Các chiến lược hỗ trợ của Ngân hàng Công nghiệp Hàn Quốc về Trách nhiệm Xã hội của Doanh nghiệp Tập trung vào các công ty Hàn Quốc trong ngành sản xuất ở Việt Nam
Rationale
In today's competitive global landscape, corporations are expanding into international markets, fueling consumer interest in these global entities Corporate Social Responsibility (CSR) initiatives are crucial for success in new locales, as they go beyond profit-driven endeavors to adhere to domestic and international laws, ethical standards, and cater to diverse stakeholder needs The growing demand for CSR, driven by increasing consumption patterns and ethical consumerism awareness, highlights its importance for sustainable growth and regional development As global corporations enter local markets, maintaining a 'good company' reputation through CSR is pivotal to their viability, positioning CSR as integral to a company's long-term success.
In 1987, Vietnam's introduction of the Foreign Investment Law marked a pivotal strategy to attract foreign capital, driving substantial economic growth and diverse development policies However, the country's economic landscape continues to face challenges, including market management deficiencies that contribute to income disparity, labor rights issues, environmental concerns, and educational inequalities This has led to a growing consumer interest in Corporate Social Responsibility (CSR) initiatives, making CSR management a crucial strategy for many international firms operating in Vietnam Since 2014, South Korea has emerged as the leading nation in Foreign Direct Investment (FDI) in Vietnam, bolstered by major investments from conglomerates like Samsung and LG.
Vietnam's export sector and employment have significantly benefited from Korean investments, supporting around 700,000 jobs Consequently, corporate social responsibility (CSR) management has become essential for Korean companies in Vietnam Nonetheless, the adoption of CSR practices faces challenges, particularly due to the costs involved, which lead to delays for many firms In this scenario, financial institutions are crucial in alleviating these financial obstacles and facilitating the successful implementation of CSR initiatives.
This study explores Vietnam's economy and corporate landscape, focusing on the current state of Corporate Social Responsibility (CSR) management among companies It also evaluates the Industrial Bank of Korea's (IBK) strategies for enhancing CSR practices among Korean firms operating in Vietnam The financial support strategies proposed are applicable to all companies in Vietnam, not just Korean entrants, with the ultimate goal of boosting the competitiveness of financial institutions in the country and facilitating the expansion of their business networks.
Literature Review
Research by Wook Bin Leam (2019) indicates that companies engaging in corporate social responsibility (CSR) activities experience long-term benefits, including enhanced corporate image and reduced stakeholder conflicts These findings underscore the role of CSR in boosting corporate value By utilizing a broader sample and detailed analysis, the study reinforces the significance of CSR initiatives and offers valuable insights for stakeholders.
A study by Dongphil Chun et al (2020) investigated the impact of Corporate Social Responsibility (CSR) activities on management performance, focusing on the growth stages of venture companies Utilizing Data Envelopment Analysis (DEA), the research categorized the growth stages of Korean venture firms and analyzed how CSR activities influence management performance at each stage.
The analysis revealed that corporate social responsibility (CSR) activities do not influence management performance during the start-up and early growth phases However, companies engaged in active CSR initiatives during the high growth period demonstrate superior management performance compared to those that do not Interestingly, the scale efficiency of venture companies during the high growth phase was found to be optimal when they refrained from CSR activities.
Horim Choi (2019) emphasizes that effective CSR implementation in Vietnam necessitates collaboration among various stakeholders, including the government, local communities, and foreign-invested companies He advocates for enhancing the national legal framework to encourage CSR adherence and discourage companies from evading social responsibilities Additionally, he highlights the importance of fostering international cooperation through updated regulations and laws, integrating CSR into university curricula, and improving workplace environments Companies are also urged to cultivate a deeper understanding of CSR and prioritize long-term sustainable development.
A study by Woon-Seok Suh (2015) on CSR management of Korean companies entering Vietnam highlighted the impact of social contribution activities on brand trust and purchase intentions among young Vietnamese consumers It was found that positive social contributions by foreign companies can enhance their brand image; however, inappropriate activities may harm not only the individual company's reputation but also the overall image of Korean businesses in Vietnam, potentially hindering market development and local operations.
Hyun-sun Sung (2017) revealed that economic CSR activities enhance corporate image and relationship centrality, while legal and ethical CSR activities positively influence relationship centrality without significantly impacting corporate image Charitable CSR and community contribution activities improve corporate image but do not affect relationship centrality Furthermore, the study found that the enhancement of corporate image and relationship centrality through CSR initiatives positively influences the non-financial performance of companies.
This study examines the corporate social responsibility (CSR) management of Korean companies operating in Vietnam, focusing on financial support strategies to enhance their CSR efforts The proposed strategies are relevant not only for current Korean businesses in Vietnam but also for future entrants and other foreign global companies By establishing a financial framework for CSR, this research aims to facilitate long-term sustainable growth for global companies in the dynamic Vietnamese economy.
Aims of Research
This paper examines the support strategies of IBK for financial institutions in enhancing CSR management among Korean manufacturing companies in Vietnam The analysis seeks to address social challenges in Vietnam while boosting the competitiveness of these companies Ultimately, IBK aims for mutual growth through its financial support initiatives, aligning corporate responsibility with sustainable development.
- Reviewing the importance of CSR management and its impact on the Vietnamese industry
- An Analysis of CSR Challenges and Financial Difficulties Faced by Companies
- Propose a strategy of IBK to support financial assistance for CSR management of Korean manufacturing companies in the Vietnamese market
Objects of Research
This research primarily targets Korean manufacturing companies operating in Vietnam that are either currently involved in or could potentially benefit from CSR support strategies implemented by the IBK The study specifically examines key areas to clearly define its research focus.
Korean manufacturing companies in Vietnam are increasingly recognized for their commitment to Corporate Social Responsibility (CSR), particularly those that have received support from the Industrial Bank of Korea (IBK) or are potential candidates for such assistance These companies span a diverse array of industries, including electronics, automotive, textiles, and consumer goods manufacturing, highlighting the significant role of Korean enterprises in promoting sustainable practices within Vietnam's manufacturing sector.
Companies can adopt a range of Corporate Social Responsibility (CSR) programs, including environmental sustainability initiatives, community engagement and development efforts, employee welfare programs, and governance practices that promote corporate accountability and transparency These diverse CSR strategies not only enhance a company's reputation but also contribute positively to society and the environment.
IBK actively promotes corporate social responsibility (CSR) among Korean manufacturing companies in Vietnam through a variety of support mechanisms, policies, and strategies These include financial assistance, consultancy services, training programs, and networking opportunities, all designed to help integrate CSR into the core strategies of these companies By facilitating these initiatives, IBK fosters a sustainable business environment that encourages responsible practices within the manufacturing sector.
