AIBP ASEAN B2B Growth
AIBP ASEAN B2B Growth
Vingroup: Harnessing Digital Tech for Good - The Role of AI in Vingroup's ESG Strategy
In this episode, Dr. Morgan Caroll, ESG Director for Vingroup and VinFast, discusses the winning project from the AIBP Tech for ESG Awards. Vingroup’s winning project initiative focuses on leveraging frontier technologies like IoT, AI, and blockchain. This includes VinFast’s EVs which aim to reduce carbon emissions with smart solutions enhance energy efficiency, VinUni incorporates VR and AR into education contributing to a more immersive learning experience, as well as Vingroup’s solar energy initiative aims to offset approximately 23,000 tCO2e per year in stage 1 escalating to about 46,000 tCO2e in stage 2, demonstrates a commitment to environment responsibility.
Vingroup is one of the largest conglomerates in Vietnam with a market capitalisation of USD6.8 Billion, with businesses in multiple sectors such as real estate, technology and industry.
The AIBP ASEAN B2B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation.
Vanessa Kwan:Hello and welcome to the ASEAN B2B growth podcast where we sit down with individuals responsible for driving growth within their organizations here in Southeast Asia. My name is Vanessa, and I'll be your host for today. In this episode, we have a very special guest joining us, Dr Morgan Carroll ESG, Director at Vingroup and VinFast. As Vietnam started private conglomerate with a market cap of USD $7.1 billion. Vingroup is dedicated to sustainability across its operations. Without further ado, may I invite Morgan to give us a brief introduction of yourself? Yeah, give us an idea of your background, and perhaps share some personal hobbies with us.
Dr Morgan - VinFast:Thank you, Vanessa, it's lovely to be on air at this stage. So a bit of my background over here, I lead the global sustainable,sustainability strategy at Vingroup and VinFast, specifically on VinFast, because of our global trading at the moment, my background spans a couple of industries. I've worked in the mining extensively, as well as hospitality and real estate, and I started my study career in the University of Cape Town in South Africa. I have many contributed to quite a bit of philanthropic activities in Africa, and that's where my passion lies, in helping the poor and the needy.
Vanessa Kwan:Perfect, and for our international audience who may not be familiar with your organization. Can you share a little bit more about Vin group's history and business model? Perhaps give us a brief overview of the different units, maybe real estate, retail, hospitality, healthcare, education and green mobility? I hope I didn't leave anyone out.
Dr Morgan - VinFast:So Vingroup was founded by in 1993 by Mr.Phạm Nhật Vượng. He's our chairman. At the moment, we have about 100 PNLs and Vingroup contribute in 2020 the year 2020 we contributed about 2.2% of the GDP of Vietnam. So you can imagine how big the conglomerate is, and we made up, actually, of a few sectors. It's really an ecosystem in itself. We have a the hospitality industry, which is Vinpearl and VinWonders. We have real estate, which is your Vincom, retail. We have been everything's a VIN so we have Vinmec, which is a health with your health sector. We have the industrial sector, which is VinFast and VinHMS. And we have, of course, the real estate, which is our biggest sector, which is Vinhomes as such. A little bit about each one. The main,the top five is VinFast Vinhomes, Vincom, retail, and then Vinschool also comes in. Vincschool, we have three sectors that are non for profit, which is Vinmec and Vinschool. Vinmec, I believe we have seven hospitals and a few clinics. We have Vinschool, which is about, which follow the K12 principle system, which we have 39 campuses, and about 36,000 scholars. And then, of course, the last but not least, we have VinUni, which is also a non for profit University. So we have 3elements, which is VinMec, Vinschool and VinUniversity, the non-profit activity. And then, of course, the most favored one at the moment is the VinFast, the EVS, which everybody really loves. And I think we'll talk a little bit about that as we go on. Perfect.
Vanessa Kwan:And can you also mind? Do you mind giving us an overview of the culture of ESG. And you know how sustainability is being permeated across the conglomerate?
