Final Assignment Corporate Social Responsibility.pdf

VIETNAM NATIONAL UNIVERSITYUNIVERSITY OF ECONOMIC AND BUSSINESS

FINAL ASSIGNMENT

CORPORATE SOCIAL RESPONSIBILITY

PhD Vu Thi Van Anh

Ha Noi – 2023

UNIVERSITY OF ECONOMICS AND BUSSINESSSCHOOL OF BUSINESS ADMINISTRATION

FINAL ASSIGNMENT

CORPORATE SOCIAL RESPONSIBILITY

PhD Vu Thi Van Anh

Ha Noi – 2023Topic 3:

Please look for information about a Vietnamese enterprise that you know well, and:

1 Analyze its CSR strategy and practice

2 What are the main challenges faced by that company when building and applying its CSR strategy? Please give examples.

3 If you were a member of the Board of Directors of that company and took responsibility for CSR activities, what would you do to deal with those difficulties?

4 In Vietnam, are there any official guidelines or regulations on CSR for enterprises? What would you do as the organization's leader to promote CSR activities in relation to policy compliance?

TABLE OF CONTENTS

1 Executive Summary 5

2 Introduction 5

3 Findings 6

3.1 Traphaco’s CSR and practice 6

3.2 The main challenges faced by Traphaco when building and applying its CSR strategy 9

3.3 Official guidelines or regulations on CSR for enterprises 10

4 Discussion 11

5 Conclusion 13

6 Recommendations 13

7 References 14

1 Executive Summary

Corporate social responsibility (CSR) is one of the hot issues and receives relatively great attention from the state, businesses, investors, consumers and the whole society in the current period Vietnam is the one strongly, developed countries and is on the way of integration in the world, so the issue of CSR is becoming more and more important This article aims to offer insights into Traphaco's CSR strategy and highlight the challenges businesses face during its implementation From there, the author proposed some solutions to address these issues In addition, the article also mentions regulations guiding the implementation of social responsibility for businesses in Vietnam And as the head of the organization, the author will propose some solutions to promote CSR activities related to policy compliance.

2 Introduction

Traphaco was established on 28/11/1972 as the Drug Manufacturing Division of the Railway Medical Company Then officially named Traphaco Joint Stock Company on 05/07/2001 Traphaco JSC operates in many different fields such as pharmaceuticals, pharmaceuticals, chemicals, medical supplies, cosmetics, food, alcohol, For nearly 50 years of establishment and development, Traphaco has always persistently pursued the path of sustainable development, aiming at product quality and service quality as criteria, so it has become the leading famous brand in the pharmaceutical industry in Vietnam.

Traphaco has always been consistent with the mission of "Creating green products to take care of people's health" Currently, Traphaco is the leading oriental medicine brand, winning many domestic awards for sustainable development: Top 10 CSI Sustainable Enterprises (2016, 2017, 2018, 2022), Enterprise for employees (2016, 2017, 2018, 2022), Excellent and Sustainable Enterprises in Asia (2022)

The company applies the Quality Management System in the Pharmaceutical industry according to the standards of the World Health Organization GPs - WHO, the Quality Management System ISO 9001:2015, the Environmental Management System ISO 14001:2015, the ISO 14001:2015 Environmental Management System, the Quality Management System for medical equipment ISO 13485:2016, the Food safety Management System ISO 22000:2018

3.Findings

3.1 Traphaco’s CSR and practice

For Traphaco, social responsibility is the ideal and top goal that this business has always aimed for over the past half century Traphaco has implemented the strategy "Road of Green Health", Traphaco has set out four development goals: Source of Green Materials; Applying Green Technology; Creating Green Products and Providing Green Healthcare services

Source of Green Materials: Medicinal materials are produced on the basis of a green supply chain from raw materials Traphaco pioneered the construction of growing areas according to GACP-WHO and has built over 800 hectares of medicinal herb growing areas for more than 10 key medicinal herbs in 28 provinces and cities nationwide After decades of development and construction, Traphaco's clean medicinal area has so far spread over 36.300 hectares, in 24 provinces and cities from North to South, including GACP-WHO standard growing areas in Phu Yen, Artichokes in Lao Cai, Dinh Lang in Nam Dinh,

Applying Green Technology: At Traphaco, the application of green technology is associated with modern and environmentally friendly technology lines and is concerned at every stage of the production process In the preparation of extracts, the company combines green technology (technology to reduce harmful effects on the environment) by optimizing processes to reduce energy consumption (electricity, coal), and minimize the use of organic solvents

Creating Green Products: Traphaco focuses on the research and development of medicinal products - green products

Providing Green Healthcare services: Traphaco provides green services along with natural health care services with products derived

from nature The company is also interested in informing and guiding users of its natural products and Vietnam in general for long-term health

It can be said that, with this strategy following the core topics of social responsibility mentioned in ISO 26000:2010, Traphaco has accomplished the following:

Labor practices: the company uses environmentally friendly materials that are safe or less harmful to the environment and workers' health The company is interested in training human resources to raise awareness about technology and identify, manage, and reduce possible hazards in the workplace to ensure the health of workers

The environment: Planting and harvesting processes are implemented in an environmentally friendly direction: crop rotation to limit the use of chemicals - pesticides, choosing planting areas with good soil, clean water, and irrigation conditions To ensure the safe supply of medicinal herbs In addition to providing quality medicinal herbs for production, the cultivation of medicinal herbs by the company contributes to increasing carbon storage, reducing CO2 dispersed in the air, and keeping fruits and vegetables The earth slowly heats up

