Part 2: ESG and Sustainable Transformation in Vietnamese Businesses

Nevertheless, some large companies and listed firms have taken the lead in incorporating ESG into their business operations. For example, Coteccons Construction Joint Stock Company has implemented sustainable development policies and comprehensive ESG reporting, thereby enhancing its credibility with international partners. The Social pillar remains the strongest, with a practice rate of 68%, supported by robust human resources and welfare policies that exceed legal requirements.

However, the Environmental pillar scored only 52%, reflecting difficulties in managing environmental impacts. The construction and mining industries face notable challenges due to high investment costs and a lack of technical support tools.

Implementing ESG offers significant practical benefits for businesses. Firstly, ESG helps optimize resources, reduce risks, and cut long-term costs. International studies indicate that companies adopting ESG practices often achieve profit growth rates 7–10% higher than traditional businesses.

Secondly, ESG facilitates international investment. For foreign investors, a company’s compliance with ESG standards is not just an important criterion but also a reflection of its commitment to sustainable development. Vietnamese companies in renewable energy, such as Gia Lai Electricity Joint Stock Company, have effectively leveraged this to attract funding from international organizations.

Thirdly, ESG enhances brand reputation and customer trust. Today’s consumers increasingly prioritize environmentally friendly, transparent, and socially responsible products. Businesses that adopt ESG early not only improve their image but also expand their market share both domestically and internationally.

Additionally, financial constraints pose a significant barrier. The upfront investment required for ESG solutions such as renewable energy, waste management, or production line upgrades can be substantial. The government can support these efforts by providing green loans, tax reductions, or establishing funds to assist businesses in executing sustainable projects.

Finally, raising awareness within the business community is crucial. Organizations and business associations should act as intermediaries, organizing workshops and forums to share best practices and successful ESG case studies. A notable example is the Ta Danh Agricultural Cooperative in An Giang, which has implemented a circular production model to increase productivity and minimize waste.

Transitioning to a sustainable business model through ESG is not optional but a necessary pathway for Vietnamese businesses to maintain their competitive edge in the globalized economy. However, this journey requires robust support from the government, organizations, and the business community itself. If the barriers of awareness, finance, and policy are effectively addressed, ESG will not only be a challenge but also a transformative opportunity for Vietnamese businesses to thrive in the international market.

By Minh Thanh