The investigation into the impacts and outcomes of Corporate Social Responsibility (CSR) initiatives reveals significant benefits for companies, local communities in Vietnam, and the broader societal and environmental landscape Direct advantages include enhanced company reputation and greater employee satisfaction, while indirect benefits encompass improved community well-being and efforts towards environmental preservation.
This research analyzes the role of the Industrial Bank of Korea in promoting Corporate Social Responsibility (CSR) initiatives among Korean manufacturing firms in Vietnam, emphasizing the associated benefits, challenges, and opportunities for future growth.
Scope of Research
This study focuses on the following scopes to successfully carry out research on the main aims and objectives:
- Country and space: Global companies and Korean manufacturing companies operating in Vietnam
- Time: When and types of data are released: It utilizes research papers, research reports, statistical data, cases and newspaper articles prepared and produced from 2016 to 2024.
Research Methodology
This dissertation utilized a diverse data collection strategy to achieve a comprehensive understanding of the subject It included an extensive review of scholarly articles, white papers, and industry-specific case studies to establish a theoretical framework Additionally, systematic information extraction from government databases, industry reports, and official corporate disclosures provided insights into firms' CSR practices For the quantitative analysis, advanced analytics were applied to datasets sourced from reputable databases, such as national statistical repositories and market intelligence platforms.
To gain qualitative insights into Corporate Social Responsibility (CSR) implementation, semi-structured interviews were carried out with a targeted group of 65 executives and managers from Korean companies operating in Vietnam Due to constraints in resources and time, the study had a limited sample size, highlighting the need for further research with a larger participant pool to deepen understanding of CSR practices in this context.
To enhance objectivity in the study, efforts were made to ensure that the interviewees, though few in number, possessed relevant experience in financial and manufacturing practices This aimed to bolster the reliability of the survey results Acknowledging the limitations, the author diligently sought to yield credible findings and intends to reinforce the study's validity through interpretation and discussion of the results The interactions offered valuable insights, enriching the empirical analysis Additionally, to triangulate the findings, an examination of media publications, press releases, and corporate social media communications was conducted to identify prevalent narratives and public disclosures regarding CSR initiatives.
The research methodology was enhanced by observational studies and participatory notes gathered during visits to specific Korean manufacturing units in Vietnam, offering essential context for the practical application of CSR initiatives Additionally, the survey tool utilized for collecting firsthand data comprised structured questionnaires and informal discussions, resulting in a comprehensive and well-founded overview of the current state of CSR within these organizations.
Thesis Structure
This paper consists of three chapters
Chapter 1 examines the basic concept of CSR management, the adoption of CSR by companies, and global CSR trends
Chapter 2 delves into Vietnam's economic and social landscape, highlighting key trends in Corporate Social Responsibility (CSR) management It provides an analysis of Vietnam's economic and corporate environment, while also detailing the unique characteristics of Korean manufacturing companies operating in the country Furthermore, the chapter addresses prevalent social issues in Vietnam and explores the role of CSR in addressing these challenges.
8 management strategies global companies are currently implementing and what difficulties they must solve them
Chapter 3 outlines IBK's action plans to enhance CSR initiatives for Korean manufacturing firms operating in Vietnam, aligning with the bank's support strategy It evaluates CSR management strategies utilizing IFE, EFE, and TOWS analyses The chapter identifies effective CSR financial support strategies tailored for the Vietnamese market Additionally, it incorporates insights from a direct survey assessing the CSR activities and awareness among employees of Korean manufacturing companies in Vietnam.
In summary, IBK's financial support strategy is designed to enable Korean manufacturing companies to effectively implement CSR management within Vietnam's rapidly expanding economy This document serves as a valuable study, encapsulating the author's insights and providing a comprehensive overview of the subject.
BASIC THEORY ON SUPPORT STRATEGY AND CSR
Concept and Origin of CSR Management
Long-term growth is essential for companies of all sizes and industries, with many leveraging Corporate Social Responsibility (CSR) as a key strategy CSR represents a management philosophy that encourages businesses to assess their impact on society and the environment while actively contributing to positive change It involves taking responsibility for societal and environmental concerns beyond mere profit-making, aligning with the concept of corporate citizenship Peter F Drucker (1984) described CSR as a process that transforms social challenges into economic opportunities, highlighting the dual importance of addressing social issues and generating economic value This core principle of CSR underscores the integration of social problem-solving with economic growth.
In 1991, the "CSR Pyramid Model" was introduced, outlining corporate social responsibility in four key stages: economic responsibility, legal responsibility, ethical responsibility, and philanthropic responsibility This model encapsulates the multifaceted nature of CSR and illustrates the progression of fulfilling social responsibilities across different levels.
The concept of Corporate Social Responsibility (CSR) originated in the 19th century, characterized by a rise in corporate donations during the 'time of charitable activities' from the 1800s to the early 1950s Despite this increase, companies primarily prioritized profit over social responsibility However, in the 1950s, a shift occurred as businesses began to acknowledge their responsibilities towards social and environmental issues, driven by growing concerns about environmental pollution, working conditions, and consumer safety that accompanied the industrial revolution This pivotal change was notably influenced by Howard Bowen in 1953.
The publication of the book "Social Responsibility of Businessman" established the author as the 'father of CSR', sparking significant interest in corporate social responsibility (CSR) within both business and academia Over time, CSR has evolved into a vital aspect of management philosophy, emphasizing ethical engagement with social and environmental issues beyond mere legal compliance Today, companies view CSR as a crucial component of their management strategy, enhancing competitiveness and reputation Additionally, stakeholders actively monitor and support CSR initiatives, influencing corporate business models and management practices.
