Bond responsibility
BUILD PROSPERITY

SUSTAINABLE DEVELOPMENT FRAMEWORK OF PVCFC

STRATEGIC ORIENTATION FOR SUSTAINABLE DEVELOPMENT

OVERVIEW

PVCFC’s sustainable development orientation ensures alignment with the vision and common goals of creating real values for stakeholders and taking into account development trends of fertilizer industry and around the world but not limited to issues such as climate change, energy, circular economy, waste treatment, employee rights and benefits, etc.

SUSTAINABLE DEVELOPMENT AND VALUE CHAIN

As a company operating in the field of fertilizer manufacturing and trading, PVCFC is well aware of the environmental and social impacts of the value chain. We can see the importance of identifying, assessing and managing these impacts, ensuring that production and business activities are carried out in a sustainable manner, minimizing negative effects on environment, society and community.

R&D

PVCFC has analyzed effects of the products that we produce and distribute from the research state on factors such as greenhouse gas emissions, water, soil health as well as biodiversity. Based on our understanding of these impacts, we always create environmentally friendly products and bring benefits to farmers.

Input materials – Production - Distribution

We deeply understand the environmental impacts of raw material use as well as other effects of production progress. Natural gas is the primary input for fertilizer production. Fertilizer production generates greenhouse gas emissions and industrial waste. Therefore, PVCFC always sets an annual goal for reducing energy consumption, increasing productivity and recovering CO2 emission. During the past years, a lot of initiatives have been deployed, enhancing natural gas efficiency, saving costs and significantly reducing emissions into the environment. In addition, the distribution creates transportation emissions when products are transported in long distances to agents and farmers by road and by waterway. A small amount of fertilizer also can be lost during loading, transporting and storing, which may lead to leakage and environmental pollution. Therefore, PVCFC has been investing in warehouse system in the key regions and developing Level 2 distribution systems to shorten the transportation distance to consumers.

Usage

The use of fertilizer products has certain impacts on the environment, water, soil and biodiversity, especially climate change. Inappropriate use of fertilizers also creates greenhouse gases that affect the ozone layer. We have been implementing many measures to increase farmers’ understanding and sustainable fertilizer practices to minimize the impact on the environment.

Waste management

Assessing, analyzing and managing the impacts of waste in the value chain is essential and urgent. PVCFC has been managing and treating waste during the production process according to regulations of the law. In addition, PVCFC is also studying environmental impacts of using fertilizer including the environmental and social impacts of fertilizer packaging.

STRATEGIC ORIENTATION

Sustainable development orientation includes groups of strategic orientations based on the three pillars of Environment, Society and Governance in line with PVCFC’s overall operational strategy. The groups of orientations are presented as major themes that can help shape sustainable development strategies and activities, ensuring to integrate sustainability contents in implementing general strategies and operations of PVCFC. The groups of sustainable development orientations of PVCFC are as follows

Icon Strategic Orientation for Sustainable Development on Environment
Icon Tau Vu Tru Clean technology
Researching and deploying IT application into production and business as well as fertilizer usage, aiming to reduce emissions and wastes, minimizing environmental impact.
Icon Tau Vu Tru Energy
Continuing to concentrate on enhancing energy efficiency, seeking renewable energy sources to partially replace fossil energy, aiming to reduce energy use intensity and emissions.
Icon Tau Vu Tru Climate change
We are using all available resources to reduce greenhouse gas emissions in all three ranges. We also continue to invest in product research and development to help farmers with a better adaptability to climate change effects such as drought and salinity.
Icon Tau Vu Tru Circular agriculture
Circular agriculture is a closed-loop agricultural production system where waste and byproducts are recycled and used as materials for production, improving resource utilization, minimizing waste and negative impacts on the environment. We aim for products and solutions with sustainable nutrients for plants, increasing the proportion of organic and microbial fertilizers and improving soil health.
Icon Tau Vu Tru Water, air and waste
PVCFC aims to manage and use water resources responsibly, manage waste in production process, especially recovering and recycling fertilizer packages.
Icon Tau Vu Tru Biodiversity
The Company always aims at biodiversity preservation by providing the best product for consumers and giving guidance on using fertilizers sustainably according to 4R principles of IFA.
Icon Strategic Orientation for Sustainable Development on Society
Icon Tau Vu Tru Protecting and building human resource
People are the key element for PVCFC’s success. We focus on creating a working environment where the employees are guaranteed health, safety and welfare commensurate with their experience and contribution and have a chance to develop.
Icon Tau Vu Tru Farmer/Customer welfare
Farmers play an important role in the agricultural value chain. Through training and cooperation with other organizations along with customer/farmer support programs, PVCFC contributes to improving rural life and economy as well as promoting sustainable agricultural development
Icon Tau Vu Tru Product safety
Clean fertilizers help improve productivity and quality of crops and protect environment and human health. Fertilizer quality is strictly controlled according to international standards from raw materials to finished products, with regular inspections throughout the production process, ensuring that each batch of products is of the highest and consistent quality, protecting human health and biodiversity.
Icon Tau Vu Tru Sustainable economy
We support farmers to access financial sources serving their production. At the same time, we guide to build a green finance framework to ensure environmental and social efficiency for projects.
Icon Tau Vu Tru Community
We continue to support the community with the projects that have a great impact on corporate social responsibility in the localities where we have operations.
Icon Tau Vu Tru Diversity, equity and inclusion
We encourage and create an environment where employees from different cultures, genders, ages, religions, political views, abilities and other types of diversity are respected and have a voice in the Company’s decisions and operations.
Icon Strategic Orientation for Sustainable Development on Governance

