[Press Release] Winners of 2023 Vietnam Listed Company Awards honored

(Cam Ranh City, Khanh Hoa, 15/12/2023) More than 50 excellent businesses were honored at the 2023 Vietnam Listed Company Awards, held at The Arena Cam Ranh in Khanh Hoa Province on December 15.

The event was held in conjunction with the 2023 Annual Listed Enterprises Conference with the participation of leaders of the State Securities Commission; leaders of two stock exchanges, the Vietnam Securities Depository and Clearing Corporation and representatives of nearly 300 listed companies, securities firms, fund management companies and other financial institutions in the market.

After nearly six months of evaluation, among nearly 600 listed companies on two  exchanges, the Judging Panel decided to award 51 excellent companies in three categories including Annual Report, Corporate Governance and Sustainability Reporting.

For the Annual Report category: 116 companies with the best annual report were selected for the final round. Thirty enterprises with the best annual reports were chosen by the Judging Panel to grant the awards. Of them, 10 were  involved in the financial industry and 20 in the non-financial industry.

This year, participating enterprises were divided into two financial and non-financial sectors, instead of scoring by capitalization as in previous years. The scoring of the Annual Report Category in the preliminary round was conducted by an independent third party, the Vietnam Institute of Directors (VIOD). The preliminary results were then reviewed by the four leading auditing companies (Big 4) namely Deloitte, Ernst & Young, KPMG and PwC to ensure accuracy, objectivity and depth in the evaluation process. The Ho Chi Minh and Hanoi stock exchanges reviewed the results one last time before publishing them.

The criteria for evaluating this year’s financial statements continued to be implemented according to Circular 96/2020/TT-BTC guiding information disclosure on the stock market. 2023 was the third year that contents related to greenhouse gas emission reduction were included in the evaluation criteria for the financial statement category.

According to the award Judging Panel, in the financial sector, 14 enterprises were large-cap while nine were medium-cap, reflecting the characteristics of this group.

Meanwhile, in the non-financial sector, 19 firms were large-cap, 40 were medium-cap, and 26 were small-cap. Therefore, in general, the evaluation results of the financial sector’s financial statement evaluation results (average of 72.65 points) were slightly higher those that of the non-financial sector (average of 68.01 points).

In terms of specific criteria, financial enterprises made more sufficient investment in form than non-financial enterprises (1.67 points higher on average) similar to their reports of the Board of Directors and corporate governance (1.74 points and 0.7 points higher on average, respectively compared to those of non-financial firms.

General information and the Board of Directors’ assessment of the company’s operations between the two sectors had the highest similarity. The biggest difference came from the annual performance related to sustainable development criteria and analysis of financial situation indicators and key financial indicators during the year.

The outstanding annual reports of financial enterprises produced a vivid, attractive and consistent picture of their annual performance. More importantly, to access international capital and finance, many enterprises in this sector systematically and transparently disclosed information about their governance model, management structure, business ecosystem, short-, medium and long-term goals, strategies and risk management.

Meanwhile, non-financial enterprises with excellent annual reports developed  their  sustainable development reports. Strategic goals and sustainable development goals in the short, medium and long term, along with the identification of key risks including environmental risks and risk management policies, were analyzed, presented and illustrated specifically.

In general, enterprises both in financial and non-financial sectors paid sufficient attention to investing and improving the quality of their annual reports and information disclosure. The awarded annual reports could also be seen as typical models that enterprises in the market could aim for.

For the Corporate Governance (CG) category: 104 enterprises with the best corporate governance were selected for the final round, divided by capitalization group. Of which, 34 enterprises were large-cap, 34 enterprises in mid-cap and 36 were small-cap. In the final round, the Judging Council selected the 28 best enterprises to present awards.

The criteria for assessing corporate governance were based on the legal regulations on corporate governance in Vietnam and good governance practices based on the G20/OECD corporate governance principles, the Vietnam Corporate Governance Code of Best Practices (VCGS), and the ASEAN Corporate Governance Scorecard.

The criteria for assessing the corporate governance category which were specifically built based on the G20/OECD corporate governance framework, focused on five principles including shareholder rights, equitable treatment of shareholders, information disclosure and transparency, board responsibilities and sustainable development. These criteria were classified into questions that complied with the provisions of the law on corporate governance and those were good practices in corporate governance that were higher than the requirements of the law.

This year, the set of CG criteria was supplemented with 18 questions, including one on organizing the general meeting of shareholders, two on nominating members of the Board of Directors to enhance diversification and 15 on sustainable development. This was considered the first step for new requirements on corporate governance amid the Government’s effort to implement its commitments on emission reduction, climate change response and sustainable development in the past two years, following its participation in the COP26 Conference.

The aspect of sustainability and resilience was an important content in the G20/OECD Principles of Corporate Governance, which were recently issued in 2023. The Judging Council said the corporate governance scores of enterprises demonstrated their increasing interest in implementing good governance activities. However, there remained a difference in the level of meeting compliance criteria.

In addition, the level of meeting compliance criteria ranged from 62.9-72.3%, depending on each capitalization group. Notably, large-cap enterprises tended to comply with the law better.  

Most enterprises met the practice criteria at a fairly low level. There remained a remarkable rate of violations of information disclosure obligations at about 18%,  showing that although enterprises were making progress in implementing corporate governance practices, they were urged to draw up specific actions for faster improvement.

The points that needed improvement were related to ensuring the rights and fair treatment of shareholders, information disclosure and transparency, the role of stakeholders besides sustainable development, and the structure and control role of the board of directors.

With important amendments and supplements according to the OECD Corporate Governance Principles, the upgraded 2023 assessment criteria showed expectations, but there remained many challenges including expectations in improving operational efficiency, creating breakthroughs in long-term sustainable development, challenges in the gap between practice and law and voluntary commitment to implementation.

