List of Abbreviations BRICS : Brazil, Russia, India, China and South Africa CSR : Corporate Social Responsibility ESG : Environmental, social and governance FSSC : Food Safety System Cer
The significance of matters
Building up and publishing sustainability reporting is not strange around the world but it is kind of new in Vietnam
Sustainability reporting fosters stronger relationships between enterprises and their stakeholders, investors, and the community, while enabling businesses to adapt to a rapidly changing environment This practice not only mitigates risks but also establishes a foundation for sustainable competition in the future.
Many companies globally are now incorporating sustainability reporting into their annual reports, highlighting key information about environmental, social, and governance (ESG) factors This approach demonstrates the connection between sustainability indicators and long-term sustainable development, as well as their impact on manufacturing productivity.
Hence, with those information that The sustainability reporting will bring, building up and publishing The sustainability reporting should be carried out in every countries
Sustainability reporting in Vietnam is an emerging field, with only a limited number of listed companies on the stock market having published such reports The information contained in these sustainability reports is crucial for the development of enterprises and their stakeholders, highlighting the importance of transparency and accountability in business practices.
Transparent communication of financial operations, environmental impact, and social responsibility is essential for enterprises to engage effectively with stakeholders A strong commitment to sustainable development is crucial for attracting and securing investments, serving as the cornerstone for sustainable growth in all countries.
Therefore, building up and publishing The sustainability reporting at enterprises in Vietnam is being encouraged, the initial step is to encourage listed companies to do it
The sustainability reporting will help the enterprise prepare for the trend of new development, allocate the responsibility and build up enterprise’s internal system in order to enhance effective operation
Sustainability reporting is crucial for considering stakeholder benefits, as these individuals or groups are directly affected by a company's operations Effective sustainability reporting enhances the enterprise's prestige and business capabilities by fostering trust among various stakeholders.
Stakeholders are increasingly interested in understanding how new projects, system improvements, products, and services can positively impact the environment and society while benefiting core business operations Sustainability reporting, which includes specific targets and measures, serves as a transparent method for evaluating and comparing an enterprise's effectiveness in managing risks This approach demonstrates how sustainable operations can lead to positive investment returns and enhance overall business efficiency.
Global investors are increasingly focused on how sustainable operations management strategies can enhance a company's competitiveness and innovation Concurrently, governments are actively working to foster change and support businesses committed to sustainable development initiatives.
Research Objectives
This article aims to provide an overview of sustainability reporting, highlighting its significance and impact on business operations and stakeholders Understanding sustainability reporting is essential for organizations looking to enhance transparency, build trust, and drive positive environmental and social change.
Sustainability reporting is a crucial practice that helps organizations communicate their environmental, social, and governance (ESG) performance This article will explore the theoretical framework underpinning sustainability reporting, highlighting its significance in promoting transparency and accountability Additionally, it will examine international experiences in sustainability reporting, with a particular focus on developing countries, as their practices are more relevant to the Vietnamese market.
Sustainability reporting may be a new concept for many readers, yet its significance is closely tied to individuals and society Understanding sustainability reporting is essential, particularly for stakeholders who rely on published enterprise information to make informed decisions.
This article aims to inspire readers to delve deeper into Sustainability Reporting by exploring its theoretical framework, international practices, and the current state of Sustainability Reporting in Vietnam The goal is to make sustainability reporting as commonplace and familiar as traditional company annual reports.
At that time, enterprise’s information is published annual will be sustainable, long – term determination, paying attention to social elements, human, environment and contribute to make information transparent.
Research Methodology
The methodology of this thesis focuses on the analysis and synthesis of various sources, including documents, textbooks, journals, reputable websites, and articles It also incorporates surveys from the Big 4 accounting firms and theses from multiple countries worldwide, all related to the field of forensic accounting.
Forensic accounting is a nascent field in Vietnam, resulting in a scarcity of relevant literature This article draws comparisons with developed nations and those with similar economic conditions, offering insights and recommendations tailored for Vietnam's context.