Dr Morgan - VinFast:Sure, I think in the old days, sustainability was misappropriated in commerce and businesses and really stretch out a proportions we'd have. Often the leader would say something that you couldn't measure and it wasn't scalable. And then along came ESG, which really put the color back into your business model, it was always gray, which creates scalability and measurability. And at VinFast, our leader, our Chairman, recognized that, along with the other leadership. Uh, and we started implementing ESG activities about two years ago. We had sustainability, but we wanted to change the dynamics of how our company works, so that people and our shareholders and our stakeholders can actually measure us. And we went about putting in systems that were long term, objective orientated. And I think about two years ago, we also implemented a division on ESG. That's where I currently sit, in Vingroup. And we're currently implementing PIC, person in charge in all the PNLs. And you can imagine that's a daunting task, because there's not many experts out there on ESG at the moment, and we've got 100 PNLs, so we've got to find 100 people that are qualified and and have capacity to fill them. And I suppose, last but not least, the most things that we've done and achieved. Just recently, we introduced a framework on ESG and a roadmap, roadmap that our PNLs follow diligently every year. And at our annual meeting, which is in August in nachon, on the island that we have in PIL they the CEO gets to stand up and say how he's progressing on the ESG KPIs.
Vanessa Kwan:You have a really stressful job in front of you. I think 100 PIC's for each of the 100 PNLs you have, is a very big task, you know? What are some of the metrics? What are some of the KPIs that the company is using to track the different progresses and to evaluate effectiveness of the different ESG initiatives, I imagine it would be more challenging in the future if you were to have different PIC's for each of the PNLs like you've shared.
Dr Morgan - VinFast:Yeah, that's right. So, so putting a framework needs adaptability and scalability that you implement right, and you have to take in consideration when various sectors we have VinBigdata , VinBrain, which is your AI sector, and currently, one could actually just take Vin fast, for instance, we currently have focused tremendously, a lot of effort on that, because we just listed on the NASDAQ. To list on the NASDAQ, there's reporting requirements from your Security Exchange Commission. You also have your IPO requirements on your policies and your procedures. And we try to orientate our progress that can have measurability in the long term. So we've also assigned from an international perspective. We've also listed for the first time on the CDP. Uh, we've disclosed to shareholders our GHG emissions, but Vinfast had been capturing our GHG emissions since 2019 for scope one and scope two, and we're currently doing the scope three, which is a daunting task, if you can imagine the amount of suppliers that we have. We also then enhanced our international arena, by committing to the climate pledge, which has a net zero target by 2040 which is 10 years ahead of the target set by COP26 as you know, which is 2050 I know we make EVs, but it's still a emission reduction aspect. And to enhance that and further accelerate that, we've also commenced this year to install solar on our rooftops of our factories in high farm with starting with 30 megawatts, we do things big, 30 megawatts every six months, so we hope to neutralize our emission factors. But it's most challenging because, as we trade globally, we open up India, in fact, a factory in India, Indonesia, North Carolina. So we have to have same for same activities that take part. But just as to to emphasize that most of the plenaries and discussions I enter internationally, there's always this concern about the costings for that. But if everything is relevant in the long term, if small and medium and enterprises also follow suit and they enter and integrate renewable energy at early stage, they have two benefits from that one is a compliant and they save electricity from the grid as per se. And the second one is they have accessibility to carbon credits. So, so there's, there's, it's a win, win situation in the long term.
Vanessa Kwan:Understand, you know, it's very exciting to hear about the different digital initiatives that Vingroup has been doing the past 24 months. You know, you earlier shared about leveraging frontier technologies like IOT AI blockchain. You also mentioned you're transitioning into smart electric vehicle production, or rather transition. You've also recently listed on the NASDAQ. You've spoke about implementing Smart City. Solutions, immersive technologies, in education, healthcare, these innovations, you know, contribute to sustainability, reduced carbon emissions, creating jobs, enhancing the overall community, well being. And I think that in itself, is very impressive. What you are working on, you know, something interesting. A lot of people are talking about it like you mentioned, is fin fast probably also get a lot of headlines when you listed last year. Can you perhaps give us a little bit more of an introduction, or rather a little bit of an overview of VinFast as a company? What are some of the tech platforms that you are using, some of the you know, business model, if I can put it that way.
