornton IBR provides insight into the views and expectations of over 11,000 businesses per year across 39 economies.
Data collection is managed by Grant Thornton International's core research partner - Experian Business Strategies. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire.
From 2011, fieldwork takes place on a quarterly basis every quarter with fieldwork lasting approximately 6 weeks.