From compliance to strategy: ESG criteria gaining ground

From compliance to strategy: ESG criteria gaining ground

Amid intensifying global Standards, rising stakeholder expectations, and Vietnam's national climate pledges, environmental, social, and governance considerations are now viewed as a strategic imperative for long-term business resilience.

PwC Vietnam on September 23 released its 2025 ESG Progress Tracker Report, reflecting a clear shift among local enterprises from awareness to action in environmental, social, and governance (ESG) practices. The findings suggest that Vietnamese businesses are entering a new phase of ESG maturity.

From compliance to strategy: ESG criteria gaining ground, Photo: Shutterstock

The report, based on a survey of 174 corporate representatives and building on PwC's 2022 ESG readiness study, showed that momentum is accelerating.

According to Nguyen Hoang Nam, ESG leader and partner of Assurance Services at PwC Vietnam, 89 per cent of respondents have either already made ESG commitments or plan to do so within the next 2-4 years, a notable increase from 80 per cent in 2022.

The proportion of firms without ESG plans has nearly halved to 11 per cent, while more than half (54 per cent) of surveyed enterprises confirmed that they have already implemented ESG measures.

"Vietnam's economy is heavily export-oriented and dependent on markets such as the EU, US, and Asia. New taxes or regulations in these jurisdictions present significant risks for Vietnamese firms. ESG should therefore be regarded not only as compliance, but also as a risk management strategy essential for safeguarding competitiveness in global supply chains," Nam said.

Adoption, however, varies across business segments. Foreign-invested enterprises lead the way, with 71 per cent already implementing ESG commitments, guided by international standards. Listed companies are closing the gap, with 57 per cent rolling out ESG measures under investor and regulatory pressure. Meanwhile, progress is slower among private or unlisted firms: only 27 per cent have implemented ESG, and 23 per cent still have no plans in place.

The drivers of ESG adoption are also becoming clearer. Compliance remains the dominant motivator, cited by 70 per cent of respondents, followed by stakeholder pressure (40 per cent) and board-level direction (39 per cent). Just 16 per cent see cost reduction as the main driver, while 25 per cent point to access to finance.

A POSITIVE SHIFT

PwC's report further highlights that 45 per cent of CEOs in Asia-Pacific believe their companies will not survive the next decade without transformation. Yet, challenges differ depending on maturity levels.

"From being a relatively new concept, ESG has become a practical requirement tied directly to survival and growth. Despite challenges, from resources and awareness to transparency, the shift is irreversible," Nam remarked. "Vietnamese businesses must now see ESG as core to corporate strategy. Proactive investment, meaningful action, and transparency will not only meet international market requirements, but also unlock green finance, boost efficiency, and strengthen trust with customers, investors, and communities."

The report launch was followed by a panel discussion on accelerating ESG for growth, gathering policymakers and corporate leaders to debate how it can generate measurable impact and long-term value in an uncertain global economy.

Lang Trinh Mai Huong, deputy director general of the Department of International Cooperation at the State Audit Office of Vietnam, highlighted a positive shift, noting that businesses are no longer confined to symbolic gestures but are moving towards proactive ESG adoption.

"It is encouraging that Vietnamese companies no longer treat ESG as a box-ticking exercise, but as a long-term strategy tied to real benefits. This shift strengthens risk management and cost efficiency, while opening opportunities to integrate more deeply into global value chains and enhance Vietnam's international standing," said Huong.

She stressed that closer alignment with international standards would help Vietnamese firms mitigate regulatory risks in major markets such as the US, and also enhance their investment appeal and unlock greater access to green finance. "When weighing costs against benefits, companies have every justification to pursue a sustainable strategy," she added.

Huong further said that the Ministry of Finance is working on revisions to accounting standards that will incorporate IFRS S1 and S2 on sustainability and climate-related disclosure. Once in place, these measures are expected to strengthen transparency and provide businesses with a more reliable basis for strategic decision-making.

At the same time, Huong cautioned that some priorities are still being overlooked. "Talent attraction and brand building are not yet given due weight. Human resources may be difficult to measure, but they are at the core of ESG. Without investing in people, ESG cannot evolve into a sustainable source of competitive advantage," she said.