Dr Morgan - VinFast:Yeah. So it's very colorful question that, and I have to be very concerned on what information I can share with you, but I can just share, from a liberal perspective, right, that currently in Vingroup, we have our own AI companies like VinAI, VinBigdata, VinBrain and VinTech right? And we use them to support all our other structures, like Vinhomes, VinRetail and all the other Vins, right? It's not too similar to what we're doing with VinFast, two features that really come into play is your infotainment and your driver assistance systems, right? And then the second the third part not many people think about, is your advanced battery technology, and all these utilize AIS or semiconductors. Now, if you look at semiconductors globally, there's about 200 billion worth of revenue generated, I think, in last year or something, but this year it's deemed to accelerate to about 400 billion. So it's almost double, definitely double or triple what was done previously. So AI is a big feature, and that's why we invest a lot in AI. Now you can talk to your car and tell you where you want to go. It doesn't supplement, from my point of view, a wife, but it has some benefits, because you can adjust your voice recognition. You have many other aspects. So tech is definitely a big thing for us, and it's very competitive at the moment, as people and other OEMs merge into EV mainstream, for us to keep ahead, we have to have high tech AI capacity.
Vanessa Kwan:You know, when we speak about EV, two things come to my mind. First one is the charging infrastructure. Second one is the batteries. Like you've mentioned when we talk about charging, you know, in ASEAN countries, in this part of the world, where we are persistent challenges of inadequate EV infrastructure is evident as compared to more developed global markets, like, for example, in the US. Is this any different from when you export globally to more developed countries, and if you know the entire world will, let's say, to transition to EVs tomorrow. Would we run the risk of, if I can put it this way, shifting emissions from tail pipes to power plants?
Dr Morgan - VinFast:Add some Thank you. So, so if you look at the EV charging infrastructure, and coupled with AI, right, the technology is really fast paced, and numerous innovative concepts are coming to the fore. And if you look at the EU, they have a great infrastructure, right? And then Netherlands, you can drive a kilometer, and there's an infrastructure. There's that so you'll never run out of a charging system. But in is the Europe, Asian countries. It's very highly condensed, populated and infrastructure is very challenging for us. But what we usually do is we usually collaborate with a company that's within that country. You would have seen recently, we signed an MOU for UAE for distributing our EVs. We try to do it ourselves as a Vietnamese company, but it's just not always possible because of legislation and the know how business understandings. So it makes good business acumen to actually accommodate by engaging local companies. That are already adverse with the regulations over there. I think we really push for a comprehensive electrical vehicle ecosystem, and to do that, it's going to be a, I'm going to say, kaleidoscope of different elements complementing that infrastructure. But yes, Asia is challenging, especially when you go into the realms of India, a high population, small infrastructure. But we invent fast ourselves. In Vietnam, we've implemented our own infrastructure. I think we've got 150 stations or something like that. And quite, very, very successful.
Vanessa Kwan:Understand. Thank you very much for sharing. You know, earlier you also spoke a lot, a little bit about the battery side of things. You know, you've mentioned having plants in India, having plants in Indonesia. I think in the news, we've also seen a manufacturing plant setting up in North Carolina, in the US. For yourself as the ESG director, how are you helping to, you know, maintain a certain level of standardization of, say, sustainability practices throughout the different manufacturing plants?
Dr Morgan - VinFast:Yes, can be most challenging when you're trading globally. And we have a team that Homo location there, and my team that actually look at regulatory requirements, and if you see the latest EU shift towards battery requirements, and then your GHG and the import factors, and that can be very challenging, right? But however, if you keep to the same principles that you've done in vinfast in Vietnam, we follow international standards like ISO, 14,000 or 9001 quality, QA, QC aspects, right? And one of the topics that is biggest concern now is conflict minerals, or the traceability of your supply chain, both for GHG as well as for products that come from, for instance, countries that are using child labor. So if you gain focus on certification, and you are able to use systems that can trade, have traceability of your supply chain, it's so much easier, because we just duplicate that when we move to other organization, other countries in that we actually then have a swap method where we bring and train up our engineers, so they'll come to Vietnam and they'll spend a few months young and gather what we're doing here. If you look at our factories, they actually have 95% automation, which really makes it much easier to transpose something that we've done in one country to another country. We're very, very specifically orientated to compliance in the world, in the world of sustainability, as well as ensuring that the community that we surround share the same beliefs as what we do so there's a lot of focal aspects and programs to enhance the community, and some things that usually benefit them is training the local community that surround us up as engineers and working our robotics and programs like that. And it has a mutual benefit for both outside and inside, we always see, from a wind pass perspective, that our operations, that we in a in a community, we actually see ourselves as a commune, and we are just as much part of that commune as anybody else that's outside the gate. And really, we do focus on long term ESU programs that benefit our immediate surround communities, that foster relations with community leaders. We strictly comply to regulatory laws Environment and Labor, as well as implement programs and most of all, reduce our GHG emissions.