Table 1.1 Advancement of theory and basic background of the CSR Perio d Author Changes in the definition of CSR
Duty as an entrepreneur to pursue desirable policies from the perspective of our society's goals or values and to make such decisions or follow actions
Beyond economic and legal obligations, businesses must fulfill their social responsibilities from an ethical standpoint
Research the social response of companies that actively participate in social change and social problem solving and demonstrate leadership by finding desirable social roles
11 within the dynamic social system (social responsiveness)
Economic responsibility, legal responsibility, ethical responsibility, and philanthropic responsibility are mentioned as the four components of corporate social responsibility
Corporate social responsibility is defined as a set of processes that transform social problems into economic opportunities, economic gains, production capacity, human capacity, high- paying jobs, and wealth
A company's social performance is defined as the integration of social responsibility, social response, and social issues
By establishing a CSR pyramid model and presenting corporate citizenship theory, it is argued that companies must fulfill their responsibilities as citizens in order to coexist in society
It is argued that it helps achieve social and economic goals by providing long-term benefits of corporate management activities through strategic contributions
Kotler Combine CSR with marketing to present
(2005) examples of successful companies and present the strategic importance of CSR
Proposing a strategic CSR concept by arguing that CSR should be recognized as a source of opportunity, innovation, and competition, not a concept of cost
It proposes (CSV), discovers a virtuous cycle between companies and society, creates products and markets, redefines productivity on the value chain, and studies building cooperation with industrial clusters
Emphasis on corporate role as social innovation
Source: Hye Yeong Jung; Byung Hun Choi (2016)
Corporate social responsibility (CSR) theory has primarily focused on developed markets, but recent interest in emerging economies has sparked active research on CSR in developing countries, particularly in the ASEAN region where concerns about child labor and human rights are growing CSR practices in these nations differ significantly from those in developed countries due to various factors, including religious influences, historical context, and socioeconomic and cultural differences Typically, CSR is adopted by large corporations, multinational companies, and international brands; however, current CSR norms and guidelines are often limited to specific issues or industry sectors.
Corporate investment in developing countries mainly strengthens social influence through investment, job creation, tax payment, and technology transfer,
In developed countries, the government is responsible for providing essential social services, including infrastructure, schools, hospitals, and housing Meanwhile, as the role of companies in local communities grows in importance within developing nations, embracing a stakeholder-centered integrated theory offers practical benefits.
In developing countries with higher demands for charitable responsibility, legal compliance is low, which has different priorities compared to developed countries
Wayne Visser (2007) questioned the applicability of Western-based CSR theories and concepts in developing countries, highlighting that Carroll's traditional CSR pyramid model has primarily been analyzed within the context of the United States This raises concerns about the differing priorities of legal and charitable responsibilities in various cultural settings.
Figure 1.1 CSR pyramid for advanced country and developing country>
Corporate Motives and Advantages of CSR Adoption
To enhance and maintain competitiveness, industries and companies must prioritize innovation and process improvement Hoang Dinh Phi identified 17 key factors that contribute to a firm's sustainable competitiveness, highlighting the essential elements for long-term success in a dynamic market.
The company's health can be assessed at any given moment in relation to its peers and overall competitiveness According to the firm's sustainable competitiveness pyramid, Corporate Social Responsibility (CSR) emerges as the most vital element for ensuring long-term sustainability.
Figure 1.2 Firm’s Sustainable Competitiveness Pyramid
Hyun-Seon Seong and Dae Gyo Seo (2010) highlighted in their study that genuine corporate social responsibility (CSR) efforts positively impact relationship orientation and customer loyalty, as consumers tend to perceive companies favorably Furthermore, the media extensively covers various corporate social contribution activities, leading to a growing interest among consumers and society in these initiatives Consequently, numerous companies are increasingly engaging in diverse social responsibility activities.
Companies are increasingly adopting Corporate Social Responsibility (CSR) initiatives to enhance brand awareness and cultivate a positive image, as highlighted by Gumin Kwon and Sooyoung Cho (2011) Compliance with social and environmental regulations is a key driver for CSR, as failing to meet these legal obligations can lead to civil or criminal penalties and heightened business risks Additionally, stakeholders—including customers, investors, employees, and communities—often expect companies to act responsibly By engaging in CSR, businesses can foster strong relationships with these stakeholders, thereby enhancing their reputation and trust, which ultimately contributes to improved competitiveness in the market.
Companies that prioritize CSR management can engage consumers more effectively by offering eco-friendly products and services and adhering to ethical business practices This approach not only enhances market competitiveness but also creates new market opportunities and drives profitability Ultimately, CSR is crucial for establishing and sustaining a viable business model, as it fosters long-term growth and profit generation while mitigating risks associated with environmental and social challenges.
To enhance CSR management, companies must reassess their understanding of corporate social responsibility and implement comprehensive changes to their management policies As noted by Hoang Ding Phi in his book, "Management is about coping with complex and competition for success," it is essential for corporate management to adapt to societal changes by integrating innovative management strategies for CSR initiatives (Hoang Dinh Phi, 2015) The effectiveness of these innovative management approaches can be quantitatively assessed through measurable outcomes.
The Firm's Innovation Capability (FIC) matrix serves as a comprehensive tool for evaluating a company's overall innovation abilities, assessing performance annually or over specific periods It is divided into two main sections: Section A focuses on four technological innovation capabilities—enhancing product/service quality, developing new products/services, improving product/service processes, and advancing technological systems Meanwhile, Section B addresses business innovation capabilities, which encompass leadership, management, administration, marketing, sales techniques, and customer service processes Notably, the scores in Section B are believed to significantly impact the implementation of Corporate Social Responsibility (CSR) management.
Banks and Corporate Social Responsibility
A survey conducted by "Job Korea" reveals that 43.1% of small and medium-sized enterprises (SMEs) cite budget constraints as the main barrier to implementing corporate social responsibility (CSR) initiatives, while 42.3% point to a lack of time, and 17.1% attribute the issue to differing management mindsets among CEOs Consequently, many companies tend to invest only minimally in environmental, social, and governance (ESG) values to meet regulatory requirements To motivate companies to exceed these minimum standards, it is essential to establish an incentive-driven ecosystem According to Buckley (2018), providing incentives alongside basic regulations is crucial for fostering CSR activities, and companies must also work to evolve their organizational culture Given the practical challenges in executing CSR strategies, the financial sector plays a vital role, with CSR management in financial firms generally encompassing two key areas.
Financial companies engage in Corporate Social Responsibility (CSR) through various activities, such as reducing carbon emissions, enhancing employee diversity, and collaborating with local communities They also assess the CSR levels of other companies, influencing funding decisions based on these evaluations Key CSR management strategies include improving the CSR performance of clients through corporate engagement and proxy voting, as well as developing financial products that align with investors' CSR expectations Additionally, financial firms conduct research to enhance stakeholders' understanding of CSR This study explores the strategies employed by financial companies to provide CSR financing that supports the CSR initiatives of other organizations.