The scope, scale of the research
Along with suggestions and solutions for the coming time
This article provides a comprehensive overview of Sustainability Reporting, highlighting its various forms globally and its current status in Vietnam It emphasizes three key aspects: the environment, human well-being, and society Additionally, the article discusses international standards that support sustainability reporting and examines the extent to which these standards are implemented by Vietnamese enterprises.
In conclusion, this article addresses the current state of sustainability reporting in Vietnam and offers solutions to the challenges faced by Vietnamese enterprises in the reporting process.
This thesis focuses on the experiences of countries such as Turkey, India, Sri Lanka, and Vietnam, alongside various documents and research studies Its primary aim is to analyze and synthesize theoretical aspects of forensic accounting through a comprehensive review of relevant literature.
Therefore, the thesis does not cover detailed or specific cases of forensic accounting in practices
Theoretical framework
Introduction about Sustainability Reporting
Sustainability Reporting was developed from Sustainable to sustainable development to sustainable development reporting
According to Global Reporting Initiative (GRI):
Sustainability Reporting is a crucial document that outlines a company's or organization's economic, environmental, and social impacts resulting from its daily operations This report not only reflects the organization's values and governance structure but also illustrates the connection between its strategic goals and its dedication to fostering a sustainable global economy.
Sustainability reporting enables organizations to assess and convey their economic, environmental, social, and governance performance, facilitating goal setting and effective change management It serves as a crucial platform for communicating both positive and negative sustainability impacts.
Set of standards, regulations affecting Sustainability Reporting
Urban sustainability reporting serves as a vital tool for local governments, individuals, businesses, and organizations to track progress towards urban sustainability goals The process begins with defining these sustainability objectives, followed by a scoping stage It includes selecting a conceptual framework for reporting, preparing a list of potential sustainability indicators, and evaluating them against various criteria Finally, a final set of indicators is chosen, results are analyzed, and findings are presented to the target audience, with periodic assessments of indicator performance to ensure ongoing progress.
Sustainable development, as defined by the United Nations Commission on Brundtland on March 20, 1987, emphasizes the importance of meeting current needs without compromising the ability of future generations to fulfill their own This concept underscores the balance between progress and environmental stewardship, ensuring that development today does not hinder future sustainability.
Sustainability reporting communicates both positive and negative main activities of business that impacts to social, organization’s economic and environmental effects both positively and negatively resulting from companies’ activities
1.2 Set of standards, regulations affecting Sustainability Reporting
There are many providers of guidelines of Sustainability Reporting In this thesis, I focus on three most widespread and comprehensive sets of standards as below
1.2.1 Global Reporting Initiative's Sustainability Reporting Standards (GRI)
1.2.1.1 Introduction GRI is Global Reporting Initiative who is an independent international organization that has pioneered sustainability reporting since 1997
The vision of GRI is to cultivate a flourishing global community that uplifts humanity and enriches the essential resources vital for all life Meanwhile, GRI's mission focuses on empowering decisions that generate social, environmental, and economic advantages for all individuals.
GRI empowers businesses and governments globally to grasp and convey their influence on vital sustainability challenges, including climate change, human rights, governance, and social well-being This understanding fosters actionable steps that yield social, environmental, and economic advantages for all The GRI Sustainability Reporting Standards are crafted through genuine multi-stakeholder collaboration and are grounded in the public interest.
In the world, there are quite a lot of businesses that have announced Sustainability Reporting Such as 93% of the world’s largest 250 corporations report on their sustainability performance (KPMG, 2017)
1.2.1.2 GRI Standard The GRI Standards are the first global standards for sustainability reporting They represent for reporting on a range of business, environmental and social impacts
The Global Sustainability Standards Board (GSSB), an independent body established by GRI, issues the GRI Standards This ensures a transparent process for the development of these standards, encompassing project identification, prioritization, content creation, public exposure, feedback consideration, and the final release.
