CORPORATE SUSTAINABILITY INDEX

PREFACE

The concept of “sustainable development” (SD) was popularized in environmental movements in the early 1970s. In 1987, in the “Our Common Future” Report of the of the World Commission on Environment and Development (WCED) of the United Nations, "sustainable development" was defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

The 1992 United Nations Conference on Environment and Development, informally known as the Earth Summit, held in Rio de Janeiro (Brazil) and the 2002 World Summit on Sustainable Development held in Johannesburg (South Africa) defined that “sustainable development” is a development progress with close, reasonable and balanced convergence of three pillars of development: economic development (particularly economic growth), social development (particularly social progress and justice, poverty reduction and employment) and environmental protection (particularly pollution treatment and remedy, environmental quality restoration and improvement; fire and deforestation prevention; reasonable extraction and economical use of natural resources). Sustainable development criteria are based on economic growth stability; achievement of social progress and equity; reasonable extraction and economical use of natural resources, protection and improvement of living environment quality.

The 2030 Agenda for Sustainable Development with 17 Sustainable Development Goals (SDGs) is comprised of 169 targets seeking to end poverty, fight against inequality and injustice, and combat climate change to 2030 was adopted on September 25, 2015. Specially, the agenda emphasizes the role of businesses,in addition to governments and international organizations, in delivering SDGs. 17 SDGs need the engagement ofthe business communitywhich will, in return, benefit greatly from the achievement of SDGs.According to a report by the Business and Sustainable Development Commission, integrating sustainable development into business strategies or effectively delivering 17 SDGs will help open up market opportunities worth at least US$12 trillion by 2030. This great opportunity is only for visionary businesses which soon havethe sustainable development strategy.

In a bid to provide the business community with an effective tool for management and business strategy planning, VCCI together with top-notch domestic and international experts thoroughly developed the Corporate Sustainability Index (CSI) which is designed to measure the corporate sustainability in economic, environmental and social aspects. As Vietnam’s first set of sustainability indicators integrated with international standards and practices and adapted to current Vietnamese conditions, CSI has prevailed its superiority. In addition, CSI features ease of use and high applicability to all businesses irrespective of type, scale and scope of operation. This is a useful tool for business management, helping companies to know what and where they are and pinpoint governance gaps to reduce risks or, in contrast, discern their strengths and capture potential business opportunities from there.

Scaling up the CSI scope to engage more companies to adopt the gauge, and build a solid and effective corporate governance platform is the very best way to shorten the roadmap of delivering the sustainable development agenda of the business communityin particular and the society as a whole.

TABLE OF CONTENTS

NOTES

SECTION I: COMPANY PROFILE

SECTION II: COMPANY’ ACTIVITIES TOWARDS SUSTAINABILITY

PART 1: GOVERNANCE AND STRATEGY

A.BASIC CRITERIA OF GOVERNANCE AND STRATEGY

I.Development strategy relating to sustainable development

II.Management of fields relating to sustainable development

III.Information disclosure

B.ADVANCED CRITERIA OF GOVERNANCE AND STRATEGY

PART 2: ACTIVITIES OF THE COMPANY IN THE ECONOMIC FIELD TOWARDS SUSTAINABLE DEVELOPMENT

A.BASIC CRITERIA IN THE ECONOMIC FIELD

I.Economic performance

II.Customer and consumer satisfaction

III.Anti-corruption and antitrust in business

B.ADVANCED CRITERIA IN THE ECONOMIC FIELD

PART 3: ACTIVITIES OF THE COMPANY IN THE ENVIRONMENTAL FIELD TOWARDS SUSTAINABLE DEVELOPMENT

A.BASIC CRITERIA IN THE ENVIRONMENTAL FIELD

I.Compliance with Vietnamese environmental laws

II.Pollution prevention, environmental incident remediation and environmental improvement

III.Resources conservation, greenhouse gas emission reduction and response to climate change

