In the coming decade, sustainability will no longer be optional—it will be a prerequisite for business survival. The world is entering an era in which ESG (Environmental – Social – Governance) serves as a “passport” for international trade, investment, and capital mobilization. Enterprises that fail to meet ESG standards will gradually be excluded from global supply chains, across industries from textiles and agriculture to energy, logistics, and manufacturing.
For Vietnam—an export-oriented economy where the private sector accounts for over 40% of GDP and 85% of the workforce—the pressure to transition toward ESG compliance is arriving faster than anticipated. Policies such as the European Union’s Carbon Border Adjustment Mechanism (CBAM) and Deforestation Regulation (EUDR) are creating strict “green barriers.” A Vietnamese company may lose orders or face additional taxes simply because it cannot prove the origin of its materials, energy sources, or clean production processes.
However, ESG is not merely a challenge—it is also a gateway to a new era of growth. According to the International Finance Corporation (IFC), companies adhering to ESG standards can access capital 15–20% cheaper, achieve labor productivity gains of 10–15%, and significantly enhance brand value. In other words, ESG is becoming the “common language of capital, technology, and markets,” and those who learn it early will secure a lasting competitive edge.
In reality, most private enterprises in Vietnam—especially small and medium-sized enterprises (SMEs)—remain “outside” the ESG movement. Many consider it a distant concept, relevant only to large corporations, while they struggle with input costs, labor, and orders. More concerning is the awareness gap: 70% of businesses have never received formal ESG training, and 90% lack emission measurement or sustainability reporting systems, according to a 2024 survey by VCCI.
The primary cause lies in the absence of supportive mechanisms and financialization of ESG. Transitioning to clean production typically requires investment equivalent to 3–10% of annual revenue for waste treatment, renewable energy, or certification systems—beyond the capacity of most SMEs. Meanwhile, Vietnam’s banking and financial system still lacks a widely adopted “green credit” or “sustainable finance” framework, making it difficult for businesses to access preferential funding.
Across the region, Thailand stands out as a pioneer in integrating ESG into business policy and finance. As early as 2019, the Thai government launched a National Sustainable Finance Strategy, encouraging commercial banks to offer Sustainability-Linked Loans (SLLs). Under this model, enterprises receive lower interest rates when they meet or exceed their ESG targets—such as reducing CO₂ emissions, improving energy efficiency, or enhancing labor welfare.
Simultaneously, the Stock Exchange of Thailand (SET) mandates all listed companies to publish annual Sustainability Reports in accordance with global standards (GRI, SASB). SET also operates the Thailand Sustainability Investment Index (THSI), ranking firms by ESG performance. This framework enhances transparency and helps investment funds allocate capital toward sustainable enterprises.
Thanks to this coordinated mechanism, over 70% of large Thai companies have implemented ESG practices, with many SMEs joining through supply chains or receiving technical support from banks. In 2023, Thailand’s total volume of sustainability-linked loans exceeded USD 12 billion—a clear testament to the power of ESG financialization.
In comparison, Vietnam is still at the early stage of this journey. While the government has issued a Green Growth Strategy and a Sustainable Development Strategy, and several ministries have begun integrating ESG into policy, a concrete implementation mechanism remains lacking. To make ESG a genuine driver of private sector growth, three core pillars are essential: Incentivize – Measure – Financialize.
- Incentivize. The state should introduce clear incentives such as tax breaks, credit support, or certification subsidies for ESG implementation. Local governments could establish Green Transition Funds to finance projects in energy efficiency, wastewater treatment, or renewable energy. ESG criteria should also be integrated into SME, export, and innovation support programs.
- Measure. ESG cannot remain a slogan—it must be standardized and measurable. Vietnam needs a national ESG framework aligned with GRI and IFRS-S standards, but simplified for SMEs. Core indicators—emissions, energy consumption, material sourcing, and labor welfare—should be measured consistently with clear guidelines. Additionally, a National ESG Data Platform should be developed to enable companies to declare, monitor, and benchmark their performance in real time.
- Financialize. This is the decisive factor for success. Banks and investment funds should be encouraged to develop green financial products such as Green Bonds, Sustainability-Linked Loans (SLLs), and ESG transition credit lines. When capital is tied to ESG outcomes, businesses gain stronger motivation than any regulatory requirement can provide.
Within this ecosystem, VAPEDCO can serve as a catalyst and connector. As a center for private sector development, it could launch the “ESG Fast-Track Program”—a rapid “training, consulting, and certification” model for SMEs. This program would help enterprises understand ESG criteria, prepare simplified sustainability reports, set up basic measurement systems, and develop documentation to access green finance.
VAPEDCO could also partner with commercial banks and international financial institutions (such as IFC, ADB, and the World Bank) to establish a Private Green Transition Fund, offering concessional loans or credit guarantees for ESG-compliant firms, along with technical assistance for clean energy, circular economy, and resource efficiency projects.
Moreover, the center could develop the Vietnam ESG Index, ranking and publishing periodic lists of top-performing sustainable private enterprises. This index would become a powerful communication and branding tool, helping firms enhance credibility, attract investment, and expand into international markets.
As ESG becomes the “currency of trust,” pioneering enterprises will be rewarded by the market—with capital, contracts, and talent. This is not merely a matter of corporate ethics, but a strategy for survival in an increasingly transparent and globalized economy.
The ESG transition will not be easy—but if Vietnam seizes this moment to connect policy, finance, and knowledge, it can move faster than many regional peers. Through balanced incentives, transparent measurement, and smart financialization, ESG can be transformed from an obligation into a national competitive advantage.
When VAPEDCO collaborates with government agencies, business associations, and financial institutions, Vietnam’s private sector will not only meet the world’s “green” requirements but also actively shape its image as “sustainable enterprises, trusted partners, and responsible global citizens.” This will form the foundation of an independent, modern, and human-centered economy in the ESG era.
