A panel discussion as part of the Việt Nam Innovation Summit held by InnoLab Asia and the HCM City Department of Science and Technology in HCM City on November 25 and 26. — VNA/VNS Photo

“The future of environmental, social and governance will be shaped by innovation and sustainable solutions,” Dzeneta Mulabegovic, strategic specialist, UNDP, Việt Nam, said.

Speaking at the Việt Nam Innovation Summit held by InnoLab Asia and the HCM City Department of Science and Technology in HCM City on November 25 and 26, she said: “Enterprises that pioneer eco-friendly technologies, circular economy practices, and renewable energy initiatives will lead the way in creating a greener and more sustainable future.”

While it is on the corporate radar in Việt Nam, different sources indicate that the actual level of ESG practice is still low, she said.

“As much as 80 per cent of businesses in Việt Nam might have made ESG commitments, or plan to do so in the near future.

“However, around 70 per cent of them indicate a lack understanding of the data required and to have none to very limited reporting. Only 24 per cent indicate to have a clear governance structure to drive the ESG commitments forward.

“Merely adhering to ESG-related legislation and regulations, or having some kind of ESG programme in place, falls short of genuine ESG practice.”

She said the desired benefits of ESG for people, planet and profit could only be achieved with an ESG strategy with clearly defined targets and metrics, with rigorous data collection and disclosure, and a strong ESG management framework in place.

She listed lack of knowledge, human resources and government regulation as among the challenges and barriers to advancing ESG in Việt Nam.

“We see the need for a comprehensive programme to work on capacity building for businesses, to support their access to the ESG and Impact investors, to develop clear regulatory frameworks for businesses and financial institutions, and to raise awareness about the importance of doing ESG the right way, with focus on scientific validity and real-world impact.”

The expectation is that both at the global and national level, the political commitment and regulatory pressure for corporate sustainability would continue to increase, as would the demand from potential investors and consumers. Access to financial services and investment, also in Việt Nam, is expected to increasingly become related to ESG performances, she said.

The future of ESG lies in data, she said, noting that “Harnessing the power of advanced analytics and technology will enable organisations to unlock deeper insights into their sustainability performance.

“Data-driven decision-making will become a strategic imperative for enterprises aiming to thrive in the age of sustainability. High-quality ESG data will be crucial to attract sustainable investments.”

Bert Grobben, founder and CEO of Budding Innovation, said: “Corporate innovation in Việt Nam must align with the country’s green transformation goals. Companies should be incentivised to invest in sustainable technologies and practices. This involves not only adopting renewable energy but also innovating in areas like waste reduction, sustainable supply chains, and green product development.”

They need to adapt to changing market dynamics that favour sustainability, including responding to consumer demand for environment-friendly products and services and adapting to international standards and expectations in sustainability, which could open up new markets and opportunities, he said.

Việt Nam has advantages in green transformation compared to Singapore thanks to its unique geographical and socio-economic advantages that could foster sustainable agricultural practices, green urban development, and offer diverse renewable energy potential, among others, he said.

“Embracing green transformation can open doors to new international markets, particularly in the west where there is a strong focus on sustainability.”

Firms need to adopt sustainable business practices, develop and market green products and services to meet the growing consumer demand for sustainable options, and engage in corporate social responsibility activities, he said.

Over the long term they need to allocate resources for research and development in sustainable technologies and practices that can provide a competitive edge, and build sustainable supply chains, he said.

They need to prepare for potential regulatory changes by proactively adapting higher environmental standards, he said.

In addition to businesses’ determination and efforts, the policy foundation is very important, he said, noting more cohensive, long-term policies are needed.

Mulabegovic said: “While currently lagging behind in ESG practice, Vietnamese businesses have the opportunity to leapfrog on their sustainability path.

“UNDP has developed the SDG Impact Standards and the Impact Measurement and Management Tool, which can guide you on this path.”

The annual summit titled "Innovation for a Greener Vietnam" featured four panel discussions where experts and corporate leaders shared insights on how innovation can drive positive ESG outcomes and fostering a sustainable and responsible approach to business and society among others.

Representatives from VinFast, Datbike and Ecotruck also shared their stories on producing and popularising electric vehicles in the country.

Five start-ups with ESG solutions made pitches at the event to raise funds.

The organisers also presented “Make the Future Green Award” to companies that have made outstanding contributions to sustainability. — VNS