Figure 1.3 CSR management of financial institutes
Source: Young-Seok Park & Hyo-Seop Lee (2021)
Support Strategy of Banks for CSR
According to Hoang Dinh Phi (Management of Innovation Concepts, Processes and Tools, (2020)) strategy is understood as a long-term plan from 5
18 years and above in which the responsible people or managers of a company/firm set up vision, concrete aims or objectives, resources, and solutions to achieve the set objectives
Banks' support strategies for CSR management are essential in promoting sustainable development and corporate ethics Telma Mendes (2021) highlights the connection between CSR, cooperation, and innovation through the triple bottom line approach, which includes social, environmental, and economic aspects The study emphasizes the importance of partnerships in enhancing a firm's innovative capabilities, showing that engaging in networks and leveraging external resources can improve innovation and competitive advantage Using partial least squares structural equation modeling (PLS-SEM), it provides empirical evidence linking CSR activities to a firm's innovative orientation, demonstrating that strong CSR practices can lead to sustainable business models and overall corporate success Darina Saxunova (2022) examines the integration of CSR within the digital transformation of financial services, focusing on how digital technologies have transformed CSR implementation and the development of CSR-aligned financial products that promote societal well-being Through qualitative analysis, the study compares historical and contemporary CSR practices, revealing the evolution and enhanced application of CSR in the digital era The findings underscore the critical role of digital technologies in advancing CSR initiatives that uphold ethical standards and foster social progress, contributing to the broader discourse on the integrity of CSR practices in evolving business environments, especially in financial services.
To enhance corporate social responsibility (CSR) initiatives, banks can implement three key strategies First, they can activate CSR-linked financial intermediation to offer favorable financial terms to companies excelling in social responsibility, thereby promoting CSR activities within the corporate ecosystem Second, by establishing robust infrastructure for measuring and evaluating CSR value, banks can enable companies to better understand and enhance their CSR performance Finally, activating market trading of CSR value allows banks to create market-based mechanisms that transform social value creation into economic value, facilitating the shift towards sustainable business models These strategies will empower companies to convert their social and environmental responsibilities into economic opportunities, fostering sustainable growth.
Finance plays a crucial role in mitigating societal risks and fostering innovation through long-term investments To enhance Corporate Social Responsibility (CSR) management, it is essential to develop a robust infrastructure for objectively measuring and fairly evaluating the value generated by CSR strategies Addressing the asymmetry of CSR information is vital to prevent resource allocation distortions; thus, a transparent certification system for major information and non-financial disclosures must be established Financial institutions should actively participate in improving CSR infrastructure by engaging in research, investment, index development, and reinforcing trustee responsibilities Additionally, creating a framework that benefits companies, investors, and the government by promoting CSR performance-linked financial intermediaries can lead to reduced financing costs for companies with strong CSR practices, enabling investors to share in the value of CSR initiatives.
The government can alleviate financial burdens by minimizing negative externalities, which necessitates tax benefits and deregulation to incentivize financial companies Additionally, promoting market transactions related to CSR management values is essential to encourage companies to enhance their CSR performance Firms that invest in CSR initiatives and successfully deliver social outcomes can profit from selling these achievements, while those facing high management uncertainty can mitigate risks through diversification.
1.4.1 Revitalization of CSR Performance-linked Financial Intermediaries
To enhance a company's CSR management, it is essential to strengthen the connection between CSR performance and financial outcomes Financial institutions can incentivize companies to improve their CSR practices by offering lower loan interest rates for those that excel in CSR performance, thereby facilitating access to funds at reduced costs CSR bonds come in various forms, allowing companies that prioritize CSR values to secure loans at more favorable rates, while those that do not comply may face interest rates comparable to or higher than standard bonds.
Figure 1.4 A scheme representing CSR performance-linked financial intermediation
Source: Young-Seok Park & Hyo-Seop Lee (2021)
As CSR projects increase, negative environmental impacts and social polarization are reduced, the government's financial burden is reduced, new
CSR-related industries are activated, and jobs can increase In this regard, various CSR performance-linked financial products are being launched around the world (Table 1.2)
Table 1.2 Examples of CSR performance-linked financial derivatives
Name of Company Contract details Contract month
SBM Offshore $1 billion/ 5-year variable rate swap
€1.1 billion / syndicated loans + interest rate swaps
Siemens Gamesa €200 million / 3-year fixed rate swap
HK$590 million / green rate swap
OCBE $85 million/2.5-year interest rate swap
ARA LOGOS $80 million / interest rate swap
Siemens Gamesa €174 MILLION / FX hedge Agreement
Olam Internationa 1-YEAR/USD-THB FX futures contract
Source: International Swaps and Derivatives Association (ISDA) (2021)
1.4.2 Improve CSR Value Measurement and Evaluation Infrastructure
To effectively invest in Corporate Social Responsibility (CSR) values, boards of directors and CEOs must objectively measure and evaluate CSR management performance Relying solely on perceived excellent CSR performance can lead to misallocation of resources, resulting in financial losses and diminished profits for investors and stakeholders The concept of Environmental, Social, and Governance (ESG) has emerged to address this issue, serving as a non-financial indicator that assesses a company's sustainability and social impact alongside financial returns However, quantifying CSR management, which encompasses non-financial aspects like environment, society, governance, and labor conditions, presents challenges due to differing investment timelines—financial returns are typically realized quickly, while social value investments yield results over a longer horizon Currently, over 300 CSR valuation standards exist globally, with MSCI leading the charge in developing these standards through its 'MSCI ESG Rating,' which evaluates ESG performance across 35 issues in 10 key areas Another prominent measure is the Dow Jones Sustainability Index (DJSI), which assesses ESG performance based on company-completed questionnaires Major CSR evaluation organizations and their methodologies are summarized in Table 1.3.
Table 1.3 Comparison of major CSR valuation agencies
- Evaluation based on public information
- Appraisee can participate in the information verification process
- Divided into 37 issues There are detailed evaluation items for each issue, but a separate request from the agency to be evaluated is required
Content-based assessment of the appraisee's answer to the questionnaire
- Weighing industry-specific criteria for specific dimensions, applying industry-specific criteria according to industry
- According to 61 industry classifications, 80 to 120 questions are conducted ESG Risk
Information can be updated before the report is published upon request by the appraisee
- Corporate Governance, Top 20 Critical ESG Issues (Industry Differences)
- At least 70 items are evaluated for each industry, but detailed evaluation items are not open to the outside
Evaluation based on public information
- Evaluate the transparency of ESG information disclosure, including energy waste, female executives, board independence, industry specific data, etc
- Evaluate 120 indicators and deduct points for missing information
Major countries, including the United States and Europe, are working to standardize key CSR value evaluation criteria to enhance corporate value and meet stakeholder expectations Social contribution certification systems are primarily categorized into three types: those led by the government, those operated jointly by the government and non-profit organizations, and those run solely by non-profit organizations Leading nations in government or joint operations include India, the United Kingdom, Germany, the United States, and Japan, all of which have implemented national-level social contribution certification systems In contrast, independent non-profit organizations, such as the Hong Kong Council of Social Service's "Caring Company" and the American non-profit B-Lab's "B-Corp," operate their own certification initiatives.