Fair operating practices: The company maintains a win-win

relationship with farmers and commits to purchasing raw materials at the planting area 10% higher than the market price, not squeezing the price

Consumer issues: The company is interested in informing and

guiding consumers to use natural products from the company in particular and Vietnam in general for long-term health

Community involvement and development: The GreenPlan project

"Research and sustainable development of Traphaco medicinal herbs" has exploited national resources, contributed to people's health care, created jobs, and increased incomes for tens of thousands of farmers, helping them out of poverty

3.2.The main challenges faced by Traphaco when building and applying its CSR strategy

In the process of implementing the "Green Health Road" strategy, Traphaco had to deal with many difficulties and obstructions Below are the main challenges faced by Traphaco:

Cost: The use of green materials and green technology to produce

green products and provide green services requires extremely large production costs and long-term investment To develop clean medicinal areas requires a lot of human resources, especially the cost of training workers to follow the clean growing process During the production process, it is necessary to have high technology to process products and at the same time treat wastewater and environmental pollutants to minimize environmental problems This can cause financial difficulties for businesses because they must focus their budget on investing in a "green" strategy

Product quality control: For products to meet international quality

standards, the production process must be guaranteed and

synchronized in all parts Especially at the raw material stage, it is difficult to ensure that farmers follow the production process of Traphaco

Complexity in supply chain management: As mentioned above,

Traphaco associates with many different partners on the supply chain, from raw material suppliers to production and distribution partners This diversity increases complexity in managing processes and ensures that all partners are on board with implementing CSR standards.

Employees: employees are the principle of the enterprise, but it is very

difficult for all employees to understand and follow the strategy of social responsibility In addition, training a large number of employees will also make it difficult to ensure the ability to perceive and perform equally well in each individual.

3.3.Official guidelines or regulations on CSR for enterprises

Currently, in Vietnam, there are governmental standards and restrictions on CSR for businesses in Vietnam The Law on Enterprises is the most important legal instrument in Vietnam concerning CSR The Law on Enterprises sets out the legal framework for CSR in Vietnam It requires enterprises to comply with the laws and regulations related to environmental protection, labor, and social welfare, and to fulfill their social responsibility In addition to the Law on Enterprises, there are other legal documents related to CSR in Vietnam, including: The Law on Environmental Protection, The Law on Labour In the current period, businesses also have many opportunities to access documents guiding the implementation of social responsibility around the

world, such as: ISO 26000, SA8000, WCA (Workplace Condition Assessment),

Moreover, the Vietnam Chamber of Commerce and Industry (VCCI) has also developed a set of CSR guidelines for Vietnamese enterprises These guidelines provide practical recommendations for enterprises on how to integrate CSR into their business operations and strategies.

Vietnam is advocating the development of a sustainable development strategy suitable to the specific conditions and circumstances of the country The basic contents of Vietnam's sustainable development strategy include:

Rapid development must be combined with sustainability in both the short and long term.

Growth in quantity must be accompanied by improving the quality, efficiency, and competitiveness of the economy.

Special attention must be paid to the development of the knowledge economy in addition to exploiting development factors broadly.

Economic growth must be linked with cultural development, comprehensive human development, democracy, progress, and social justice, while also alleviating poverty.

Environmental protection and improvement must be given importance at every development step.

Socio-political stability must be ensured as a premise and condition for rapid and sustainable economic development

However, in fact, the implementation of social responsibility is both mandatory, and voluntary The state does not have strong enough sanctions

for violations of social responsibility This also creates limitations in the implementation of corporate social responsibility in Vietnam.

4.Discussion

As a member of the Board of Directors of the company and responsible for CSR activities to overcome difficulties, the author proposes a number of solutions that businesses can consider implementing:

To increase capital for production, Traphaco can mobilize capital through issuing stocks, bonds, bank credits, calling for financial support from the state, etc , cut unnecessary costs to avoid waste and use capital efficiently In addition, they can negotiate favorable payment terms with supply partners that can help improve cash flow and reduce financial pressure right at the time of need.

Quality control must be ensured right from planting and harvesting, to transportation and processing of products When signing a contract with a farmer, there should be clear regulations on how to plant and care for plants, and what happens when materials are not up to standard The company can set up a quality control department to closely monitor the production process to ensure that product quality remains the same when delivered to consumers

To deal with complexity in supply chain management, Traphaco need to develop and implement strict quality control processes throughout the entire supply chain, and implement monitoring systems to measure the performance and social impact of supply chain partners If possible, they can diversify their supply sources and reduce their dependence on a few key partners And finally, provide training and support to supply chain

partners on CSR-related issues, especially small-scale partners that need special support to comply with standards.

Create a culture of change and accountability for employees Implement training programs to build environmental awareness and get excited about social responsibility initiatives To increase awareness of CSR for employees, Traphaco needs to Communicate CSR plans and goals to all employees Organize training and simulation sessions to give employees the opportunity to apply what they have learned in their real work In addition, evaluation activities can be organized to measure the effectiveness of the training program.

5.Conclusion

The article provides information about strategy, implementation practices and points out some challenges in the process of implementing Traphaco's social responsibility In addition, the author also proposes some solutions that businesses can implement to overcome their remaining difficulties In addition, the report also emphasizes CSR regulations for businesses in Vietnam stipulated in the Enterprise Law as well as opportunities to access documents guiding the implementation of social responsibility around the world such as: ISO 26000, SA8000, WCA, of Vietnamese businesses and CSR Guidelines developed by the Vietnam Chamber of Commerce for businesses.

6 Recommendations

As the leader of the organization to promote CSR activities related to compliance with government policies, enterprises can do some of the following activities: