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BUSINESS REPORT

nesses also need to pay attention to the
social environment. Major companies have
come to recognize that promoting ESG
measures is essential for sustainable devel-
opment, offering long-term benefits to
both shareholders and local communities.
ESG criteria have therefore become key
considerations when investment decisions
are being made. “Major enterprises all inte-
grate ESG criteria into their development
processes, as it has become mandatory for
those hoping to be in business for the long
haul,” Deputy Minister Ngoc emphasized.
Many of Vietnam’s significant trade
partners and investors are now imposing
stringent conditions in this regard. For
instance, countries and territories across
Asia, like Singapore, Malaysia, Hong Kong
(China), and the Philippines, stipulate that
publicly-traded entities disclose their ESG
performance or adhere to sustainability
reporting requirements. China is also poised
to implement similar policies targeting pub-
licly-traded entities in the near term. Beyond
national regulations, many international
agencies regard ESG as pivotal when con-
templating collaborative agreements.
Mr. Patrick Haverman, Deputy Resi-
dent Representative for the UNDP in Viet-
nam, noted that meeting ESG criteria cre-
ates long-term value through efficiency
improvements, employee benefits, and
improved labor policies. Upgrading ESG
practices can also enhance a company’s
access to international markets and sus-
Beyond mere obligation tainable finance. The EU, in particular, is
implementing stricter sustainability
requirements and disclosures for busi-
nesses, including regulations directly related
Integrating ESG practices into operations can not only
to corporate sustainability reporting and
alter the way businesses are created and managed but practices. For businesses wishing to export
also the way they are perceived in the marketplace. to the bloc, sustainability and labor rights
provisions are included in free trade agree-
ments, such as the Comprehensive and
By LINH TONG
Progressive Agreement for Trans-Pacific
Partnership (CPTPP). Similarly, the UK
emphasizes ESG practices and has aligned
mplementing environmental, social, affirmed that major enterprises are inte- them with sustainable development goals.
governance (ESG) criteria, introducing grating ESG criteria into their development
I sustainable business models, and work- processes and this is now mandatory for Breaking
ing towards green growth have become businesses if they hope to succeed in a down barriers
almost mandatory in the modern world, sustainable manner. According to Mr. Haverman, in Viet-
and many of Vietnam’s major trading and According to the Deputy Minister, pro- nam, where greater attention is being paid
investment partners have adopted strict moting green growth has become a pressing to ESG by the media, the government,
requirements on such matters. ESG has need, a driving force of economic growth, and businesses, the concept has found a
actually become self-imposed criteria at and a key factor in enhancing national place within the National Green Growth
many companies thanks to government competitiveness amid international inte- Strategy and National Climate Change
efforts and the rising prerequisites of investors gration. On the journey towards green Strategy, supporting private sector enter-
when it comes to sustainable development. growth, ESG criteria serve as the standard prises and sustainable businesses. However,
for measuring and evaluating an enterprise’s many frameworks and guidelines suggest
Mandatory sustainable development. Post-pandemic, that the actual level of ESG practices is
requirements ESG stocks have continued to perform still quite low in the country. A report
Addressing the “ESG - Motivations well, and many economists view such cri- from the Vietnam Chamber of Commerce
and Breakthroughs” conference on May teria as a new element of corporate social and Industry (VCCI) found that 80 per
23 in Hanoi, Deputy Minister of Planning responsibility (CSR) efforts. cent of local businesses have made ESG
and Investment Nguyen Thi Bich Ngoc In addition to the bottom line, busi- commitments or plan to do so in the near

32 Vietnam Economic Times May 27, 2024 en.vneconomy.vn