Table 1.4 Example of CSR valuation criteria
[Award for Corporate Excellence (ACE)]
Enactment of corporate law (CSR voluntariness))
Companies, public institutions, non-profit organizations
Large companies, small and medium-sized companies, mid-sized companies, venture companies
Small and medium enterprises in the jurisdiction
Small and medium enterprises in the jurisdictio n
- CSR project design, development, management
- Advice and support for social contribution linking large corporations and small and medium-sized enterprises
- Award for Corporate Excellence (ACE)
- Providing certificat ion projects and support measures
- Network seminars, etc between certified companies
A 2022 survey by the Vietnam Institute of Directors (VIOD) and PwC revealed that 80% of 234 major Vietnamese companies have plans for Corporate Social Responsibility (CSR) within the next two to four years However, only 49% of these companies have implemented an organizational system to support CSR initiatives Additionally, only 38% of executives are actively involved in CSR, with the same percentage indicating a lack of leadership in driving CSR efforts This indicates that awareness and understanding of CSR management are still limited among major Vietnamese firms, primarily due to a significant lack of relevant information and knowledge, cited by 61% of respondents.
Many companies have identified the absence of clear government regulations as a significant challenge, hindering their ability to implement Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) programs effectively Without specific guidelines tailored to their industries, organizations struggle to quantify their performance in these areas.
Table 1.5 Summary of survey results on CSR performance status of
(unit: %) Category Have Don’t have
Whether there is a CSR program
66 34 22% of cases of comprehensive program operation across all areas of CSR
Existence of a dedicated 77 23 49% of cases have a
CSR organization formal organization, while
28% operate the program as an informal organization Management's involvement in CSR
Existence of CSR- related organizational goals
Degree of establishment of CSR-related standards
59 41 28% prepare standards for monitoring CSR performance Collection of CSR- related data
29 71 34% No data collection action; 37% said data collection is required Familiarity with CSR- related data collection methods
CSR-related disclosure and provision of government data
30 70 48% do not disclose CSR- related data, 22% disclose only a small amount of data
Review of external agencies related to CSR disclosure
36 63 43% have not received external review, 20% are considering introducing external review procedures
1.4.3 Revitalizing the Market Transaction of CSR Value
A company’s primary objective is to generate profits, and its decisions are often guided by profitability By leveraging Corporate Social Responsibility (CSR) values, companies can enhance their CSR management and drive profitability To capitalize on CSR management, companies should invest in CSR initiatives that exceed regulatory requirements, allowing for more efficient distribution of CSR-related risks in financial markets Firms with elevated CSR performance can reap financial benefits, while those facing management uncertainties can mitigate risks by acquiring CSR values directly from the market.
The carbon emission trading market exemplifies the integration of Corporate Social Responsibility (CSR) into market transactions, allowing companies that successfully reduce greenhouse gas emissions to sell surplus quotas or convert them into emission permits Conversely, companies struggling to meet their reduction targets must purchase carbon credits Additionally, major countries are developing plastic value exchanges and smart grid power exchanges, while a new virtual asset has been introduced to invest in CSR-related projects aligned with the United Nations' sustainability goals To effectively promote CSR management, companies need to establish a trading market infrastructure that transforms CSR values into financial gains, enabling the efficient dispersion of CSR management risks in the financial market and alleviating the perceived burdens associated with CSR initiatives.
Figure 1.5 A schematic representing Carbon Emission Allowance Trading
In January 2022, the Vietnamese government implemented the "Agreement on Greenhouse Gas Reduction and Ozone Layer Protection" (Enforcement Decree No 06/2022/NĐ-CP) to enhance national climate change management and commit to achieving carbon neutrality by 2050 This decree outlines specific provisions for greenhouse gas reduction, ozone layer protection, and the establishment of a carbon market, as detailed in the revised Environmental Protection Act It sets forth clear goals for Vietnam to achieve by 2030, along with a phased implementation schedule.
By the end of 2027, the government will prioritize the management of carbon credits, including legislation for their exchange and carbon emission quotas A pilot implementation of a carbon emission allowance exchange and balance mechanism will be initiated in key sectors, aligning with international treaties and laws Furthermore, the establishment and pilot operation of a carbon emission trading center is set to begin in 2025, paving the way for enhanced carbon management strategies starting in 2028.
The official introduction of 30 carbon credit exchanges will enable the Vietnamese carbon credit market to connect with regional and global markets To ensure a successful establishment of these exchanges, Vietnamese financial institutions must prepare by developing carbon funds and insurance products that facilitate carbon credit transactions and guarantee the delivery of carbon credits.
Figure 1.6 Actions across seven sectors in Vietnam could result in net-zero emissions by 2050
Source: McKinSey Decarbonization Scenario Model output (2021)
ANALYSIS OF CSR MANAGEMENT OF SOUTH KOREAN
Vietnam's Economic Growth and Industrialization
Corporate social responsibility (CSR) and corporate social contributions have transitioned from optional practices to essential components for sustainable management and long-term growth This global movement transcends borders, manifesting in diverse forms across various nations Notably, Vietnam is gaining attention as it experiences rapid economic development, aligning with this worldwide trend.
Since the implementation of the Đổi Mới policy in 1986, Vietnam has seen significant economic growth, maintaining an average GDP growth rate of 6% The introduction of a new Enterprise Law by the Vietnamese National Assembly in 2005, which consolidated various existing laws, has further enhanced the investment climate for foreign companies This influx of foreign capital has positively impacted the Vietnamese economy by facilitating economic restructuring, creating job opportunities, improving labor productivity, and introducing modern technology and management practices.
Figure 2.1 GDP growth rate and per capita GDP by stage of Vietnamese reform and openness Policy
Characteristics of Vietnamese Companies
Since the introduction of the Đổi mới policy, Vietnam has focused on the development of agriculture and the development of the lagging industrial sector
Active industrialization is driving rapid changes in industrial structure, with a notable decline in the share of agriculture, forestry, and fisheries, while manufacturing is experiencing significant growth Since the early 1990s, the construction and manufacturing sectors have outpaced the agricultural sector in growth rates, leading to a marked decrease in the proportion of primary industries and a substantial increase in the construction and manufacturing industries.
In recent years, foreign investment has surged across various sectors, including primary metals, electricity, equipment, and electronic components, while also seeing significant growth in the distribution and service industries This trend is marked by larger investment scales and an increasing number of joint ventures between large corporations and small to medium-sized enterprises.