The GRI Standards, derived from the latest GRI Guidelines (G4) released in May 2013, represent over 15 years of global, multi-stakeholder development These guidelines have been restructured into modular, interrelated standards known as the GRI Sustainability Reporting Standards The G4 Guidelines and their associated resources will remain valid until June 30, 2018.
The GRI Standard for Sustainability Reporting included:
✓ GRI 403 – Occupational Health and Safety
✓ GRI 405 – Diversity and Equal Opportunity
✓ GRI 407 – Freedom of Association and Collective Bargaining
✓ GRI 409 – Forced or Compulsory Labor
✓ GRI 411 – Rights of Indigenous People
✓ GRI 416 – Customer Health and Safety
1.2.2 The Organization for Economic Co-operation and Development (OECD Guidelines for Multinational Enterprises)
The Organization for Economic Cooperation and Development (OECD), founded in 1960, is an intergovernmental organization comprising many of the world's most industrialized nations It collaborates with governments to analyze the factors influencing economic, social, and environmental changes, aiming to find solutions to shared challenges The OECD's initiatives on chemical safety fall under its Environment, Health, and Safety Program.
The OECD has issued guidelines about Minerals, Extractive, Garment and Footwear, Agriculture, Institutional Investors, Child Labour but that is not specific as GRI Standard
1.2.3 The United Nations Global Compact (the Communication on Progress)
The United Nations Global Compact (UNGC) is a key initiative in corporate social responsibility, designed to help companies align their strategies and operations with essential principles related to human rights, labor standards, environmental sustainability, and anti-corruption efforts.
After 15 years of research on the United Nations Global Compact (UNGC), this article presents a systematic literature review that encapsulates the ongoing debate across five key areas: motivations for UNGC adoption by companies, identified weaknesses, impacts of the initiative, and contextual factors influencing both adoption and performance The review highlights several factors that enhance understanding within these research streams Additionally, it identifies critical research gaps and proposes hypotheses for future empirical validation, drawing upon established theoretical frameworks such as stakeholder theory integrated with Human Resource Management and signal theory.
The United Nations Global Compact has released a Basic Guide for the Communication on Progress, along with a resource titled "Making the Connection," which utilizes GRI's Guidelines to assist organizations in effectively communicating their progress related to the UN Global Compact.
However, these instructions is not specific as GRI Standard.
The Situation of the Sustainable Reporting in many countries in the world
There are more than 600 corporations in the world in 2014 from 65 countries who attended in carrying out and publishing the sustainability reporting (Pham Thi Minh Hong,
Over 30 countries have established legal regulations for sustainability reporting, with approximately 65% of these nations making it a mandatory requirement.
Therefore, in general the sustainability reporting has been performed by many countries around the world, not only in the developing countries but also in the developed countries
1.3.1 Sustainability reporting in public sector organizations
Sustainability reporting remains in its early stages, as noted by researchers such as Guthrie and Farneti (2008), Dumay (2010), and Lodhia (2012) In 2014, only 114 companies globally had released a sustainability report following the GRI Sustainability Reporting Guidelines However, there has been a significant increase in sustainability reporting in recent years, with most organizations surveyed having published reports thereafter.
2010 The survey results highlighted that the social responsibility sustainability department was more often the main responsible for developing sustainability reports
Schaltegger and Wagner (2006) suggest that when sustainability reports are developed by a single department, it can lead to a compartmentalized process However, survey responses indicate that various departments are also engaged in or responsible for the reporting This evidence implies that the legitimacy of a department in publishing sustainability reports may not necessarily correlate with its authority, as noted by Lodhia et al (2012).
Sustainability Reporting remains a voluntary practice, with many companies yet to publish these reports The creation and dissemination of Sustainability Reporting are primarily motivated by internal factors, involving significant employee participation The issuance of these reports holds substantial importance for both business operations and stakeholders, as it enhances organizational transparency and provides valuable information Ultimately, Sustainability Reporting plays a crucial role in promoting sustainable development initiatives within organizations.
