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COVER STORY

times. The PwC report indicates that while
governance remains a key focus in the
ESG strategies of businesses in Vietnam,
there is a growing emphasis on environ-
mental and social issues.
Vietnam is among the countries most
vulnerable to climate change, and is projected
to suffer a loss of $523 billion by 2050.
Consequently, the establishment of
green finance plays a crucial role in pro-
moting sustainable development. Moreover,
there are significant market opportunities
in this endeavor, offering benefits to com-
panies such as access to green bonds and
investment from environmentally-con-
scious investors.
However, a lack of knowledge is the
primary obstacle preventing businesses
from making ESG commitments. There is
much work to be done in terms of adapting
stakeholder management and disseminat-
ing ESG knowledge within organizations.
Furthermore, businesses must integrate
their ESG strategies into their overall
ecosystem, particularly in relation to exist-
ing risk practices. When asked about
incorporating ESG factors into their risk
frameworks, the majority of businesses
surveyed for the report (67 per cent) said
they have faced challenges due to the
absence of transparent regulations.
The collection, management, and uti-
lization of ESG data for risk modeling
also present significant challenges. A major-
ity of businesses (71 per cent) expressed a
lack of understanding regarding the data
required for reporting purposes.
Upon further examination of companies
in the planning stage, it becomes evident
PHOTO: VIET TUAN
that the majority of public limited compa-
nies (PLCs) in Vietnam (58 per cent, and
PACE & DIRECTION greater than in FDI and private businesses),
demonstrate a high level of commitment.
In order to facilitate the adoption of
ESG practices by businesses, there is a
The PwC ESG Readiness in Vietnam Report determined the degree pressing need for enhanced guidance and
of work companies in Vietnam have undertaken in regard to ESG policies in the field. The absence of trans-
practices and strategies. parent regulations was cited as the top
challenge by 67 per cent of respondents.
However, businesses should prioritize the
By PHAM HAI AU need to bridge the knowledge gap, given
Director, Risk Assurance Services, PwC Vietnam
that knowledge serves as a significant
barrier. PwC’s findings indicate a necessity
to enhance the understanding of ESG
matters among Board Members. However,
ccording to the PwC ESG Readi- the COP26 conference in 2021, which it companies in Vietnam are not prioritizing
ness in Vietnam Report, some 80 has further emphasized since. It has also the training required to increase their
A per cent of businesses have either introduced various strategies and laws to confidence levels.
made commitments to environmental, boost environmental protection, facilitate Undoubtedly, boards that prioritize
social, governance (ESG) practices or have the transition to green technologies, ESG initiatives play a crucial role in driving
plans to do so in the near future. This develop electric energy plans, measure impactful ESG strategies within their
trend is primarily driven by the changing greenhouse gas emissions, promote a cir- organizations. Therefore, it is essential for
expectations of consumers, employees, cular economy, and enforce regulations boards to possess strong capabilities in
and investors. At the global level, Vietnam on the responsibilities of manufacturers. ESG topics to fulfill their governance and
has made significant commitments to There has been a clear and rapid increase oversight responsibilities. According to
tackling climate change, particularly at in ESG awareness and initiatives in recent the PwC survey, nearly one-third of respon-

18 | VIETNAM ECONOMIC TIMES | DECEMBER 2023 en.vneconomy.vn