CLEAR BENEFITS

From the business perspective, Pham Hong Diep, chairman of Shinec JSC, noted that ESG reporting generates real value rather than serving as mere paperwork. Transparent disclosure, he said, is particularly effective in attracting overseas investors.

"Around 70 per cent of investors today closely monitor ESG practices.With transparent reports, they make decisions more quickly and commit capital sooner," he said.

The financial benefits are equally clear. "Companies can cut borrowing costs by 1-2 per cent, accelerate disbursement, and lower long-term expenses. These are fundamental and lasting advantages," Diep explained.

For Shinec, adopting ESG has helped standardise compliance across industrial parks, mitigate labour and environmental risks, and nurture a more professional workplace culture. Ecological requirements are made public from the very beginning of new projects, reinforcing credibility.

"We are committed to transparency and engagement with local communities. This approach has earned strong public support, reduced unforeseen costs, and bolstered our reputation," he added. On the social front, Shinec actively encourages workers and residents to participate in community activities, thereby strengthening loyalty, reducing staff turnover, and enhancing its image.

David Falcon Adasme, ESG director at VinFast, noted that the company has rolled out a wide-ranging programme of energy efficiency initiatives across its manufacturing facilities.

"One of its key ESG initiatives is the implementation of a company-wide energy efficiency programme, as energy is considered a critical area in realising our net-zero commitment," said Adasme.

The company switched off corridor lights and those above production lines already equipped with local systems in numerous workshops.

For chiller and HVAC operations, measures included adjusting fan frequency, switching off selected canteen air conditioners, and setting appropriate chiller operating temperatures in production areas.

At the production equipment level, efficiency was boosted through timer functions for oil pumps in the stamping workshop, improved boiler performance in the painting workshop, and enhancements to cooling systems.

"As a result, we were able to cut electricity consumption by more than 2.7 million kWh over the past year, equivalent to nearly 1,800 tonnes of CO₂ reduced. This generated cost savings of around $228,000," Adasme said.

Dinh Thi Quynh Van, chairwoman, PwC Vietnam This year, PwC published the ESG Progress Tracker in Vietnam, assessing the progress made in translating environmental, social, and governance commitments into concrete actions. Over the past three years, the attention and commitment of Vietnamese businesses to ESG have increased significantly. This is a positive signal, reflecting a profound shift in corporate governance thinking, where ESG is no longer seen as mere compliance or an optional choice, but as an integral part of long-term development strategies. Such transformation is not occurring in isolation. It is part of a broader global economic landscape. Around the world, ESG has been receiving growing attention from governments, communities, and financial markets. PwC's latest global research, Value in Motion, highlights that trillions of US dollars are being reallocated into new, sustainable value sectors. This is not just a trend, but one of the most significant transformations of our time, driven by three irreversible forces: climate transition, technological breakthroughs, and shifting societal expectations. For Vietnam, this global transformation aligns seamlessly with the nation's green growth agenda, opening unprecedented opportunities while also issuing an urgent call to action for every enterprise. The Vietnamese government's green development orientation and the evolving legal framework are moving in step with global shifts. This creates a rare opportunity for businesses not only to affirm their role within the community, but also to enhance competitiveness and position themselves in the green future. We are standing at a pivotal moment, where every decision by corporate leaders will shape the internal development of their businesses and determine the competitiveness and sustainable prosperity of the entire economy. With impressive GDP growth among the highest in Southeast Asia and forecasts pointing to continued regional leadership in the years ahead, sustainable development will be a vital driver for Vietnam to achieve its ambition of becoming a high middle-income country by 2030. This is both a shared responsibility and a shared opportunity. Through collaboration between businesses, policymakers, and financial institutions, we can transform ambition into action, ensuring that Vietnam's remarkable growth story continues as one of sustainability and leadership in a world where value is constantly in motion. The road ahead requires the collective will of the entire business community. Sustainable development is no longer a choice, but the inevitable path to realising Vietnam's development aspirations.

VIR