It is necessary to pursue a comprehensive study to understand the links between processes and to promote sustainable development efforts across the organization
Engaging external stakeholders in the sustainable development reporting process is crucial, as they can actively contribute at various stages Their involvement includes offering insights during the design phase, aiding in data collection, evaluating performance, and reviewing reports, ultimately enhancing the effectiveness of sustainable development initiatives.
Sustainability Reporting significantly influences organizational culture and can lead to proactive changes among internal stakeholders According to Lozano (2015), organizations that prioritize sustainability engage with 'soft' issues, facilitating a shift towards a more sustainable orientation Consequently, Sustainability Reporting emerges as a crucial process in fostering the sustainable development of enterprises.
1.3.2 Experience of Sustainability Reporting in emerging market
The application of sustainability reporting in developed countries is considered to be more advantageous than developing countries
Vietnam is a developing country so it is easy to have correlation, gain and draw on experience from the emerging countries rather than developed countries
Thus, the author presents the experience of seting up and declaring sustainability reporting in emerging markets Such as Srilanka, Turkey, Indian,…
1.3.2.1 Situation of Srilanka Much of the investigated on sustainability reporting research is done in developed countries, but rarely in developing countries
And the article by Dinithi Dissanayake, Carol Tilt, Maria Xydias-Lobo mentioned this report in a developing country, Sri Lanka
Sri Lanka, a nation of 20.3 million people, is grappling with post-conflict economic growth alongside significant environmental challenges such as land degradation, pollution, and loss of biodiversity This empirical study investigates sustainable development practices among publicly-listed companies in Sri Lanka, highlighting the extent and nature of these practices and their potential drivers, particularly through key performance indicators The findings reveal a predominant emphasis on social indicators, even as the country struggles with its poor environmental performance.
The economic context significantly influences sustainability reporting in Sri Lanka, highlighting its importance for policymakers As foreign investment trends rise, firms may face increased pressure to adhere to global environmental standards and guidelines.
- Extent and nature of sustainability reporting
The initial phase of this study involved a descriptive analysis of sustainability reporting among 60 companies, revealing that 55% (33 companies) reported on sustainability through separate reports, disclosures, or within their annual reports The annual report emerged as the primary medium for sustainability reporting in Sri Lanka, with most data also reflected in any website disclosures Notably, among the 33 reporting companies, only five were first-time reporters, while the remaining had reported on sustainability in at least one prior year.
Among the top 30 companies by market capitalization, 87% (26 companies) actively report on sustainability through various disclosures While two of these companies are subsidiaries of larger multinationals, Nestle Global and Carlsberg Group, supplementary research indicates that sustainability reporting is conducted at the group level for both Notably, two companies did not include any sustainability information in their annual reports or websites An average sustainability score was calculated for the top 30 companies.
Among the top 30 companies, nine exclusively included sustainability disclosures in their annual reports, while all seven of the bottom 30 companies that addressed sustainability did so solely within their annual reports, without separate documents When compiled, the sustainability disclosures in these reports ranged from one to two pages, covering one or two aspects of sustainability and engaging two to three key stakeholder groups, mainly shareholders, employees, and the local community Additionally, these disclosures provided a brief overview of the companies' commitments and strategies regarding sustainability.
- Extent and nature of sustainability key performance indicators reporting (KPI)
The second phase of the analysis comprised consideration of the specific KPI reporting
Among the 33 companies that provided sustainability disclosures or reports, 13 (39%) adhered to GRI guidelines and indicated an application level, covering key performance indicators (KPIs) across all three dimensions of sustainability These companies exclusively reported fully on indicators, which entails addressing all relevant facets, thereby ensuring consistency in data compilation and analysis In contrast, some companies reported indicators partially without specifying the omitted facets For example, Dialog Axiata PLC partially reported on LA13, which details the composition of governance bodies and the breakdown of employees by gender, age group, and other diversity indicators, but failed to include information on minority group membership.
Over half (55%) of the companies reporting Key Performance Indicators (KPIs) are from the banking, finance, and insurance sectors, while more than one third (38%) belong to the diversified holdings sector Additionally, 17% of the companies are involved in the beverage, food, and tobacco industries.