Figure 2.2 Industrial structure of Vietnam
Source: General Statics Office of Vietnam (2021)
Vietnam's manufacturing sector leads in foreign investment, benefiting from low labor costs and trade agreements like the Trans-Pacific Strategic Economic Partnership (TPP) and the ASEAN Economic Community (AEC) Out of approximately 400,000 companies in Vietnam, 63,251 are in manufacturing, representing 15.7% of the total, yet they employ 47.6% of the workforce with over 5.8 million manufacturing workers Foreign-invested companies contribute around 70% of Vietnam's exports, highlighting their crucial role in the economy The manufacturing industry is predominantly focused on light industries, such as food and beverage and textiles, which together account for 53.9% of the sector, while heavy chemical and high-tech industries remain limited In contrast, the machinery and transportation equipment sector comprises only 14.6%, although the electrical and electronics industry is experiencing steady growth.
34 growth, and continues to grow while other manufacturing sectors are shrinking or stagnating
Figure 2.3 Status of Foreign Investment in Vietnam by Major Industries
Source: Foreign Investment Agency of Vietnam (2022)
The Vietnamese industry is characterized by a significant presence of state-owned enterprises, which make up 31% of the top 100 companies, primarily in public infrastructure sectors like oil, gas, power, and communication This highlights Vietnam's commitment to enhancing its industrial infrastructure While the government is actively promoting the privatization of these enterprises to boost productivity and efficiency, foreign and private sector investment remains limited due to restrictions on stake acquisitions Additionally, the distribution and service industries, including food companies, represent 39.7% of Vietnam's GDP, underscoring their vital role in the economy.
Figure 2.4 Top 100 Vietnamese companies (a) classified by type of ownership and (b) by industry
Source: Korea Trade-Investment Promotion Agency (KoTRA) (2020)
Characteristics of Korean Companies Operating in Vietnam
Vietnam's Ministry of Planning and Investment (MPI) reports that Asian nations, including Korea, Japan, Singapore, Taiwan, and Hong Kong, are leading sources of foreign direct investment (FDI) in Vietnam Notably, Korea has consistently held the top position in FDI inflows since 2014.
Vietnam has emerged as a key destination for Korean investments, with major corporations like Samsung and LG leading the charge As of 2016, Korean-invested companies comprised approximately one-third of Vietnam's exports and created around 700,000 jobs The manufacturing sector, particularly in electrical and electronics, automotive, chemicals, and textiles, attracted 60.6% of the cumulative investment totaling $50.7 billion By 2023, around 9,000 Korean companies operated in Vietnam, with 59.3% in manufacturing, primarily concentrated in Ho Chi Minh City, Hanoi, and Binh Duong These companies typically employ over 1,000 workers and are integrated into a global supply chain, relying on headquarters in Korea or other countries for parts and raw materials Additionally, there is an increasing focus on cost management, often placing pressure on suppliers, and many firms adopt an authoritarian approach to labor relations.
Recent evaluations by the ILO, covering 257 factories in Vietnam from October 2015 to December 2016, reveal significant issues in working conditions, with over 50% non-compliance regarding compensation and working hours This highlights the pressing need for improved standards in corporate social responsibility activities, particularly in a context where management often dominates unions.
In the next two to three years, Korean companies entering Vietnam are anticipated to sustain or grow their operations A 2022 report by the Korea Institute for Industrial Economics (KIET) indicates that the service industry has a higher expansion outlook at 36.0% compared to the manufacturing industry at 29.8% However, the current status shows that the manufacturing sector is performing better, with 59.6% stability versus 51.2% in services Within manufacturing, sectors such as metal machinery (40.9%), other manufacturing (38.7%), and displays (35.3%) exhibit strong expansion potential, while textiles and clothing (11.4%) and automobiles and parts (27.3%) show limited growth prospects.
Figure 2.5 Survey on business prospects in Vietnam for the next 2~3 years
Vietnam‟s Social Issues and the Need for CSR
Despite its rapid economic growth, Vietnam faces significant instability and uncertainty, as highlighted by local experts Key weaknesses identified include the government's inefficiency, inadequate market management, a limited capacity to respond to crises, and a high level of public debt, all of which pose challenges to the country's economic stability.
Despite ongoing efforts, the persistent social gap and wealth disparity remain a significant weakness in the Vietnamese economy To address these issues, the Vietnamese government has been continually reforming institutional frameworks to protect workers' rights and interests, aiming to alleviate poverty and reduce vulnerability Key legislative milestones, including the Constitution (2013) and the Labor Act, have been instrumental in driving these reforms forward.
Since 2012, significant legislative changes, including the Social Insurance Act (2014) and the Employment Security and Health Act (2015), have been implemented to enhance the protection of workers' rights and interests Additionally, various laws, decisions, and instructions further safeguard these rights.
Table 2.1 Regulation bills for social issues in Vietnam
Bill (Date of issue) Main Content
Strategic direction for sustainable development
State-led planning program for sustainable development Resolution 1362/QG-TTg
2030 Prospects Sustainable Business Plan for the Private Sector
Environmen Act 55/2014/QH13 (23 6 Environmental Protection
Concerning natural resources and the sea and island environment
Vietnam is facing significant social challenges alongside its economic issues, particularly concerning environmental pollution Rapid economic growth has led to serious air and water pollution in major cities like Hanoi and Ho Chi Minh City, primarily due to increased traffic, factory expansion, and a rising number of vehicles This deterioration in air quality has resulted in a surge of respiratory health problems among residents Furthermore, Vietnam struggles with inadequate resources and technology to effectively address wastewater management and pollution control, highlighting the urgent need for improved infrastructure and support Additionally, deforestation driven by land development and timber harvesting is threatening ecosystems and diminishing biodiversity, which heightens the risk of natural disasters such as floods and landslides.
40 erosion, but also raises problems such as waste treatment problems and coastal pollution
2.5 Characteristics of CSR of South Korean Manufacturing Companies Operating in Vietnam
Korean enterprises are significantly enhancing their integration with local communities in Vietnam through various Corporate Social Responsibility (CSR) initiatives Before the COVID-19 pandemic, these efforts spanned multiple sectors, including healthcare, education, and environmental conservation, greatly benefiting societal welfare For example, Doosan Heavy Industries provided desalination equipment to Central Vietnam and organized extensive medical volunteer programs Meanwhile, Samsung Electronics launched educational and cultural exchange programs aimed at empowering Vietnamese women and fostering cross-cultural understanding.
During the COVID-19 pandemic, Korean corporations in Vietnam have significantly ramped up their emergency response efforts to alleviate the crisis's impact These companies have made substantial financial donations and provided essential medical supplies and protective gear Shinhan Bank Vietnam, for example, has contributed to the construction of "Love Schools" and offered scholarships to students, demonstrating its commitment to enhancing educational opportunities Collaborating with organizations like the Vietnam Fatherland Front, they have also supported national COVID-19 response initiatives These efforts have notably improved the perception of Korean companies in Vietnam, strengthening bilateral cooperation and trust between the two countries.
