When ESG Determines the Fate of the Supply Chain

ESG: A New Pressure in End-to-End Operations
From a concept rooted in ethical guidance, ESG has now been deeply embedded into the operational strategy of major corporations' supply chains. The three pillars of ESG—Environmental, Social, and Governance—are no longer optional; they are mandatory for companies seeking access to preferential capital, large partners, and international logistics systems.
Within the supply chain, ESG is not only applied to anchor firms but extends to suppliers, transportation partners, bonded warehouses, and even third-party inspection units. Continuity and transparency have become vital standards, requiring every link in the chain to demonstrate measurable, verifiable, and provable performance. The absence of ESG compliance at any point can break entire export contracts or disqualify companies from global supply chains of major corporations.

Green Supply Chains: From Traceability to Execution
A green supply chain is not just about declarations—it must be backed by traceability systems and clearly defined operational procedures. These requirements are compelling Vietnamese businesses—especially in agriculture, textiles, and electronics—to restructure their entire logistics systems for transparency and emissions reduction.
Traceability technologies are shifting from simple QR codes to integrated blockchain and IoT–digital twin systems, ensuring that data cannot be tampered with. These tools not only facilitate audits but also help build trust with customers. Additionally, operations must be energy-efficient, transition to electric vehicles, minimize packaging waste, and use recyclable materials. Notably, many companies have begun calculating Scope 1, 2, and 3 emissions—a mandatory requirement for exporters to the EU by 2026 under the Carbon Border Adjustment Mechanism (CBAM).

Reports and Certifications – Critical Standards
In the ESG ecosystem, sustainability reports and international certifications are no longer “illustrative documents” but “passports” for companies to enter the global playing field. Reporting frameworks such as GRI, SASB, and TCFD are being scrutinized by investors, banks, and partners during collaboration assessments.
In supply chains, this means even SMEs must provide transparent data on operations, emissions, and labor conditions, along with specific roadmaps to improve ESG indicators. In Vietnam, several pioneers have obtained certifications like ISO 14001, WRAP, EPEAT, and FSC. However, according to SCMR statistics, most small businesses still lack independent audit mechanisms, making them vulnerable to low assessments within international value chains.

ESG must not be a “polished pitch in annual reports” - it must be integrated into supply chain KPIs. Incorporating ESG into supplier assessments, transportation systems, and logistics capabilities is a strategic transformation step that delivers tangible advantages.

ESG is no longer a “moral choice”—it is a mandatory standard for any enterprise wishing to survive and grow within the global supply chain. Changes in trade policies, customer demands, and financial benchmarks are making ESG a prerequisite for market access, investment, and strategic partnerships.
However, to move ESG beyond presentation slides, businesses need well-structured internal transformation strategies—from workforce training and measurement systems to the adoption of verification technologies. Support from regulatory agencies is equally crucial—through clear legal frameworks, financial transition support, and the promotion of a transparent certification ecosystem.
In short, if Vietnamese businesses know how to leverage ESG effectively, they won’t just “meet the minimum standards”—they can lead the game in global supply chains, where transparency, accountability, and sustainability are more valuable than low prices.

By Phong Le