The manufacturing and telecommunication industries dominate the landscape, with 10% of companies represented from the travel sector This distribution suggests that the social and economic Key Performance Indicators (KPIs) reported are likely influenced by the specific industries of the 13 companies Consequently, indicators related to employment, human rights, product and service responsibility, and social responsibility are deemed more pertinent to these companies compared to environmental indicators.
1.3.2.2 Situation of Turkey Following Cemil Kuzey Ali Uyar, the purpose of this study is to investigate the factors that impact Global Reporting Initiative-based sustainability reporting, the adoption of assurance statements in sustainability reports, and the application levels of sustainability reports Moreover, the paper examines whether sustainability reporting is value relevant or not based upon the sample provided by 297 Turkish publicly traded companies at the Borsa Istanbul The findings revealed a growing awareness of Global Reporting Initiative -based sustainability reporting among the investigated corporations, and an improving trend in report quality; however, having sustainability reports assured by an independent verifier is not widespread among them Using the basis of ten formulated hypotheses, the empirical evidence yielded significant results, which explain the driving factors behind sustainability reporting Moreover, the results confirmed that sustainability reporting is value relevant
The situation of Sustainability Reporting in Vietnam
Set of standards affecting the Sustainability Reporting
In Vietnam, the Circular 155/2015/TT-BTC, issued by the Ministry of Finance on October 6, 2015, is the primary legal framework mandating the disclosure of sustainable development information for listed companies While compliance with this circular is compulsory, businesses have the option to adopt the Global Reporting Initiative (GRI) standards, which are voluntary.
In Vietnam, the GRI Standard is translated into Vietnamese in 2017 but implementation not mandatory
According to Circular 155 regulations on information disclosure for listed companies, there is compulsory to present some information about Sustainability Reporting
In addition, there are some contests Sustainability reports In 2016, there are 99 listed companies announced voluntary Sustainability Reporting
The Global Reporting Initiative (GRI) is an independent international organization dedicated to sustainability reporting It assists organizations in disclosing their economic, environmental, and social impacts to promote sustainable development GRI standards are recognized and utilized by over 10,000 organizations across 39 industries in 110 countries worldwide.
Mr Pham Hong, Vice President of the State Security Commission of Vietnam, emphasized that investors prioritize policies, environmental activities, and corporate governance as key factors in determining a company's long-term value He highlighted the importance of publishing information on sustainable development to enhance company value and attract strategic investors The State Security Commission has introduced Circular 155/TT-BTC, which provides guidelines for information disclosure on the stock market, including ESG data in annual reports Mr Son reaffirmed the Commission's commitment to advancing sustainable development through concrete actions for enterprises in the near future.
The development in Vietnam
In Vietnam, numerous companies, including Bao Viet Holdings (BVH), Vinamilk (VNM), DHG Pharmaceutical Joint-Stock Company (DHG), PV Drilling (PVD), HAGL Agrico (HNG), and Heineken Vietnam Brewery Limited Company, have proactively published sustainability reports despite the absence of regulatory requirements for such disclosures.
Since 2013, despite the absence of formal regulations, the Ho Chi Minh Stock Exchange (HSX), in collaboration with Vietnam Investment Review and Dragon Capital Corporation, has initiated a voting contest to promote sustainability reporting This award aims to encourage corporations to engage in studying and preparing their sustainability reports, fostering greater interest in sustainable practices.
Companies recognized for their sustainability reporting have gained public support and increased investor trust These reports serve as valuable resources for others looking to develop their own sustainability initiatives.
For examples, there are some companies who are applying the sustainability report in Vietnam
Vinamilk (VNM) made a separate Sustainability Reporting with the Annual Report The Sustainability Reporting is prepared to apply with the GRI, Guideline G4 on food production
The report highlights Vinamilk's performance and achievements in 2015, outlines its commitment to sustainable development in the coming years, and emphasizes the company's dedication to providing accurate and reliable information to stakeholders and the public.
