ESG implementation discussed at Hanoi seminar

November 09, 2023 | 17:00
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A seminar on environmental, social, and governance (ESG) commitments took place at the Hanoi headquarters of the Vietnam News Agency (VNA) on November 9.
Opportunities and challenges in applying ESG in Vietnam

The seminar was an opportunity for representatives from ministries, agencies, organisations, and businesses to discuss ESG practices and share practical knowledge and experience to help realise Vietnam's sustainable development goals.

Speaking at the event, deputy director-general of the VNA Doan Thi Tuyet Nhung said, "More and more Vietnamese businesses have been taking a proactive stance in reducing their carbon footprint and engaging in socially responsible business practices. Once successfully implemented, ESG will play an important part in helping businesses identify key issues and to realise their full potential."

"However, the integration and incorporation of these standards still faces numerous difficulties," added Nhung.

Research data indicates that Vietnamese businesses are becoming increasingly aware of ESG as a way to engage foreign investment, and consumers are starting to make purchasing decisions based on a brand's commitment to the practices.

Vice chairman of the Vietnam Chamber of Commerce and Industry (VCCI) and chair of the Vietnam Business Council for Sustainable Development (VBCSD) Nguyen Quang Vinh said, "According to a 2022 survey by PricewaterhouseCoopers, 80 per cent of businesses based in Vietnam are committed to ESG implementation. Businesses can use the Corporate Sustainability Index, established by VCCI in 2016, to review their performance in this area to identify weaknesses and potential."

Opportunities and challenges in applying ESG in Vietnam

Trinh Thi Huong, deputy director general of the Agency for Enterprise Development, under the Ministry of Planning and Investment, said, "The businesses leading the way in ESG implementation are all large-scale, foreign-invested or export-oriented enterprises. However, almost 98 per cent of Vietnamese businesses are micro, small, or medium-sized enterprises, so this is still a new concept for most."

A key challenge to implementing ESG is a lack of information. Most businesses don't know where to begin or how costly it is to put in place. "Businesses shouldn't see ESG as a cost burden, but as an investment. ESG will help businesses comply with legal regulations and meet market requirements, raising their competitiveness and allowing easier access to green capital sources," said Huong.

To help businesses integrate ESG criteria into their production and business activities, the VBCSD has provided specific instructions on how to incorporate it into development strategies.

Pham Hoang Hai, head of the Partnership Department under the VBCSD, said, "ESG is a quantitative tool to realise sustainable development goals. Accessing information to fully understand and master these tools is a challenge not only for small and medium-sized enterprises but also for large-scale ones."

At the event, SABECO, Nestlé Vietnam, Standard Chartered Bank Vietnam, Unilever Vietnam, DEEP C Industrial Zones, and Schneider Electric Vietnam stated their interest in activities to accelerate the ESG implementation journey.

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By Nguyen Huong

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