Hanoi (VNS/VNA) - The adoption of environmental, social andgovernance (ESG) considerations in private investments is evolving from arisk management practice to a driver of innovation and new opportunities thatcreate long-term value for business and society.

Patrick Haverman, Deputy Resident Representative, UNDP in Vietnam made thestatement at the ESG – a key for sustainable development conference held in Hanoion November 29. The seminar organised by Vietnam Investment Review (VIR)newspaper attracted the participation of about 100 guests from State managementagencies, experts, speakers and representatives of nearly 40 enterprises in Vietnamto discuss opportunities and challenges in applying ESG, as well as sharinginnovative solutions and new applications to promote and spread sustainablevalues in each business.

“Promoting ESG adoption throughout the investment value chain can encouragegreater private investment in sustainable development, resulting in greaterimpact,” he added.

He said that the various actors in the investment value chain, includinginvestors, banks and companies, had been increasing including ESG andsustainability information in their reporting processes. It would be importantto create an enabling environment for sustainability and integrated reportingto flourish.

He also cited the Business Commission on Sustainable Development (BCSD)saying: “There is no reason to see real alignment with the SDGs asanything else than good business. 

"Contributing to and achieving the SDGs offer a compelling growth strategyfor businesses and for the world economy as a whole."

And on the Council on Foreign Relations he said: “Achieving gender equity alonecould increase the size of the global economy by 26%” and 12 trillion USD annualbusiness opportunity could be unlocked if the SDGs were pursued in just fourmajor sectors or investment systems - food and agriculture, cities, energy andmaterials, and health and well-being.” 

The ESG efforts by the various private actors are consistent with theSustainable Development Goals (SDGs), but need to be leveraged further toachieve stronger outcomes.

Sharing the ideas, Le Trong Minh, the newspaper’s editor-in-chief said in thecontext of the economy entering a period of recovery and acceleration, thesustainable development orientation not only focused on the social aspect butalso became urgent for policymakers and the business community.

He said that it was impossible to underestimate any of the three pillars:economic, social and environmental in sustainable development, especially inthe context of a fast-moving world with increasingly strong commitments. Withstrict criteria, the business community needed to promote its role in theprocess of sustainable development.

Businesses would become more reliable and attractive in society and theirpartners if they pay attention and pursue ESG criteria, he added.

However, attendants also said that businesses still faced challenges toimplement sustainable development targets though they had been aware of theissue.

The lack of human resources, finance and the necessary knowledge to meet thehigh standards of ESG and the increasing commitments to the internationalcommunity, including the goal of net zero by 2050 would require the highesteffort from each enterprise.

In addition, businesses would also need open legal corridors and a morefavourable environment, as well as incentives and priorities from the State tobe able to overcome these barriers.

Removing obstacles

Nguyen Chi Hieu, Director, ESG Consulting, KPMG in Vietnam and Cambodia saidthat to implement ESG integration, businesses often faced difficulties to startthe process when ESG was still a new trend for Vietnamese firms. In addition,they also faced a lack of experienced personnel to implement this strategy notto mention the cost of implementation.

To solve these problems, businesses needed to re-evaluate their capabilitiesand immediately start integrating ESG, which encourages the selection ofappropriate criteria, he added.

Environmental risk criteria in Vietnam still have many differences compared toother countries, according to Hieu. If businesses know how to choose, they canfind commitments that can be implemented immediately or apply frameworksprescribed by the Government.

Bui Trung Kien, Deputy Chairman of CME Solar Investment JSC said: “In additionto businesses’ determination and efforts, the policy foundation is veryimportant, especially in the initial stages when enterprises apply ESG.”

Appropriately policies along with the timely removal of obstacles will be thefoundation and legal framework for businesses to feel secure and boldly investin applying ESG and new solutions, meeting requirements on the environment,society, corporate governance.

Nguyen Thi Thanh Nga, an expert on Sustainability and Green Growth atthe Department of Science, Education and National Resources under theMinistry of Planning and Investment said: “ESG is the approach that businessesneed to take in sustainable development, promoting green growth and reducingemissions.”

Since 99% of Vietnamese enterprises are small and medium-sized enterprises, sheproposed to promote the creation of value chains linking FDI enterprises withdomestic SMEs to achieve the Net Zero goal.

“In addition, energy transition is also an important issue for Vietnam in thefuture," she added.

"Therefore, it is necessary to promote efficient and sustainable energyuse, save energy, and reduce consumption in sustainable development. That isalso promoting sustainable, green and ESG development for businesses.”

From a business aspect, Nguyen Thi Ngoc Hue, Director of CorporateCommunication & External Affairs at AEON Vietnam said AEON Vietnam annuallyconducted activities to connect, accompany and support Vietnamese businesses topromote and introduce local products to consumers. The firm also supportedlocal suppliers to meet export standards to international markets, especiallyJapan, through AEON's retail system. By the end of 2022, the proportion ofdomestic goods in AEON Vietnam's retail system would reach 80%.

“With persistent and consistent efforts over the years, AEON Vietnam has spreadsustainable consumption habits to millions of Vietnamese consumers and willcontinue to accompany partners to promote green consumption, contribute tobuilding a sustainable Vietnamese retail market,” she added./.