ESG gives businesses competitive edge

April 02, 2024 | 12:43
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Adopting a sustainable business model through environmental, social, and governance (ESG) practices is a challenging journey but provides long-term competitive advantages for enterprises.

Vinasamex, specialising in the production, trading, and export of cinnamon, star anise, and other organic spices to premium markets such as Europe, America, and Japan, has embraced ESG practices from early on.

Implementing sustainable business models and practising ESG has helped the company operate more efficiently, thereby enhancing brand value.

Hence, the company has gained recognition from both governmental and non-governmental organisations with necessary support programmes, according to Nguyen Thi Huyen, director of Vinasamex.

ESG gives businesses competitive edge
ESG is inevitable

"With ESG, the company evaluates and controls risks effectively, encourages and nurtures talent fully, creating positive impacts for stakeholders including employees, customers, and the environment," she said.

Currently, Vinasamex operates four factories and owns over 4,200 hectares of organic cinnamon and star anise, providing at least 600 jobs for residents and improving the livelihoods of over 3,000 farming households in the northern midlands, mountainous regions, and central areas.

Although implementing sustainable business models and ESG practices are handy tools for gaining competitive advantages, adhering to these criteria and models also imposes financial burdens on enterprises, especially small and medium-sized ones.

"For small businesses just starting to adapt with ESG operational models, they must accept incurring additional costs beyond regular operational expenses. However, when finances are balanced, businesses will see the long-term effectiveness attached to this operational model, which is entirely worthwhile," said Nguyen Van An, strategic director of VNF Corporation.

VNF Corporation, a pioneering enterprise in shrimp by-product processing using zero-waste biological technology, asserts that practising ESG is the guiding principle for the company's operational model.

"The company allocates significant resources to address the shrimp industry's waste issues through environmentally friendly processing procedures. We practise energy-saving, material consumption reduction, and develop sustainable biological materials and solutions applied in agriculture," An said.

ESG is inevitable, especially as Vietnam's commodity import markets such as Europe, America, and Japan increasingly demand high standards.

Huyen said that despite the expenses, businesses gain opportunities to expand markets, ensure sustainability, and achieve high competitive advantages, thereby elevating enterprise value.

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By Hoang Minh - The Hai

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