PVCFC is committed to practicing corporate governance at the highest level possible including but not limited to good corporate governance practices in Vietnam and ASEAN. Some major ESG issues include:

Icon Tau Vu Tru Business ethics
Business ethics is the core foundation for all decisions and actions in corporate governance, including compliance with ethical principles and standards in all business activities, such as human resource management, customer and partner relations, and the treatment to environment and community.
Icon Tau Vu Tru Sustainable supply chain
We aim for a sustainable supply chain where products and inputs are assessed in environmental and social aspects.
Icon Tau Vu Tru Compliance with regulations
Policies and regulations in the fertilizer industry change frequently. We are committed to maintaining systems to ensure compliance with the laws and good practices to which we are committed.
Icon Tau Vu Tru Operating performance of BOD
This is a decisive factor for the success of an organization. The BOD is responsible for strategic direction, supervising the implementation and ensuring that the Company complies with good practices and promotes sustainable development corporate governance
Icon Tau Vu Tru Management of conflict of interest
To protect its reputation and transparency, the Company has developed a policy on interest conflict control to identify, prevent, and resolve potential conflicts of interest in alignment with transparency, fairness and bringing the highest benefits to the Company.
Icon Tau Vu Tru Risk management
To effectively deal with challenges and risks in business environment, the Company needs to build a comprehensive risk management system to identify, evaluate and handle the risks that may affect the Company’s objectives and operations, including financial and legal risks as well as environmental and social risks.

SUSTAINABLE DEVELOPMENT GOVERNANCE

In March 2024, the Company has established Environment - Society - Governance Committee (ESG Committee) as a specialized unit under BOD with the function of advising, consulting, and supervising sustainable development and corporate governance related areas for BOD.
PVCFC’S SUSTAINABLE DEVELOPMENT MANAGEMENT STRUCTURE

The ESG Committee has the following obligations

  • Building and adjusting organizational and operational regulations of the ESG Committee and submitting to BOD for issuance.
  • Advising BOD to build PVCFC’s longterm orientation, strategy and goals toward sustainable development.
  • Supervising action programs, projects and sustainable development activities of Executive Board (including the General Director and Deputy General Directors) based on PVCFC’s orientation, strategy, and long-term sustainable development goals approved by the Board of Directors.
  • Monitoring the information disclosure process on sustainable development (including sustainable development content in the Annual Report, Sustainability Report and other information disclosure).
  • Annually reviewing and evaluating compliance with Corporate Governance Policy (handbook), Code of Business Conduct (CoC) and other corporate governance policies.
  • Proposing BOD to approve ESG risk management policies
  • Monitoring the ESG risks management and ESG related opportunities including climate change risks and opportunities.
  • The General Director takes main responsibility and assigns Planning & Investment Division the job of coordinating and linking all departments/ divisions/units to build plans and monitor implementation and make ESG reports.
  • A focal officer of each department/division/unit is in charge of ESG related issues, synthesizing and reporting to Planning & Investment Division to report to General Director/BOD/General Meeting of Shareholders.
  • The Audit and Risk Management Committee and the ESG Committee monitor the implementation of the ESG strategy at BOD level and report to the BOD.
BUSINESS ETHICS

Code of conduct

The Company’s Code of Business Conduct (COC) has been approved by the Board of Directors in Decision No. 2048/QD-PVCFC dated August 22, 2022. COC provides specific guidance on how to behave as an employee of PVCFC (including all members of BOD, Supervisory Board, other enterprise directors and all employees) when interacting with any relevant entities. Practicing COC in daily operations plays an important role in forming the business ethics that PVCFC is aiming for and directly impacts PVCFC’s business goals. COC also helps PVCFC move towards higher governance standards, contributing to orienting the employees to behave and interact more professionally and actively, creating sustainable competitive advantages for PVCFC.

COC is copied and provided to all employees and is published on the Company’s website. In 2024, 100% of PVCFC’s employees were trained in COC via E-learning system. Orientation training for new BOD members and new employees at the Company also includes COC contents and other relevant regulations. In the coming time, PVCFC will continue to deploy annual training on COC for all employees via E-learning system to raise their awareness of COC. At the same time, this training also serves as a form of commitment to comply with COC.