For the Sustainability Reporting category: Experts from the Association of Chartered Certified Accountants (ACCA) would score separate sustainable development reports and annual reports with high scores in environmental and social content in the final round.

This year, the Judging Council continued to maintain the scoring criteria related to greenhouse gas reduction. This was the basis for awarding listed enterprises that ensured effective greenhouse gas emissions management, encouraging the firms to raise awareness and pay more attention to environmental issues and the impacts of climate change, joining hands for the common goal of Vietnam in its commitment to reduce net greenhouse gas emissions to zero by 2050. The council said that in the 2023 reporting season, enterprises showed many improvements in applying good practices with large-cap enterprises dominiated.

In the 2022-23 period, institutional investors asked companies they invested in to take ESG practices more seriously. The sustainability reporting voting group made some updates to the criteria to ensure that the big trends were updated. They included improving the quality of greenhouse gas emissions disclosure. Accordingly, companies that disclosed greenhouse gas emissions information by international standards such as the IS GHG Protocol would receive higher  scores.

Companies that wanted to have higher scocres were required to disclose at least 50% of quantitative information according to GRI’s general guidelines and specialized guidelines. The voting panel also appreciated enterprises that used more than one disclosure standard, especially disclosure standards/frameworks widely used by investors like TCFD and ISSB.

The voting panel also tightened the evaluation of third-party assurances provided. Accordingly, the quality of assurances provided would be evaluated according to criteria such as the percentage of guaranteed indicators, scope of assurance, and assurance implementation standards.

Overall, the number of companies that prepared separate  sustainable development reports this year and entered the final round increased slightly from 19 in 2022 to 21, a yearly hike of over 10%, continuing the increase recorded in previous years.

Some enterprises had many new and breakthrough points in Sustainability Reporting. For the first time, a Vietnamese company – Bao Viet Group (BVH), entered the final round of  Sustainability Reporting evaluation. The firms conducted ESG assessments according to Dow Jones international standards. Another Vietnamese company – Gemadept-GMD for the first time entered the final round using GHG emission testing services.

In addition, it was worth noting that besides GRI, Vietnamese enterprises started applying some other information disclosure frameworks such as CDP. In terms of GHG emission disclosure, some companies showed their commitments to Net Zero targets with specific timelines such as VNM and GMD.

In terms of ESG governance, the number of companies applying the ESG committee model under the board of directors was increasing. This reflected the fact that ESG issues were increasingly being paid more attention by the board of directors.

The number of units publishing information on supplier assessment surged  over previous years, especially units publishing a set of supplier assessment indexes on environmental and social aspects. That  demonstrated businesses’ increasing awareness of environmental and social impacts throughout the supply chain.

With positive changes in the disclosure of sustainable development reports in the 2023 reporting season, stricter international regulations and increasing pressure from institutional investors, it was expected that the quality of sustainable development reports in the coming years would continue to improve towards good practices.

As a result, the Council decided to honor six enterprises for their best sustainable development reports. Of them, three received encouragement prizes for three different categories. One was granted the first prize for the best greenhouse gas management report while two got the first and second prizes.

This year, the Council continued to award enterprises that produced the best greenhouse gas management reports. This recognition aimed to encourage listed companies to raise awareness and pay more attention to environmental issues and the impact of climate change, joining hands for Vietnam’s common goal of committing to reduce net greenhouse gas emissions to zero by 2050.

Surpassing many candidates, Vietnam Dairy Products Joint Stock Company (Vinamilk) won this award for the second consecutive time.

Dominic Scriven, Chairman of Dragon Capital, said that domestic and international clients continued to speak up, asking us to comply with ESG in investment.

He said clients wanted to know what we were doing, what strategy we were following, and how to measure progress. However, Dragon Capital was encountering difficulties in measuring the emissions in its investment portfolio because very few companies did this.

Dominic said his firm had to hire an overseas company to assess the emissions in the portfolio and he considered it a big challenge for his firm.

He added that measuring and assessing the environmental impact of the investment portfolio not only helped a company better understand the risks related to ESG but also met the increasing requirements from customers for transparency and social responsibility.

To attract good and long-term capital from investors and financial institutions,  enterprises should see ESG and green transformation investment as opportunities, not costs, Dominic said.

Tran Anh Dao, Acting CEO in charge of the Board of Management of Ho Chi Minh Stock Exchange cum head of the award Judging Coucil said that after 16 years, the award had a very strong influence and increasingly demonstrated the determination of Vietnam in becoming a sustainable financial market and completing the sustainable development goals set by the Government with close cooperation between market  participation.

The award evaluation which had many innovations and advances was described as a bridge to help listed enterprises strengthen their internal strength, develop their brands, and create trust with investors, Dao said.

Over the past two years, in the context that both businesses and the market faced many difficulties due to the impacts of the COVID-19 pandemic, political instability in many countries and especially the global economic downturn that had not shown any signs of slowing down, businesses had to pay more attention to good corporate governance and risk management in building business strategies, thereby helping them overcome the crisis and stand firm in the face of unexpected fluctuations.

The award evaluation results in the past years proved that businesses with a good governance foundation and effective risk control and appropriate strategy development, and tight capital management would quickly adapt, regain momentum and develop stably after periods of volatility.

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. It is technically supported by professional partners including  International Finance Corporation (IFC), Association of Chartered Certified Accountants (ACCA),  Vietnam Institute of Directors (VIOD) and leading audit companies like Deloitte Vietnam Co., Ltd, Ernst & Young Vietnam Co., Ltd, KPMG Vietnam Co., Ltd, and PwC Vietnam Co., Ltd.

2023 was the 16th year that the award had accompanied the Vietnam’s stock market and the listed business community.

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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