As ESG standards (Environmental, Social, and Governance) have gone from a nice-to-have to the new norm in the global business community, a set of criteria will be launched in Q3 by the Ministry of Planning and Investment for measuring ESG performance.

Trinh Thi Huong, deputy director of the Enterprise Development Agency (EDA) under the Ministry of Investment and Planning, remarked that large-scale enterprises in Viet Nam had actively incorporated ESG into their operations, while small- and medium-sized ones had just considered embarking on the ESG journey.

The good news is that their mindset is changing. In a recent survey conducted by EDA, 83 per cent of the respondents think ESG would improve their brand image and reputation, and 57 per cent think pursuing the notion is essential to comply with the Government's regulations.

"Those figures reflect a growing awareness and commitment to ESG in the business community," said Huong.

The deputy director also said the Programme on Support for Private Enterprises in Sustainable Business between 2022-2025 had highlighted the importance of a set of criteria for evaluating ESG performance among enterprises.

EDA, in the implementation of the programme, is working on a set of criteria to have it in place in Q3. The set will be available free of charge on the national portal for enterprises, together with a package to support them in the ESG transition.

The deputy director believes that the set would promote ESG practices by providing an ESG self-assessment tool for enterprises, which is a starting point for a course of action to transform their business model into ESG-centered.

Vu Chi Cong from VinaCapital remarked that ESG was gaining traction in the global business community since customers and investors had become more environment-conscious and set the bar high on social responsibility.

He said a failure to integrate ESG into enterprises' operations could mean dire consequences for their viability. He took Vietnamese enterprises operating in the footwear industry as an example.

"Vietnamese enterprises have lost many deals to their Bangladesh rivals just because Bangladesh has taken one step ahead on the ESG path," said Cong.

Cong also underlined the surge of ESG-promoting funds in the world. Under his estimation, the number of such funds has reached over 4,000 and their capital has amounted to hundreds of trillions of US dollar.

He urged domestic enterprises to quickly embrace ESG to leverage such a vast source of capital and improve their operational efficiency. For instance, the Vietnam National Textile and Garment Group has saved 30 per cent of its energy and water bills thanks to its factories reaching LEED Platinum standards.

According to the PwC Global Consumer Insights Pulse Survey in April, 96 per cent of Vietnamese respondents said they will pay more for products by companies with a reputation for ethical practices, whereas 93 per cent for products with sustainability cues. — VNS