Vietnam Dairy Products (VNM) has successfully offered a comprehensive overview of the environmental, social, and economic challenges and opportunities associated with its production and business activities, presenting this information in a clear and credible manner.
The report emphasizes that sustainable development is a core component of the Company's business strategy It highlights the Company's evaluation of the 17 United Nations Sustainable Development Goals and the development of targeted action strategies focused on people, products, and nature This comprehensive approach lays a strong foundation for effective sustainable planning and implementation.
The report adheres to the G4 GRI standard and includes specific announcements for the food processing industry, ensuring comprehensive coverage of sustainable development aspects relevant to VNM's business model.
VNM has consistently demonstrated a high level of reliability and credibility in its reporting, supported by a robust management system aligned with international production standards and certifications, including OHSAS 18001, FSSC 22000, Global GAP, ISO 9001, and ISO 17025 By 2017, it is estimated that all 13 plants will meet OHSAS 18001 standards Furthermore, VNM has achieved US FDA Certification for five of its milk production facilities, with one factory compliant with Organic EU standards This year, the reliability of VNM's reporting is further strengthened by the assurance provided by PwC Vietnam.
The report provides clear indicators that effectively highlight the key sustainability aspects of the manufacturing enterprise Notably, it outlines performance targets aimed at reducing emissions and addresses the rise in hazardous waste generated from the replacement of batteries and engine oil during the overhaul period of the self-propelled vehicle system at Milk Factory Vietnam.
The report highlights key indicators, including overall energy consumption and average energy use per ton of product (MJ/ton), which showed a downward trend in production for 2016 However, energy consumption in breeding increased without explanation To enhance the report, a detailed analysis of the volatility of these indicators in relation to company performance and the establishment of specific future targets would be beneficial.
The report showcases vibrant colors that align with the "Clean production, green breeding" theme, effectively utilizing tables, charts, and illustrations to present information in a clear and concise manner, enhancing the overall richness of VNM's report.
Continuing to go through many years, the Bao Viet Holdings (BVH) report has become one of the longest reports of the Vietnam stock market
BVH's Sustainability Report marks a significant milestone as the first to implement the International Standards for Sustainable Development Reporting (GRI 2016) Released in October 2016, this report sets a new benchmark for transparency and accountability in sustainability practices, even though compliance is not required until July.
The early adoption of sustainability practices has significantly contributed to the doubling of the thickness of the BVH report since 2015, surpassing the second longest sustainability report However, this rapid expansion also highlights a major weakness for BVH this year.
The report, while lengthy, maintains a clear and systematic structure, with specific references to GRI standards included at the end and in the content section, ensuring high levels of compliance.
The report could benefit from simplification by reducing overly detailed or theoretical sections, allowing for a more concise focus on sustainable development issues For instance, it should emphasize how achieving sustainable development targets impacts the remuneration of the Board of Directors and the board's role in this process.
Conclusion and Recommendations
Conclusions
Sustainability reporting is increasingly recognized as a global trend, enabling businesses to build trust with stakeholders, investors, and the community This practice not only improves risk management but also guides companies towards sustainable development.
In Vietnam, the current approach to Sustainability Reporting relies on government encouragement and business awareness of its importance The absence of enforcement alleviates pressure on companies, allowing them the necessary time to adapt to the practices of developing and disclosing Sustainability Reports.
In addition, in order to have a good Sustainability Reporting about quality, the developer must ensure at least the three following information:
Firstly, Sustainability Reporting needs to point out the main activities of enterprise having impact on environment, society
Manufacturing enterprises can easily identify their environmental and social impacts, while stock and fund management companies face challenges in defining their influence, as their activities do not directly contribute to pollution.
Secondly, Sustainability Reporting must show how the corporates perform to protect the environment, protect workers’ right and assure inherent benefit of company throughout operations
Sustainable practices in stock and management fund companies include actions such as turning off unnecessary electrical devices and conserving water by shutting off taps after use Manufacturing firms contribute to environmental protection by adhering to waste disposal standards and environmental indicators Additionally, many companies support education by providing scholarships and sponsorships to academically deserving students from challenging backgrounds.
