ESG conference aims to change mindsets

Le Trong Minh,VIR's editor-in-chief, spoke of how growing a business has never been easy but has become even more challenging recently.

"Achieving growth goals is itself a big challenge, but many believe doing it while complying with ESG directives is even more difficult due to the perceived cost increase and strict requirements affecting profits and competitiveness," said Minh at the opening of the conference.

With the transition to green technologies an overarching trend globally, and the Vietnamese government's commitment to the United Nations' Sustainable Development Goals (SDGs) and net-zero emissions by 2050, many businesses now realise that this is an irreversible process. Understanding and adapting to the new rules of 'the game' is the only way to survive.

"In fact," Minh continued, "applying ESG criteria doesn't have to be a costly affair. Numerous firms have realised that this is an opportunity to deploy a sustainable business model."

"Expansion opportunities for businesses that are successful in applying ESG standards are becoming more frequent. ESG itself has become a new growth driver for those who quickly understand and comply with the new rules," added the VIR editor-in-chief.

The Ministry of Planning and Investment (MPI) is acting as an advisory agency to the government on the National Green Growth Strategy, and Nguyen Thi Bich Ngoc, Deputy Minister of Planning and Investment, spoke of how the ministry wants to mobilise financial resources to create an environment for green and sustainable investment by building a list of key green growth projects to be completed by the end of the decade.

"ESG is also becoming a prerequisite for investors when funding any project or business in Vietnam," Ngoc said.

The MPI, in coordination with USAID, recently announced the '2024 ESG Initiative' for its second year to help the Vietnamese business community seize new opportunities amidst the green transformation.

"Under this initiative, we aim to promote sustainable practices in the private sector to conduct business sustainably and work within an ESG assessment framework to measure factors related to sustainable development and the impacts of business activities on the community," said Ngoc.

"We look forward to receiving the support and participation of the Vietnamese business community for the implementation of ESG," she added.

A recent study found that businesses with higher ESG ratings achieve better financial results, along with 35 per cent higher profit-to-equity ratios, and 20 per cent higher business valuations than those with lower ratings. That means ESG can turn compliance responsibilities into greater value while helping realise the sustainable development goals of the Vietnamese government.

ESG poses challenges for Vietnamese businesses in global trade expansion According to the Corporate Global Trade Survey Report 2023 published by Reuters, 88 per cent of businesses require annual environmental, social, and governance (ESG) data collection from their suppliers. This poses a new challenge for Vietnamese businesses in the process of global supply chain integration.

ESG becoming mandatory criteria for sustainable development of business Environmental, social, and governance factors are increasingly becoming a prerequisite component in the investment decision-making process of many investors, with an initiative offered by the Ministry of Planning and Investment.

RIS.ER 24 event taking place at Sheraton Hanoi Hotel on May 23 The RIS.ER 24 conference themed around environmental, social, and governance (ESG) issues will take place on May 23 at the Sheraton Hanoi Hotel, organised by Worldbasesys Co., Ltd in collaboration with Vietnam Investment Review.