IV.Forest resources protection and biodiversity conservation

V.Land resources use and protection

VI.Water resources protection and use

VII.Environmental protection from air, dust, noise and vibration pollution

VIII.Mineral resources protection and use

IX.Marine resources protection

B.ADVANCED CRITERIA IN THE ENVIRONMENTAL FIELD

PART 3: ACTIVITIES OF THE COMPANY IN THE SOCIAL - LABOR FIELD TOWARDS SUSTAINABLE DEVELOPMENT

A.BASIC CRITERIA IN THE LABOR - SOCIAL FIELD

I.Employment contract

II.Training for employees, vendors/partners and community

III.Internal labor regulations

IV.Working time and time-off

V.Salary

VI.Insurance

VII.Occupational health and safety

VIII.Healthcare and welfare for employees

IX.Workplace democracy and collective bargaining agreement

X.Female employee and special employees

B.ADVANCED CRITERIA IN THE LABOR - SOCIAL FIELD

APPENDIX: LIST OF PROVIDED INFORMATION AND MATERIALS

NOTES

  1. Companies that take part in the Program on Benchmarking and Announcing Sustainable Companies 2018 (hereinafter referred to as the Program) are companies that have not infringed the law in the last three years (2015-2017) or have thoroughly addressed their previous infringements, which have beenconfirmed by competent authorities.
  1. Companies participating in the Program shall complete the CSI on their own. Indicators left blank or skipped will not be counted and scored.
  1. All indicatorsmust be proved by the Company’s documents/materials or calculations. Documentary proofs are an integral part of this CSI.
  1. Sustainable companies are assessed over a three-year period from 2015 to 2017. Information and materials submitted to the Organizing Committee must be within this period. In case there are a great many information and materials provided, they can submit remarkableinformation and documents of each year.
  1. List of related information and materials shall be listed at the end of this CSI. Companies are supposed to place a cross to the itemthey provide.
  1. The Organizing Board and the Jury will assess information accuracy by paying working visits to companies in case of necessity
  1. A full document set includes:

-Registration form filled and submitted by companies;

-Corporate Sustainability Index completed by companies;

Note: Companies can send the Registration Form and Documents in one of the two following ways:

(1)Register and submit documents via the VBCSD website: vbcsd.vn

(2)Register and submit documents by post. Related information and materials are provided in the form of hard copies or data files written on CD, DVD, USB or memory stick.Companies should number in order or clearly write information and materials in correlation with corresponding CSI criteria.

Companies are encouraged to submit information and materials online.

  1. Information and materials submitted to the Organizing Committee are kept confidential, only used for assessing corporate sustainability of companies that file such information and materials.
  1. Companies that meet provided standards will be recognized as “sustainable companies”. Best performers will be named the Top 100 most sustainable companies.
  1. Documents must be submitted to the Organizing Committee to the following address prior to July 31, 2018:

SECTION I: COMPANY PROFILE

(Please note that all of the following information is compulsory, particularly contact person)

Company name
Company type
Head office
Year of establishment
Telephone / Fax
Website / Email
Legal representative:
Full name / Position / Telephone / Email
Management Board
Full name / Position / Telephone / Email
Contact person in charge of the Program:
Full name / Position / Telephone / Email
Subsidiary companies, branches and factories
Name/Address / Position / Telephone
Main products/services / Main markets (domestic and foreign)
1. / 1.
2. / 2.
3. / 3.
4. / 4.
5. / 5.
Business result summary / 2015 / 2016 / 2017
Registered capital, million VND
Total invested capital, million VND
Gross revenue, million VND
Profit before tax, million VND
Export value, million VND (if any)
Import value, million VND (if any)
Employees(persons)
Male/female employees
Managerial staffs (persons)

(Note: Data must be extracted from audited financial statements in the two latest fiscal years)

