[Press Release] Best listed companies in Vietnam in 2022 recognized

(Da Nang, December 2, 2022) Forty best-listed companies in Vietnam were honored for information transparency at the 15th Listed Companies Awards 2022 Ceremony held recently at the Ariyana Convention Center – Furama Resort Danang.

The event was held in conjunction with the 2022 Annual Listed Companies Conference. It saw the participation of leaders of the State Securities Commission,  leaders of two stock exchanges, the Securities Depository Center and representatives of nearly 300 listed firms, securities enterprises, fund management companies and other financial institutions in the market.

Out of 600 listed companies on both exchanges, 40 companies were awarded in three categories including Annual Report, Corporate Governance and  Sustainability Reporting.

In each category, the award organizing committee selected enterprises to award the “Outstanding Progress” prizes which aimed to recognize its efforts in ensuring information transparency.

In particular, in 2022, for the first time, the committee granted awards for enterprises that effectively ensured greenhouse gas emissions management (in the category of  Sustainability Reporting). This recognition was to encourage listed enterprises to pay attention to environmental issues and the impact of climate change, teaming up with the State to fulfill its goal of reducing net greenhouse gas emissions to zero by 2050 (See attached a list of award winners).

In terms of the Annual Report category, this year, the scoring in the preliminary round continued to be conducted by a group of independent experts from the Research and Training Center under Ho Chi Minh City University of Technology. The preliminary results were then reviewed by the top four auditing firms (Big 4) Deloitte, Ernst & Young, KPMG and PwC to ensure accuracy, objectivity and depth in the selection process. The Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange re-evaluate the results for the final time before the announcement.

The criteria for scoring were implemented according to the Ministry of Finance’s Circular No 96/2020/TT-BTC guiding the information disclosure on the stock market. Among the criteria included added information on the company’s environmental impact (total greenhouse gas emissions and measures and solutions to reduce greenhouse gas emissions).

The annual reports of winners in all three capitalization groups this year experienced significant changes compared to last year. The majority of the scores were at maximum, showing that businesses were paying greater attention to improving the quality of their reports from the form to the content layout. Their annual reports also comprised images from production and business activities, main product designs and achievements.

The annual reports in the final round this year were all evaluated as excellent, presenting complete, attractive, scientific information, and organizational structure. Enterprises had their annual reports in English. Some others also complied with GRI standards in drafting their sustainable development reports.

2022 was the year when businesses showed their ability to overcome difficulties and move forward after social distancing. The top reports produced an adequate and clear analysis of the business and financial situation, helping shareholders better grasp the firms’ financial situation, operations and governance. Notably, the annual reports of companies in the high-scoring group this year recorded some outstanding points for publishing the list of subsidiaries, the main production and business fields, and the ownership ratios.

At the same time, these reports also offered clear information about operations or financial situation, with specific audited figures of subsidiaries and affiliated companies.

In addition, they comprised risk information that might affect production and business activities, outlining the firms’ risk management activities, including risk management policies and procedures.

The number of enterprises reporting greenhouse gas emissions increased significantly compared to the previous year, with 80 disclosing information on total direct and indirect greenhouse gas emissions, compared to 37 seen in 2021. Up to 120 firms disclosured solutions to reduce greenhouse gas emissions in 2022, doubling last year’s figure.

In terms of the report content, besides financial statements with full assessment criteria, some others did not have detailed financial analysis, providing shareholders with insufficient information.

Many businesses failed to highlight their commitment to implementing corporate governance standards according to good practice and propose a plan to improve corporate governance towards good practices.

Regarding the contents related to corporate responsibility to the environment and society, 2022 recorded a significant increase in the category. However, there remained some points worth noting and needed to be improved for the annual reports in the following years.

For the Corporate Governance Category:

2022 marked the fifth anniversary of the Corporate Governance Award (CGA) within the framework of the Vietnam Listed Company Awards (VLCA).

The number of enterprises evaluated increased gradually over the years, reaching 581 in 2022. The criteria were continuously revised. After the preliminary evaluation round, 45 enterprises with the highest scores were selected for the final round.

The scores seen in the past three years demonstrated the improvement of the businesses’ corporate governance. Especially in 2022 when a large number of them were under evaluation for the awards for the first time. The number of  participating firms recorded an increase of nearly 12% to 581 in 2022 from 520 in 2021 while the average score in 2022 also saw a certain rise compared to the previous year.  

However, Vietnamese enterprises only complied with corporate governance best practices rather than applying them to their operations. The compliance level stood at 62.5-73.94% depending on capitalization, while enterprises only met 23.3-44.1% of the criteria scores according to good practice.

To meet the requirements of international investment funds, listed firms were urged to improve their corporate governance and apply advanced corporate governance practices in the region and the world.