Anti-corruption policy

The Company’s Code of Conduct, Article 17. Anti-corruption and bribery clearly states “PVCFC’s success is based on the product and service quality, not based on illegal actions or unethical conduct. PVCFC does not tolerate acts of corruption or bribery”. Whistle blowing System is one of the most effective channels for the Company to receive initial reports/warnings about corruption. By the end of 2024, 100% of employees have been trained in anti-corruption and bribery under 3 forms i.e. workshop, online and face-to-face. PVCFC always focuses on business ethics; therefore, the compliance with the rules is disseminated and reminded regularly through training programs, culture building, teambuilding and other activities. Regularly reminding and training ensure that the Company’s employees comply with the antibribery and anti-corruption policy.

ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT

Being aware of possible risks, the Company has issued Risk Management Regulations, including management principles under the Company’s risk management activities as the legal basis for the BOD, Audit and Risk Management Committee General Director, Supervisory Board, Internal Audit Division and affiliated units of the Company carry out risk management, applied consistently and closely associated with the Company’s Mission, Vision, Core Values and Strategic Goals.

The Company’s risks are identified, evaluated and prioritized by the appropriate management level based on “Risk Measures” assessing the possibility of risk as well as level of impact of the risks. All Company’s employees must comply with the risk management framework, regulations and procedures approved. Details of the risk policy are described in the Risk Management section from page 232 to page 241 of the Report.

Social Environmental risk management policy is essential to sustainable governance and an important key to driving PVCFC to improve its sustainable development efforts now and in the future. The Company’s risk appetite statement addresses aspects related to the Company’s operations, including environmental – social risks and IT risks.

The Company commits to complying with regulations of the law (including regulations on labor safety and environment) of Vietnam and countries and territories where PVCFC is operating.

The Company has proactively identified and ensured compliance requirements, establishing and operating management systems including (but not limited to): Code of Business Conduct (COC), policies, procedures and instructions in investment, business and production operations and implementation of contracts/commitments with customers, suppliers and partners.

Based on PVCFC’s risk management framework, PVCFC is now focusing on the following environmental and social risks including:

ENVIRONMENT

  • In order to manage and control these risks, the Company has issued procedures and production related regulations and strict compliance requirements to prevent and minimize gas leak, etc.
  • The Company has installed monitoring stations at necessary places to continuously monitor air quality to detect leaks early and take timely measures to handle.

  • Continuously improving input gas efficiency.
  • Conducting research on improving production processes toward energy efficiency.
  • Using renewable energy.
  • Doing research on greener products for the environment, etc.

  • The Company’s strict regulations and procedures in using clean water and treating waste and wastewater have been issued to ensure compliance with environmental regulations of the authorities in the localities where PVCFC has operations.
  • Signing solid waste treatment contracts with professional units with extensive experience, being recognized by professional organizations and competent authorities.

  • The Company’s fertilizer/nutrient usage guideline has been communicated in many forms of media, seminars, training and consulting programs for farmers, agents and distributors to ensure that the products arrive on time in the right type and right dosage to minimize losses and reduce unwanted impacts on the environment.

SOCIETY

  • The Company has built a culture based on its original cultural identity, mobilizing employees to participate in practice to always ensure Physical - Spiritual - Intellectual Strength and long-term working orientation as well as showing their dedication to work.
  • The Company’s policy ensures that the payment of salaries, bonuses, and welfare is consistent with productivity and fully complies with legal regulations, ensuring environmental responsibility and stable performance.
  • The Company has set up talent attraction policies, training personnel according to expert ranks, and internship programs to supplement human resources.

  • Always ensuring stable employment for laborers, minimizing the risk of unemployment with new directions.
  • Creating conditions to increase the rate of local labor use.
  • Investing in new projects to increase revenue and profits, increasing job opportunities for other subjects.
Every unit, individual and staff member is responsible for social and environmental risk management related to the Company’s production and business activities. Social, environmental management criteria are assigned to divisions/departments and will be periodically evaluated by each level of management.

SUSTAINABLE RELATIONSHIPS WITH STAKEHOLDERS

The Company always combines financial goals with social responsibilities, actively connecting stakeholders to discuss ESG criteria. Identifying and evaluating stakeholders help the Company understand their expectations and impacts to shape the sustainable development strategy.

The consultation result below helps PVCFC identify the position and role of stakeholders to have appropriate strategies and operations to balance the interests of all parties and promote long-term growth, demonstrating a commitment to sustainable and harmonious development among economy, society and environment.

SHAREHOLDER PRIORITIZATION MATRIX

MATERIAL AREAS

PVCFC’S MATERIALITY MATRIX

Identifying material areas plays a key role in the sustainable development strategy, enabling the Company to prioritize resources for the issues that have the greatest impact on its business and stakeholders. To ensure objectivity and comprehensiveness, we have applied the methodology of GRI guidelines. The results of materiality assessment show that the Company’s priority issues are closely associated with the 17 Sustainable Development Goals (SDGs), contributing to promoting long-term growth and creating sustainable value for society.