Vanessa Kwan:Understand, I think you speak a lot about building an ecosystem within the Vingroup of companies, and that's something that's very interesting. A similar trend also that we've seen across Southeast Asia, with different conglomerates, each building their own portfolios, apart from VinFast, like you've mentioned, you know, Vingroup has also embraced different kind of technologies to improve, let's say, your Smart Cities part the education and healthcare services portfolio of the company. Perhaps we can start off, or rather go towards the next part, where we look more into the net zero mega city strategy that you know you've shared in our earlier conversations. Can you tell us a little bit more about that?
Dr Morgan - VinFast:So our real estate is one of our it's our real estate. I think it's 30.33 point 5 billion USD, right? And we have mega cities, and these are really a pure ecosystem. We make sure, from a design perspective, that they, they designed with green material, in other words, material that we sources from a recyclability aspect, so we have, we're not using something that's come out the ground and not been so we're looking for something that's been reused already, right? We also do, we ensure that when we build the mega cities that it's always only our building structure is only 14 to 15% of that real estate, the rest is actually allocated for amenities, you know, such as golf courses, greenery, gardens, and those things we we also then ensure that we have a large component of of renewable energy in those systems, including the transportation. Remember when fast. Doesn't just make EVs. We make e scooters and we make e busses, which, like most people, don't really realize. And further to that, we also have in these ecosystems, we have we reuse our wastewater on the gardens. We use. Any waste is collected, it's put into fertilizer and they put back into the gardens. We also have solar on our buildings, and we also have systems that we implement. You would have seen it internationally, in Germany, and that they have a ecosystem right on top of the buildings where we do the same we also do heat mapping and ventilation to give to reduce the heat, to improve ventilation on our buildings as such. Uh, really, it's, it's a full it's, it's lovely to stay there, because you you have everything. You have. You have Vin school, you have Vin uni, you have you have shopping centers. You have everything. You go to the movies. You can go buy things in the shops, you can have a hamburger. You don't even have to leave your mega city, which I think is pretty unique in most aspects.
Vanessa Kwan:I'm going to have to call you the next time I'm in Vietnam to bring me to one of the mega cities that you guys have built. I think it's very interesting. Also, you spoke a little bit about Vin schools, Vin uni, I think on healthcare, education, there's a lot of things that Vin group is working on. Can you share some of the initiatives, some of the projects that are helping to drive the quality of life for the community?
Dr Morgan - VinFast:Yeah, sure. So our Chairman's really a philanthropist. He introduced the VinMec, that's a not non for profit organization. We have three segments on not for profits, and one is called Vin uni as well, right? And it was implemented to help the community. And one way that we do that, we ensure that the Vietnam has, currently, government has a green growth plan, and our vinmx are tailored around that growth plan to support the local communities. We We further enhance that by ensuring that we the accessibility to healthcare. I think the locations are very important. And I also think the costings of are controlled so that it's not an expensive journey for a person that has a middle income. And I also believe that the services of QA, QC is very, very high standard. We also develop apps that help the rural communities that don't have those facilities by actually giving them access to understanding about medicine, the training aspects and that we're very focused on implementing positive change within our local communities. I mean, at the end of the day, they are workforce. They're the people that actually then support us, so we're very focused on that. The other aspect is the educational part. Vin uni actually steps in quite comfortably over here, we've have a collaboration with Vin uni and University of Illinois. They provide 10 major projects covering healthcare and such things as data science, artificial intelligence, trying to think biosensors, information gathering and that. And just recently, just just for your information, when unit, when unit, when University was the first university to win the award for the iscn, if I can recall how what that is a international, sustainable campus network, I don't know about that, right, and part of that is Because of the diligence in providing mobility platforms and analysis of individuals health. There's, there's a lot to talk on Vin homes and Vin Mec and that, but I think that's enough for now, right?
Vanessa Kwan:You know, I imagine a lot of what you shared is not necessarily the cheapest way of operating a business. You know, there are different units, different subsidiaries across Vingroup for yourself, as the ESG director, how do you usually justify or manage Vingroup's business needs as a publicly listed company, as opposed to, you know, managing and justifying for certain Sustainability, Environment, environmental initiatives that you have lined up.