SECTION II: COMPANY’ ACTIVITIES TOWARDS SUSTAINABILITY

PART 1: GOVERNANCE AND STRATEGY

A.BASIC CRITERIA OF GOVERNANCE AND STRATEGY

I.Development strategy relating to sustainable development
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. The Company has a development strategy
/ ☐ / ☐ / Provide development strategies in 20xx – 20xx, including the 2018 strategy
  1. The strategy of the Company includes environmental and social policy commitments
/ ☐ / ☐ / Give references to items and pages stating environmental and social commitments in development strategies
II.Management of fields relating to sustainable development
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. The Company appointedexecutives in charge of economic, environmental and social issues.
/ ☐ / ☐ / Provide organizational structure, appointment decisions, work assignments
  1. The Company has departments in charge of sustainably economic, environmental and social issues in the organizational structure.
/ ☐ / ☐ / Provide organizational structure and responsibility of relevant departments
III.Information disclosure
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. The Company reported to authorities in charge of economic, environmental and social matters.
/ ☐ / ☐ / Provide latest reports submitted to authorities (one report each matter)

B.ADVANCED CRITERIA OF GOVERNANCE AND STRATEGY

Development strategy relating to sustainable development
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. The strategy has been aligned with 17 SDGs - the 2030 Agenda of the United Nations
/ ☐ / ☐ / Provide documented development strategy for 20xx - 20xx (inclusive of 2018),with references to items and pages related to SDGs.
Management of fields relating to sustainable development
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. The Company defined, assessed and managed its impacts on economic, environmental and social issues
/ ☐ / ☐ / Provide documents that define and assess management policies on economic, environmental and social issues, recommended to refer to sections, items and pages in sustainability report if available.
  1. The Company defined all parties involving in economic, environmental and social issues.
/ ☐ / ☐ / Provide documents that define stakeholders involving in economic, environmental and social issues, recommended to refer to sections, items and pages in sustainability report if available.
  1. The Company exchanged and consulted with stakeholders interested in sustainable development.
/ ☐ / ☐ / Provide reports that consult stakeholders, recommended to refer to sections, items and pages in sustainability report if available.
  1. The Company applied advanced quality management system.
/ ☐ / ☐ / List existing quality management systems, copies of certificates required.
  1. Risk management policy was adopted by the Company.
/ ☐ / ☐ / Provide documents on risk management policy
  1. Risk management policy included all steps: Identifying, assessing, measuring, managing, monitoring and reporting key risks.
/ ☐ / ☐ / Provide risk management policy documents, recommended to refer to sections and pages in such documents.
Information disclosure
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. Make sustainability reports
/ ☐ / ☐ / Provide latest sustainability report
  1. Make sustainability reports according to international standards
/ ☐ / ☐ / Provide latest sustainability report, with references to reference standards (a reference table is recommended if any)
  1. Ensure the independence of sustainability reports
/ ☐ / ☐ / Provide latest sustainability report, with references to independence assurance pages
  1. Publicize and distributesustainability reports broadly.
/ ☐ / ☐ / Provide link to the latest sustainability report on the Company’s website or state other popular forms
  1. Have an information channel on economic, environmental and social issues for shareholders/investors/stakeholders.
/ ☐ / ☐ / Provide link to related contents on the Company’s website or provide materials and images via other popular communication forms
  1. Host shareholder meetings/conferences/workshops on sustainable development.
/ ☐ / ☐ / Provide meeting/conference/workshop materials in the last 12 months
Other governance - strategy initiatives towards sustainable development
(If there are any, please specify their names and provide relevant documents)