Corporate governance plays a crucial role in shaping long-term policies that prioritize employee benefits, environmental protection, and economic sustainability Companies must focus on establishing practices that ensure these values are integrated into their operations for lasting success.
Mr Vu Chi Dung, the Chief of International Cooperation at the State Security Commission, emphasized key aspects of sustainability reporting that enterprises must focus on during his discussion with Huu Dạo.
Research indicates a positive correlation between Sustainability Reporting and the performance and profitability of businesses Insufficient information on Sustainability Reporting can lead to missed opportunities and deter investments from both domestic and foreign investors Therefore, implementing Sustainability Reporting is essential for attracting investments and securing sponsorships.
The introduction of Sustainability Reporting offers significant advantages for businesses, employees, and the environment By improving the transparency of both financial and non-financial information, companies can attract investments, as investors increasingly prioritize sustainability alongside traditional financial metrics.
3.1.2 Challenges in application Sustainability Reporting
Sustainability Reporting in Vietnam is still in its early stages and lacks robust development Businesses encounter numerous challenges in implementing these reports, primarily due to a scarcity of reference materials and a shortage of specialized resources needed for effective reporting.
Businesses are increasingly challenged by the growing demands for high-quality information in their reports, while also needing to ensure that their sustainability disclosures are free from fraud.
Because of the trend of the world and the real value that Sustainability Reporting brings, the rapid development of this report in Vietnam is inevitable in the future
Sustainability reporting is increasingly recognized as a global practice that enhances collaboration between businesses and their stakeholders, investors, and communities It also improves risk management and overall business viability In Vietnam, however, there is currently no legislation governing the construction of sustainability reports, leading to an emphasis on encouraging voluntary implementation This approach aims to alleviate pressure on businesses while fostering a culture of sustainability reporting awareness and practice.
Research indicates a significant link between Sustainability Reporting and the performance and profitability of businesses Insufficient information on Sustainability Reporting may hinder access to business opportunities and deter responsible investors, making it essential for companies to adopt these practices for successful participation in international economic integration.
Research indicates a significant link between Sustainability Reporting and the performance and profitability of businesses Insufficient information on Sustainability Reporting can hinder opportunities and deter responsible investors, making it essential for companies aiming for international economic integration.
The introduction of Sustainability Reporting offers significant advantages for businesses, employees, the environment, and investors By enhancing transparency in both financial and non-financial information, companies can attract more investments This practice not only secures the value and rights of workers but also promotes a more sustainable environment Furthermore, investors are increasingly interested in the activities and information of the companies they invest in Ultimately, Sustainability Reporting fosters a holistic approach to sustainability, benefiting individuals, organizations, the environment, and society as a whole.
Improving the quality of sustainability reporting enhances a company's sustainable value by shifting focus from solely financial data to include non-financial information This approach emphasizes sustainable indicators that ensure development while balancing corporate interests with societal benefits, ultimately reducing the negative environmental impacts of economic activities.
Recommendation in Vietnam
To ensure the accuracy of Sustainability Reporting in Vietnam, it is essential to enhance auditing and management practices Currently, the development of assurance for these reports is limited, primarily dominated by the Big Four firms, while small and medium enterprises have yet to make significant progress in this area.
Sustainability reporting is increasingly recognized as a valuable non-financial asset by economics experts; however, many Vietnamese enterprises find the process relatively new To ensure that sustainability reports are produced with the highest quality and become commonplace, businesses must understand the critical importance of sustainable development and the role of sustainability reporting.
Despite progress, many businesses still struggle to effectively integrate sustainable development into their strategies, often lacking specific targets and long-term plans This gap is compounded by insufficient analysis of sustainability's implications and outcomes, as well as the absence of reward mechanisms tied to sustainable practices Addressing these shortcomings could significantly improve the quality of sustainability reporting, better prepare enterprises for regional and global market integration.
