5 factors to drive business differentiation and competitiveness in Vietnam

Businesses in Vietnam must embrace the challenges and opportunities of ESG and the new flexible world of work

The report highlights the lingering effects of the pandemic, heightened geopolitical tensions, rampant inflation, supply chain fragility and new workforce challenges, and the accelerating pressure for action on Environmental, Social and Governance (ESG) issues, which have created a state of disequilibrium in the Asia Pacific region.

A permanent shift in consumer and business behaviour has dramatically changed the trajectory of economies and societies. PwC experts have commented on the impact of five trends on the Vietnamese economy and recommendations to drive growth, competitiveness and resilience in difficult times.

“The world is enduring an unprecedented level of disruption. Businesses in Vietnam must embrace the challenges and opportunities of ESG and the new flexible world of work," said Dinh Thi Quynh Van, general director, PwC Vietnam.

"The key to advancing these agendas in the new reality is a revamped approach to collaboration across the region based on building trust and delivering sustained outcomes. One that must begin now.

The region can no longer hope growth and gradual change will be sufficient to steer it through these turbulent times. Stakeholders must adjust their stance to become more proactive and self-determined. They must adopt new and more nuanced strategies, positioning them for success in a more dynamic and interconnected Asia Pacific.

"Based on PwC discussions with business leaders and experts in the region, we believe five aligned and mutually reinforcing success factors will drive differentiation and competitiveness for businesses and governments to prosper. They are interconnected and interdependent - each one mutually reinforcing but the actions in one have an impact on the others."

These five success factors are:

Supply Chain

Disruption has prompted businesses to reevaluate their sourcing strategies. Leaders in Asia Pacific must shift their focus from cost and efficiency to resilience and trust when transforming their regional supply chain.

Regional Enterprise Growth

Opportunities for value creation are abundant in the Asia Pacific. To scale in the region, dealmakers must take a strategic ‘capabilities-driven’ approach that combines processes, tools, technologies, skills and purpose.

Digital Economy

Digitalisation is increasingly crucial to respond to the new reality. Businesses must embrace digitalisation to drive insights, reduce cybersecurity and data privacy risks and stay relevant in an increasingly complex environment.

Workforce

Employees in Asia Pacific value meaning and authenticity and 90 per cent of the workforce prefer to work remotely or in hybrid fashion. To build trust and respond to the changing dynamics of their workforce, business leaders must rethink upskilling, embrace flexibility and deliver on purpose-driven work.

ESG

ESG is no longer a ‘nice-to-have’ for businesses in Asia Pacific. According to PwC research, momentum is not declining - with 88 per cent of Asia Pacific CEOs remaining committed to their net-zero or carbon-neutral targets. In Vietnam, PwC ESG Readiness Report 2022 revealed that 80 per cent of survey attendants said their companies have made ESG commitments or plan to do so in the next two to four years. Businesses must move from good intention to value creation - accelerating the progression of ESG priorities to differentiate in the market for capital and talent.

“The world, including the Asia Pacific, has changed and will continue to do so. As leaders, we must act quickly to build trust with our stakeholders, create value, enhance competitiveness and deliver sustained outcomes," said Raymund Chao, PwC Asia Pacific and China chairman.

"This requires a transformative and multinodal mindset grounded in collaboration. It’s imperative that we must all come together and act now for the new reality in the region.”

ESG promises must be backed up by genuine progress The importance of environmental, social, and governance criteria (ESG) factors to businesses has been extensively acknowledged. Andrew Chan, Sustainability Strategy & Transformation leader at PwC Asia-Pacific’s Sustainability Centre of Excellence, explained to VIR’s Celine Luu how to address ESG concerns across a broad spectrum of industries.

Stepping up ESG for socioeconomic gains Both businesses and financial institutions in Vietnam are stepping up their journey in environmental, social, and governance (ESG) criteria, and reinforcing commitments to foster sustainability. A fresh PwC ESG Readiness Report for 2022 shows significantly upbeat figures about how businesses in Vietnam are approaching these matters.

Asia-Pacific outperforms global decarbonisation in 2021 The Asia-Pacific region outperformed its global counterparts in 2021 with a decarbonisation rate of 1.2 per cent versus 0.5 per cent elsewhere, as stated in a newly-released PwC report that highlights the efforts to decouple greenhouse gas emissions from economic growth despite the global headwinds.