PART 2: ACTIVITIES OF THE COMPANY IN THE ECONOMIC FIELD TOWARDS SUSTAINABLE DEVELOPMENT

A.BASIC CRITERIA IN THE ECONOMIC FIELD

I.Economic performance
Criteria / Years implemented / Requirements or suggestions for materials provided
2015 / 2016 / 2017
  1. Return on assets (ROA) of the Company in the last three years
/ Provide financial statements of 2016 and 2017
  1. Return on equity (ROE) of the Company in the last three years
/ Provide financial statements of 2016 and 2017
  1. Social contributions of the Company in the last three years (million VND)
/ Provide integrated data extracted from governance reports (if any). Separate data from each of program
  1. Social contribution to revenue ratio in the last three years (%)
/ No reference needed - This value divided by revenue of the corresponding yearly financial statement, multiplied by 100 gives the result.
  1. Payment to the State Budget in the last three years (million VND)
/ Take from financial statements
  1. Welfare funds in the last three years (million VND)
/ Take from financial statements
  1. Welfare fund to revenue ratio in the last three years (%)
/ No reference needed - This value divided by revenue of the corresponding yearly financial statement, multiplied by 100 gives the result.
  1. Entry-level salary in the last three years (million VND/month)
/ Provide decisions on entry-level salary
  1. Average income per employee in the last three years (million VND/month)
/ Provide average income statement in 2015-2017 (recommended to refer to items and pages on annual reports and sustainability reports if available)
  1. Average income to per capita GDP in the last three years (%)
/ Self-calculated by the Company
  1. Reinvestment to earnings ratio in the last three years (%)
/ Provide management reports on retained earnings for reinvestment for the last three years
II.Customer and consumer satisfaction
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. Carry out direct customer communication measures for safer and more transparent relations with CUSTOMERS
/ ☐ / ☐ / Provide informative labels, leaflets and publications, links to websites where relevant contents are contained
  1. Carry out direct consumer communication measures for safer and more transparent relations with CONSUMERS
/ ☐ / ☐ / Provide informative labels, leaflets and publications, links to websites where relevant contents are contained
  1. Monitor and assess customer/consumer satisfaction
/ ☐ / ☐ / Provide assessment reports
  1. Complaints from customers/consumers and the time needed for resolution from the date of receipt
/ ☐ / ☐ / Provide executive report on average time of complaint settlement
III.Anti-corruption and antitrust in business
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. Carry out anti-bribery and corruption policies in the Company
/ ☐ / ☐ / Provide documents on anti-corruption policy
  1. Have such policies disseminated to all employees
/ ☐ / ☐ / Provide training materials/notices on relevant contents delivered to employees
  1. Number of corruption and bribery cases in connection with the Company were founded and settled in the past years
/ 2015 / 2016 / 2017 / Provide records concerning these cases
  1. Complaints from customers/consumers and the time needed for resolution from the date of receipt
/ ☐ / ☐ / Provide executive report on average time of complaint settlement

B.ADVANCED CRITERIA IN THE ECONOMIC FIELD

Economic performance
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. Have research and development (R&D) on products and services
/ ☐ / ☐ / Give functions and tasks of R&D Department
Criteria / Years implemented / Requirements or suggestions for materials provided
2015 / 2015 / 2015
  1. R&D to revenue ratio in the last three years (%)
/ Provide executive report on R&D expenses in the last three years
  1. Revenue of new products and services to total revenue ratio in the last three years (%)
/ Provide executive report on revenue of new products and services in the last three years
Indirect economic impact
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. The Company suffered from indirect economic impacts (e.g., increase/decrease in laborer level in the business region, economic development in underdeveloped areas, economic impact on improvement/deterioration of living environment, stimulation/reduction of foreign investment capital in the region, etc.)
/ ☐ / ☐ / Provide related assessment reports
Procurement practices
Criteria / Years implemented / Requirements or suggestions for materials provided
2015 / 2016 / 2017
  1. Ratio of input value paid to local vendors to revenue in the last three years (%)
/ Provide input cost breakdown by domestic/foreign vendors in the last three years
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. Not procure goods from vendors disrespecting laws on labor, environment, anti-corruption and antitrust
/ ☐ / ☐ / Provide related documents/notices/ policies of the Company
  1. Perform environmental and social impact assessment (inclusive of labor use) of vendors
/ ☐ / ☐ / Provide latest vendor assessment report
  1. Take part in green public procurement (GPP) chain
/ ☐ / ☐ / Provide certificate of GPP participation
  1. The Company had a fair dealing policy for vendors
/ ☐ / ☐ / Provide contracts with vendors of different scale, purchase strategy
Customer and consumer satisfaction
Criteria / Implemented by the Company / Requirements or suggestions for materials provided
Yes / No
  1. Notify CUSTOMERS of changes in product/service features
/ ☐ / ☐ / Provide related notices
  1. Notify CONSUMERS of changes in product/service features
/ ☐ / ☐ / Provide related notices
  1. Have policies on settlement of customer/consumer complaints
/ ☐ / ☐ / Provide documents concerning complaint resolution policies