In general, well-governed companies were better valued (higher P/B ratio). Industries with high capitalization and good governance would be the ones that attract investors. Good corporate governance would also help create operational efficiency and thereby bring business results for listed companies.

In addition to protecting the rights of shareholders, protecting the interests of stakeholders was also an important aspect of corporate governance. However, enterprises in the Vietnamese stock market paid insufficient attention to stakeholders when only a few large companies (about 20% of the Top 45 firms) made initial investments in developing and publishing the above policies.

The data from the five years of assessment showed that the average score had increased year by year. That was a testament to the efforts to improve information disclosure and increase the transparency of listed companies in Vietnam. However, the journey had only begun. To be able to shorten the gap with ASEAN countries, more businesses were urged to apply advanced international practices. Through that, the market would regain the trust of existing investors as well as build confidence for potential ones.

For the Sustainability Reporting category:

2022 marked the 10th time that Vietnamese listed companies had disclosed information on sustainable development. This was also a year that witnessed many milestones and memorable changes for sustainable development activities in Vietnam.

Disclosing information on greenhouse gas emissions in 2022 was superior to the previous year. Many businesses quickly caught up with changes in legal regulations as well as climate change trends in Vietnam and around the world.  They disclosed information on total greenhouse gas emissions in different scopes. In particular, a few businesses (such as Vinamilk) published greenhouse gas emissions in all three scopes. Most of the businesses in the top group more or less mentioned climate change programs. A few businesses had independent assurances on greenhouse gas emissions information (GRI 305 indicator).

The trend of shifting business models from a linear economy to a circular economy was becoming more and more popular. If in the last 2-3 reporting seasons, new names such as Century Fiber (code STK), Gia Lai Electricity (code GEG) and Everpia (code EVE) were only considered a phenomenon, then in this year’s reporting season, these enterprises increasingly improved themselves and ranked among the enterprises with good information disclosure on sustainable development.

Although the information disclosure on greenhouse gas emissions changed significantly compared to last year, the number of enterprises with standard information disclosure on greenhouse gas emissions was limited. In-depth analysis of greenhouse gas emission results as well as solutions and orientations on greenhouse gas emissions was also very modest.

At the same time, businesses failed to pay efficient attention to many issues raised in previous reporting seasons, including the announcement of corresponding targets for each reported indicator, analysis of implementation results throughout the years, the integration of ESG activities from strategy to planning, action and reporting and analysis of ESG activities throughout the business supply chain.

Despite these mentioned issues, the quality of information disclosure was expected to be improved in the coming years thanks to positive changes in the firms’ information disclosure of sustainable development in the 2022 reporting season and changes in policy and legal regulations.

Tran Anh Dao, Acting CEO in charge of the Board of Management of Ho Chi Minh Stock Exchange (HOSE) cum Chairwoman of the VLCA 2024 Voting Council said, said with the continuous efforts of the Organizing Committee, the award not only had a positive impact on changing the mindset of businesses in investor relations, information transparency, especially non-financial information, but also laid the foundation for HOSE to build and launch the VN Sustainability Index (VNSI) since 2017.

Dao said in the future, the award would continue to emphasize the quality of corporate governance and the trends that led the market like reducing the impact of climate change, creating a wider ripple effect in the business community.

The award organizing committee would consider adding issues that helped upgrade the market such as preparing financial reports by international standards IFRS, preparing annual reports in English, and disclosing information in English to the evaluation, Dao said.

She added that amid many fluctuations in economy, environment and society not only domestically but also internationally, the goal of ensuring sustainable business development and facilitating integration with the world community should be prioritized, she said.

The Vietnam Listed Company Awards (VLCA) evolved from the Annual Report Awards. Jointly organized by the Ho Chi Minh Stock Exchange (HoSE), the Hanoi Stock Exchange (HNX), and Dau Tu Newspaper, the VLCA is solely sponsored by Dragon Capital Vietnam Management Company.

2022 was the 15th year that the award had accompanied Vietnam’s stock market and the listed business community. The award aimed to support and encourage listed businesses to improve their professionalism, and transparency, and enhance the ability to convey information to investors, aiming for effective governance and increasingly sustainable development.

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For more information about the award, please visit the website (www.aravietnam.vn), the website of HOSE (www.hsx.vn), HNX (www.hnx.vn) or Securities Investment Newspaper (www.dtck.vn), or contact:

Ms. Tran Anh Dao

Acting CEO in charge of the Board of Management of Ho Chi Minh Stock Exchange

Tel: 08-3821 7713

Email: anhdao@hsx.vn 

 

Mr. Nguyen Hong

Deputy Editor-in-Chief

Investment Newspaper

Tel: 08-3930 5319 – 0903 684 558

Email: nguyenhong@virhcm.com.vn