ESG paves way for sustainable growth

May 24, 2024 | 07:30
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ESG factors are increasingly seen as a catalyst for sustainable growth, especially as they become a mandatory condition for international cooperation.

According to Matthew Smith, head of Research Institute at Yuanta Vietnam, at the "ESG - Motivations and Breakthroughs" conference held at the Sheraton Hotel in Hanoi on May 23, businesses that maintain higher environmental, social, and governance (ESG) standards and actions are viewed more favourably in an otherwise equal playing field.

ESG paves way for sustainable growth
Matthew Smith at the "ESG - Motivations and Breakthroughs" conference

“Investors perceive companies with strong ESG practices as lower risk. This belief stems from the notion that such companies are better managed and more attuned to potential risks and opportunities,” Smith said. “Moreover, companies that excel in ESG standards often find it easier to attract investment. Capital markets favour these companies, offering them better terms and more growth opportunities. Last but not least, due to reduced risk and easier access to capital, companies with robust ESG practices typically enjoy higher valuations. Investors are willing to pay a premium for the perceived stability and sustainability of these companies.”

Additionally, Smith emphasised that corporate governance was the critical factor, suggesting that without strong governance, efforts in environmental sustainability and social responsibility could falter.

“Corporate governance is the foundation upon which environmental and social responsibilities are built. Good corporate governance ensures that a company is well-managed, transparent, and accountable. It not only lays the groundwork for solid environmental and social practices to develop and flourish, but also brings economic benefits,” Smith added.

Thanks to its strong ESG practices, Yuanta Vietnam, a leading securities company, has continuously increased its charter capital from $12 million in 2007, when it first entered Vietnam, to $100 million in 2023.

The company has also steadily expanded its branch network from north to south, establishing a presence in Hanoi, Danang, Ho Chi Minh City, Binh Duong, Dong Nai, and Vung Tau.

Alongside this growth, Yuanta Vietnam has seen a continuous increase in its workforce, from 80 employees in its early years to a projected over 400 employees by 2024.

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The Sheraton Hotel in Hanoi was host to an environmental, social, and governance (ESG) conference on May 23 with the participation of policymakers and the business community, and in collaboration with VIR and WBS Solution and System Co., Ltd.

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In the landscape of modern business, environmental, social, and governance (ESG) considerations have become key factors shaping corporate strategies and investing decisions. Vietnam stands at a crucial juncture where embracing ESG principles is essential for sustainable development and for maintaining competitiveness in the international market.

By Hoang Minh

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