"Samsung Solve for Tomorrow" is a collaborative program between industry and academia aimed at nurturing future IT talent in Vietnam by enabling students to transform their ideas into reality through STEM (Science, Technology, Engineering, and Math) education.
The Samsung Talent Program aims to nurture future IT professionals in Vietnam through the Samsung Hope School initiative, which provides after-school education for underprivileged students near Samsung's business locations This program also involves collaboration with top Vietnamese universities, including the College of Technology at Hanoi National University and the Information and Communication Academy.
Figure 2.6 Example of CSR activity: Samsung
In 2022, the Hyundai Motor University Student Education Volunteer Group, known as 'H-Jump School Vietnam,' collaborated with Volunteers for Peace Vietnam (VPV) and Vietnam National University (VNU) to support underprivileged youth The initiative focused on educational guidance and mentorship, engaging 150 local university students over three years, while also offering scholarships and mentoring programs to enhance the impact of the volunteer efforts.
Figure 2.7 Example of CSR activity: Hyundai Motor
CSR Adoption and Practice by Companies in Vietnam
Vietnam's rapid development has led to various social issues, prompting companies to focus more on Corporate Social Responsibility (CSR) activities, which enhance corporate value and consumer awareness A study by Thi Lan Huong Bui (2010) analyzed the impact of CSR initiatives by Japanese, Singaporean, Taiwanese, and Korean companies in Vietnam, revealing that these activities significantly influence the national favorability of foreign companies Notably, CSR efforts from foreign-invested firms have a greater effect on national perception than the companies' own capabilities This underscores the importance of government policies that encourage and support CSR initiatives Ultimately, expanding CSR is essential for companies, as a positive national image benefits their local operations The article further reviews examples of CSR activities undertaken by companies in Vietnam.
Honda Vietnam stands as a significant player in Southeast Asia's motorcycle manufacturing sector In 2016, the company, along with its network of dealerships, enhanced its commitment to environmental protection by implementing various initiatives.
Honda Vietnam is committed to environmental protection and has obtained the ISO 14001 standard, demonstrating its dedication to sustainability The company is also actively contributing to traffic safety and environmental protection through its "I Love Vietnam" movement, which has positively impacted the country's traffic situation and raised awareness among road users This initiative has garnered high praise from the Vietnamese government and citizens, solidifying Honda Vietnam's reputation as a responsible and socially conscious brand.
Figure 2.8 Example of CSR activity: Honda Vietnam
The Vincom Center for Contemporary Arts (VCCA) plays a vital role in supporting cultural and sports sectors, attracting 300,000 visitors annually To assist marginalized communities, it has facilitated the construction of 2,700 houses and 35 km of roads, along with providing medical checkups for 330,000 individuals, financial aid for 2,200 critically ill patients, and organizing blood donation drives that collected 6,200 packs During the pandemic, the VCCA took significant measures to safeguard public health by acquiring 100 oxygen respirators, 800 COVID-19 tests, and 200,000 diagnostic kits, while also arranging special return flights for citizens stranded abroad.
Figure 2.9 Example of CSR activity: Vin group
Source: Vin group annual report (2020)
In addition, CSR activities of Vietnamese companies are summarized in (Table 2.2)
Table 2.2 Example of CSR activities in Vietnam Company CSR activities field Main contents of CSR activities
- Donation of 200 billion Dong to the poor
- An Giang Province 11 billion Dong house building event
- Donation of 20 billion Dong to the poor
- Charitable projects such as clothing support for the underprivileged
- Donation of 6 billion Dong to the poor
- Donation of 1.4 billion Dong to the poor
- “ Dam Phu My” Fund (2013)/Scholarship donation of 1.6 billion Dong/Children‟s support project
- Active contribution activities by PVFc financial affiliates
- Public medical support blood donation project
- Campaign to understand Vietnamese history and protect
- Helping disadvantaged neighbors and cancer patients, etc
Agri-bank Charitable donation - Donation of 1 billion
Dong to children‟s insurance fund
Education/Environment/Soci al Service
- BSR awarded “sustainable Green Brand”
- Scholarship delivery and scholarship projects/helping the underprivileged
- ‘ Tree planting‟ environmental project, etc Vietnam
Education/Charity Donation/Environmental Improvement
- Scholarship project/electricity supply project in remote areas
- Charity events to help disadvantaged neighbors, etc Vin group Environment/Social Project - Establishment of The
- Various charity social contribution activities
- Book donation activities, blood donation, children‟s hospital support events
Medical health Contribution Day event
- Technology education project/scholarship project for the local community
Thai Tuan Education/Charity Donation - - “Raise your dreams” event
- - “Ao Dai” donation and Teacher‟s Day event
Education - Scholarship support for students in need Bao Viet Community service/ charitable donation/education
- Preparation of sustainable development report
- Local social contribution activities/helping poor families
- Youth education scholarship project/school construction/sending winter supplies to poor families, etc Vina milk Education/Charity Donation - Send milk to children campaign
- Charity project for underprivileged children
- Children's talent development and development project
Viettel Overseas charity activities/ - International Business
- Received the Corporate Social Responsibility Award at the Stevie (R) Awards
- Support for social public service activities in Haiti, a poor country
Source: Hye Yeong Jung & Byung Hun Choi (2016)
IBK'S STRATEGY TO SUPPORT CSR MANAGEMENT OF
Strategies for Financial Support of Industrial Bank of Korea for CSR
The IBK plays a crucial role in supporting SMEs by offering tailored financial services that align with its strong corporate social responsibility (CSR) framework By integrating environmental, social, and governance (ESG) principles into its operations, IBK demonstrates its commitment to sustainable and innovative financial solutions This dedication not only strengthens the economy by empowering SMEs but also promotes a green and inclusive economic landscape.
The Industrial Bank of Korea is committed to its founding mission of supporting SMEs while implementing dedicated CSR management that aligns with core principles Striving to be recognized as 'a fundamentally reliable sustainable bank,' it incorporates CSR values throughout its operations in line with ESG objectives By actively assisting SMEs in adapting to the CSR landscape, the bank plays a vital role in fostering a sustainable society that thrives collectively.
Figure 3.1 IBK's CSR Management Policy
In August 2023, the Hai Duong Province School Facility Improvement project was launched to renovate Quyet Thang Middle School, benefiting around 600 students and 30 teachers with a funding of 19.8 million VND The project focuses on upgrading deteriorating facilities and enhancing financial and economic education to create a supportive learning environment and equitable educational opportunities Additionally, from September 1 to October 31, 2023, the Hai Duong Province School Support project, with a budget of 20 million VND, aims to further refurbish the school's facilities and provide economic resources.