Sustainability reporting from well-governed traditional enterprises like Vinamilk, Bao Viet Corporation, and DHG serves as valuable examples for others to follow Enhancing the sustainability reporting process benefits stakeholders, the corporation, and contributes positively to the economy, environment, and society.
The implementation of specific regulations and guidelines tailored to Vietnam's economic characteristics is essential for enhancing Sustainability Reporting These advisory services will support businesses in establishing effective Sustainability Reporting practices, ultimately improving the quality, transparency, and trust in their relationships This, in turn, fosters investor confidence in their investments within these businesses.
For enterprises to achieve stable and growing profits, they must prioritize sustainable development in both environmental and social aspects Many Vietnamese businesses require guidance and detailed consultation on sustainability reporting It is essential for the Vietnamese business community to utilize the GRI framework for Sustainability Reporting to enhance their practices and ensure effective communication of their sustainability efforts.
Government need enact specific standards, codes, policies that reasonable with economic situation in Vietnam because currently, the amount of standards is limited, the content is not specified
The government has introduced incentive policies to attract foreign investors; however, some companies exploit these policies to enhance profits while neglecting their social responsibilities To address this issue, it is crucial for the government to identify businesses that violate social responsibility standards and to impose strict penalties on them.
To enhance the reliability of information and mitigate fraud risk in sustainability reporting, the author emphasizes the critical need for developing Assurance for Sustainability Reporting services.
Assurance service aims to provide assurance about information declaring in Sustainability Reporting fairly and truly
In Independent auditing engagements, auditors need gather assurance of Board of Director not only information about Financial Statements but also social responsibility
Financial auditing must expand its scope to include the assessment of social responsibility and its impact on financial statements This involves evaluating the potential for fines arising from violations of labor and tax laws, highlighting the importance of compliance in maintaining accurate financial reporting.
Businesses need strengthen training programs about human resource specializing in setting up Sustainability Reporting
Businesses should actively seek investments from investors to secure sufficient funding for environmental protection initiatives while also prioritizing the well-being of their employees.
3.2.4 Advisory services for Sustainability Reporting
The implementation of specific regulations and guidelines tailored to Vietnam's economic characteristics is essential for enhancing Sustainability Reporting Advisory Services for Sustainability Reporting will aid businesses in establishing effective reporting practices, thereby improving the quality and transparency of their communications This, in turn, fosters trust among stakeholders, particularly boosting investor confidence in their investments within these businesses.
Advisory services is to advise, assist organizations in setting up Sustainability Reporting
Investors should pay more attention to using information, from financial information to non – financial information to make decisions right
Investors should invest on organizations using Sustainability Reporting other than investing on organizations only focusing on benefits and breaking the sustainability indicators
Sustainability reporting is essential for investors as it helps mitigate future risks and prevents investments in organizations that may face lawsuits related to environmental protection violations.
Sustainability reporting plays a crucial role in integrated reporting, which goes beyond merely combining annual, sustainability, and financial reports It focuses on innovatively integrating information to consistently convey how a business creates value To develop an effective integrated report, businesses must engage with stakeholders, particularly investors, to identify key issues that impact them Consequently, constructing a comprehensive integrated report necessitates the establishment of a robust sustainability report.
Integrated reporting combines comprehensive quantitative data across financial, managerial, environmental, and social dimensions to offer a holistic view of a business's operations This approach serves as a vital tool for businesses to effectively engage and communicate with stakeholders about their strategies, resource utilization, and value creation Key components of the integrated reporting model include strategy and resource allocation, external and organizational overview, business model, governance, opportunities and risks, and activity prospects.
Creating a fully integrated report fosters investor trust and positively impacts a company's stock price Unlike traditional annual reports, which primarily emphasize past and present activities, integrated reporting offers a forward-looking perspective that appeals to investors focused on future business potential.
In other words, the integrated report provides the reader with not only information about the current business activity, but also the prospects for the enterprise with a longer-term perspective