Sustainable development has become a global trend and an urgent requirement for many organizations and businesses. Because in the period of economic recession, a business not only needs to ensure economic and financial development and growth, but also must maintain a balance with society and the environment. That is also participating in the process of ensuring the necessary resources for production and business activities. So which sustainable development models are most commonly applied today, let's find out together. GREEN IN Find out through the article below!
1. What is the sustainable development model?
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” - According to the United Nations in the 1987 Brundtland Report
Sustainable Development is understood as a development process that strictly adheres to the principles of meeting current economic, social and environmental needs without depleting resources or causing negative impacts on future generations.
The core purpose of sustainable development is to create a balance between economic growth, building a civilized society and protecting the living environment. Accordingly, the three most important factors of this development process include:
- Economy: The purpose of sustainable development is to bring growth to the economy without depleting resources, negatively affecting the future.
- Society: With sustainable development, ensure everyone has access to health care, education, and work in a fair and civilized environment.
- Environment: Ensure that pollution is increasingly reduced, natural resources are used effectively and biodiversity is preserved to bring a green - clean - beautiful environment for future generations.
The sustainable development model will focus on assessing the role of business management in resource management. The premise of these models is the desire for organizations and businesses to focus on environmental and social standards to bring about sustainability between economic, social and environmental factors, while creating long-term value for businesses in particular and the community in general.
2. 4 most popular sustainable development models today
2.1. Triple Bottom Line (3P) Model
Triple Bottom Line is also known by the familiar name of the 3P model with three key factors: Planet, People and Profit. The core purpose of this model is to change the traditional business concept that focuses only on profit to activities that create good values for the community and the environment. Enterprises implementing the 3P model will balance the above 3 factors: commit to implementing environmental protection policies, building a civilized society while still optimizing profits.
2.2. Creating Shared Value (CSV) model
CSV is one of the most popular sustainable development models applied by many businesses today with the goal of creating balanced values between the company and the community. With this model, the main goal of the business is not only to maximize profits for itself as the traditional nature of business but also to continuously aim towards the goal of building society.
In the CSV model, shared value creation is achieved by investing in areas such as education, health and community development. Businesses can leverage their knowledge, resources and capabilities to promote the development of local communities. The levels of the CSV model that businesses can refer to are:
- Provide products with better quality and affordable prices.
- Use natural resources wisely while promoting socio-economic development.
- Promote local community development through support for entrepreneurship, education, healthcare, infrastructure, and indigenous cultural revitalization.
2.3. Social Impact Business (SIB) model
Social impact enterprises are understood as organizations and businesses that bring positive impacts to society and the environment through commercial activities. This type of sustainable development enterprise can be social business units, businesses with visible human resources or startups that create social impact. According to the United Nations Development Program (UNDP), about 70% of businesses operating under the SIB model in Vietnam make a profit, even 59% of them can balance between economic and social goals. The balance between the commercial model and social and environmental goals allows the SIB model to be able to solve social and environmental challenges in a sustainable way.
2.4. ESG (Environmental, Social and Governance) model
ESG (Environmental, Social, Governance) is a long-term investment model that follows a certain set of standards to effectively measure the factors that can impact a business on the community. Accordingly, this sustainable development model will be based on 3 main factors as follows:
- Environmental - Environment: Calculating the level of environmental impact of a business includes a number of criteria such as use of natural resources, climate change, environmental pollution, eco-friendly product/service design and continuous innovation.
- Social - Social: Assesses the business's impact on society through factors such as occupational health and safety, diversity, community relations and volunteer activities.
- Governance: Examines the management and governance of a business with a focus on shareholder rights, board diversity, executive compensation, and anti-fraud and anti-corruption measures.
Businesses that apply the ESG sustainable development model will gain sustainable benefits in the long term:
- Firstly, effective management and creating positive impacts on society will help businesses build a reputable image, strengthen relationships with investors, customers and the community.
- Second, applying standards in the ESG sustainable development model can minimize risks and open up many new business opportunities such as energy saving, diversifying human resources or developing sustainable products/services.
- Third, businesses can attract and retain talent through their commitment to ESG standards.
3. Pioneering businesses in sustainable development in Vietnam
3.1. Vinamilk
Vinamilk Group is known as a pioneer in the dairy industry in Vietnam, committed to reducing greenhouse gas emissions and building a sustainable ecosystem. The brand has built dairy farms that are certified to meet European organic standards, using modern technology in the production process to minimize emissions and optimize wastewater sources. In particular, the use of solar energy at many factories also helps reduce carbon emissions throughout the production process. The CSV model that the company applies has brought sustainable profits and a good image in the eyes of partners and customers.
3.2. Hoa Phat
As one of the leading enterprises in the mechanical industry in Vietnam that strictly applies the 3P model, Hoa Phat is committed to minimizing greenhouse gas emissions through the use of advanced engineering technology in the environmentally friendly steel production process. At the same time, the enterprise has also built a modern exhaust gas treatment system at the factories. In addition, Hoa Phat also strictly applies water circulation and waste management processes to minimize environmental pollution.
3.3. Koto (Know One, Teach One)
Koto is a business in Vietnam operating under the SIB model in the field of restaurant and hotel training for disadvantaged youth. This organization not only imparts knowledge and professional skills but also helps students develop life skills, opening up sustainable employment opportunities. Koto's model balances social goals and profits from restaurants run by students themselves.
4. Conclusion
The above article has helped you learn about the sustainable development model. Hopefully our information will be of some help to you as well as help in the process of protecting the green - clean - beautiful environment. Don't forget to follow the next articles of GREEN IN to get more updated information!