51 education The initiative seeks to improve educational infrastructure for about
600 students and includes the construction of a student parking lot and distribution of school supplies to low-income students
In November 2023, Ha Giang Province's educational initiatives are focusing on Tam Son Elementary School and Bat Dai Son Middle School in the underdeveloped Quan Ba district With a sponsorship of 10 million VND out of a total project budget of 14.5 million VND, the project aims to improve the educational environment by providing IT education support, donating computers, supplying educational materials to underprivileged students, and constructing wells for sustainable water access Notably, Tam Son Elementary School was also the site of a well-digging CSR initiative in 2022, underscoring the commitment to creating lasting positive impacts through continued support.
Figure 3.2 CSR activity of IBK: 2022 well-digging
IBK is a leading provider of financial solutions specifically designed for SMEs, offering a diverse array of products and services that cater to their unique requirements The bank's innovative financing options, such as green finance and technology-based loans, promote business growth and sustainable development In addition to financial assistance, IBK also provides consulting services to support SMEs in their growth journey.
SMEs face market challenges while optimizing operations and adopting sustainable practices Services offered include management consulting, ESG integration, and digital transformation guidance Furthermore, the bank provides extensive support for SMEs through initiatives that promote industry growth and innovation IBK plays a crucial role in economic diversification and innovation by investing in venture capital, supporting start-ups, and collaborating with government programs focused on SME development.
3.2.2 Evaluation and Selection of IBK support strategy for CSR of South Korean Manufacturing Companies in Vietnam during 2025-2030
Three financial support strategies for Corporate Social Responsibility (CSR) can be implemented for Korean manufacturing companies in Vietnam: enhancing performance-linked financial intermediaries, improving CSR value measurement and evaluation infrastructure, and revitalizing the market for CSR value transactions To identify an effective CSR support strategy for companies operating in Vietnam, a survey was conducted involving 65 participants, including 16 executives and 49 employees from the Industrial Bank of Korea's branches in Hanoi and Ho Chi Minh City, as well as Korean manufacturing firms in Vietnam, focusing on their awareness of CSR management and the necessary financial support strategies.
A recent survey revealed that 57.6% of respondents identified an urgent need for financial support related to CSR performance Notably, 75% of executives echoed this sentiment, highlighting a consistent recognition among both employees and leadership of the necessity for financial backing in CSR initiatives This demand stems from the substantial budget allocations for CSR management, suggesting that companies favor direct financial support to enhance their CSR efforts.
53 high preference for measuring and evaluating CSR values, followed by activation of market transactions for CSR values
Figure 3.3 Survey results: Which of the following is the bank's support strategy that you think is most urgent?
A recent survey regarding preferred methods of CSR performance-linked financing revealed that over half of the respondents (51.5%) were unsure of their preferences Among executives, 68.75% favored fund loans and bond issuance, while 31.25% expressed uncertainty This indicates a clear distinction between executives and employees, with the latter group showing a lack of familiarity with financing options The findings suggest that while there is recognition of the need for direct financial support in CSR management, there is a significant gap in understanding specific financial support methods To enhance CSR performance-related financial support, it is crucial to improve awareness of these methods through targeted promotions and educational initiatives.
Figure 3.4 Survey results: Which method of CSR performance-linked financing is most preferred by the company you work for?
CSR performance-linked finance can enhance corporate social responsibility management, but it may face challenges in sustainability The economic benefits of such financing might not outweigh the costs associated with investing in social value, potentially leading to reduced profits for financial institutions For instance, offering CSR-related financial products at low interest rates could result in negative margin losses for these companies, especially as loan sizes increase To effectively promote CSR performance-linked finance, it is essential for the government to consider providing subsidies, tax incentives, and relaxed asset management regulations to support financial institutions.
A survey was conducted to determine the most important criteria for selecting CSR value measurement and evaluation standards among Korean manufacturing companies in Vietnam The findings revealed that 37.1% of respondents prioritized the country of establishment of the evaluation agency, followed by 34.3% who emphasized the number of companies utilizing the evaluation criteria, and 28.6% who valued the transparency of those criteria.
1) ESG bond issuance 2) ESG Fund Loan 3) I don't know
55 similar response rates, and there was no significant difference in response when comparing the two groups, executive and employee (Figure 3.5)
Figure 3.5 Survey results: What is the most important criterion for selecting CSR value measurement and evaluation criteria for Korean manufacturing companies in Vietnam?
A recent survey on carbon credits revealed a significant lack of awareness among Korean companies regarding corporate social responsibility (CSR) value market transactions in Vietnam Notably, 66.7% of respondents were unaware of Vietnam's plans to introduce a carbon emissions exchange by 2028 Furthermore, both executives and employees exhibited a high level of uncertainty, with 84.8% indicating they did not know if their companies were preparing for carbon credit transactions This highlights a concerning trend: many companies not only lack knowledge about carbon credit transactions but also show minimal interest in engaging with CSR activities in the present and future.
This suggests that the impact of Corporate Social Responsibility (CSR) is more effectively conveyed through direct consumer experiences, such as volunteering, donations, and cultural initiatives, rather than through indirect management activities like carbon emissions rights.
Figure 3.6 Survey results: (a) Do you know that Vietnam plans to introduce a carbon emissions exchange by 2028? (b) Is the company you work preparing for a carbon credit transaction?
The IFE matrix is a strategic tool used to assess a company's strengths and weaknesses in a competitive landscape Strengths highlight the competitive advantages a company holds over its rivals, while weaknesses indicate areas where it falls short This analysis aims to evaluate the competitiveness of IBK, particularly in its role supporting CSR companies.
Table 3.1 Summarized IFE for IBK’s CSR financial support
Key Internal Factors Weight Rating Weighted
1 Financial strength based on state-run banks 0.166 5 0.830
2 Having a lot of corporate customers
3 Having IBK‟s own B2B trading platform 0.166 5 0.830
1 Lack of experience in entering the
2 Low profitability following early stages of entry into the Vietnamese market 0.166 3 0.498
3 Lack of understanding of Vietnam CSR- related laws and systems 0.166 5 0.830
The Industrial Bank of Korea (IBK), established in 1961 under the Industrial Bank of Korea Act, is a state-run special bank primarily focused on supporting small and medium-sized enterprises (SMEs) in South Korea With approximately 59.5% of its shares owned by the Korean government as of 2022, IBK operates similarly to commercial banks while also providing policy financing aligned with government initiatives This enables SMEs to access loans at lower interest rates, facilitating their growth and development As a significant player in the financial sector, IBK plays a crucial role in supporting manufacturing companies in their corporate social responsibility (CSR) efforts by offering financial assistance for CSR projects By providing low-interest loans, IBK lowers the financial barriers for manufacturers, enabling them to initiate or expand their CSR initiatives effectively.