Dr Morgan - VinFast:So I think I'm going to just throw that question to what I think is the best answer, right? I think you know, if you look at the most of the questions that we're getting so well, what do you think is the best place that we're going to trend as a kind. Company. And of course, obviously our home is Vietnamese, right? And we're in Vietnam, but I think ESG prominence in the areas that we claim to trade from a global perspective, and that stuff, it's, it's equal. There should be no higher priority than the than anybody, than one country versus another country or area. And I think the way forward for ESG, from my own perspective, is AI and the development of AI. And why do I say I because it covers all ESG aspects. You can you can analyze and reduce impact through the environment, through climate change models, monitoring deforestation, energy management, your your aspect is we promote inclusivity and fairness and ethical behavior. We have anti discrimination programs or apps when we do recruitment promotion, promote data so and in terms of your G, it can help automate routine tasks, detecting fraudulent activities and ensuring regulatory compliance. I think that's a way, because if you've got AI, you can actually use it universally anywhere. It's a strong belief. I know there's concerns that AI is going to take over the world. I don't think that's going to happen. I always think of some of these movies that have come out that people believe in, but AI has as a place and needs to be controlled, of course, and really comes down to the algorithms that they put in
Vanessa Kwan:kind of shared today is very informative. And you know, I'm sure Vin group will continue to scale up on your digital initiatives and also to integrate it more fully into your overall ESG strategy. As you've mentioned, you know, you've also very kindly shared about how Vin group is driving certain sustainability initiatives and driving sustainable responsibilities across the operations. And I think this is something that's very important as we look forward when it comes to financial performance and competitiveness in the longer run. Looking forward for yourself, Morgan, what are some areas number one within Vietnam, across the ASEAN region, and also globally, that you are personally most excited about?
Dr Morgan - VinFast:That would be a challenge from a wind fast perspective. Let's have a look at that. I think it's equally all the same. You know, everything every country that we've traded in, has been well received. People love our vehicles. There's always negative propaganda that goes out there, because they sell papers and media and things like that. But there's a good thing about it, because when you implement EV on from a vent pass perspective, you actually implementing something that can reduce your GHG. It's, it's, there's no noise when you're driving these vehicles. So it actually is a very major encouragement taking force the adaption, though, can be challenging, because it is for the whole since you were born, you had a gas, petrol car, and now suddenly you're going to say, well, I need to jump over using a battery car. So there's a big challenge with regards to that, where what excites us, I think excites us, is the building of our India operations, as well as the North Carolina one and the one in Indonesia. And I think those are the hubs where we're going to be moving considerable time spent. But if you look league locally, and from a broad perspective, you look at sort of the local media and international media, you'll see that we've already spruted in different areas. We're already in the UAE. We just recently announced Malaysia coming to fruition, and even remote places like in Africa, Nigeria, gaining over there. So from my personal perspective, I think just having the pleasure of actually being part of a great initiative to reducing GHG and EVS into the world is, is in itself rewarding. I'm not too sure if you are you have an EV yet, and I'm sure we can work something out after that. You can test drive one of them. They're beautiful. They're lovely. All this hype about they don't go far in that the driving range is almost the same as what a petrol vehicle conducts at this stage. They're safe, they noise free. They have more tech in there, more info attainment and things like that.
Vanessa Kwan:I think I'm really going to have to ping you after this to plan my next trip to Hanoi, hopefully to drive one of the bin parts vehicles. You know Morgan, thank you very much for your time. Today, you've kind of shared a lot about what Vingroup is doing, some of the digital initiatives, as well as the sustainability initiatives in the pipes, India, Indonesia, North Carolina, you mentioned expansion into UAE, Malaysia, also remotely in Nigeria. Those are certain areas that we would. Definitely be keeping a lookout on with regards to some of the initiatives that Vint fast will continue to drive. Hopefully we will see a lot more good news in the media, from yourself, from your team, and thank you again for your time today.
Dr Morgan - VinFast:Just like to end from a Vinfast perspective, I think our vision is focused beyond just being a manufacturer. Windfast is shaping the future of clean, intelligent mobility, and the quicker people realize that it's an important step towards bringing back clean a clean world, the quicker we can repair it. I'd like to thank you, Vanessa, for your time, and we look forward to hosting you here at our factory test driving one of the vehicles over here and also staying in one of our wind pool hotels. They're lovely,
Vanessa Kwan:awesome. Thank you very much, Morgan,
Dr Morgan - VinFast:it's a pleasure. Thank you very much.
AIBP Intro:We hope you've enjoyed the episode. For more information about business growth in the ASEAN region, please visit our website, www.IoTbusiness-platform.com.