ESG IN VIETNAMESE ENTERPRISES: Paving the Path to Sustainable and Resilient Growth

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Case 1: Vinamilk

Case 2: FPT

Case 3: VPBank



Based on the previous research providing an overview of ESG implementation in Vietnam, InnoLab Asia continues to focus on conducting a more in-depth study on the current practices of ESG adoption among businesses in Vietnam. Our research aims to delve deeper into the practical implementation of ESG by businesses, examining the strategies, policies, outcomes, and challenges they face in this process.


According to the 2022 report on “ESG Readiness in Vietnam” by PwC, Vietnamese companies are increasingly embracing ESG practices. The report, based on a survey of 234 business representatives, highlights the following key findings.

The majority of surveyed companies (80%) have committed to or plan to commit to ESG within the next 2-4 years. However, there is a discrepancy between different types of companies. Foreign direct investment (FDI) companies show clear ESG commitments, while listed companies in Vietnam seem to adopt a “wait-and-see” approach, with 58% indicating future ESG commitments. Notably, 40% of private/family-owned enterprises have already set ESG commitments, reflecting a sense of responsibility among the next generation of Vietnamese businesses.

The report identifies knowledge gaps as a major barrier for companies yet to embrace ESG. Only 29% of survey participants expressed confidence in their leadership’s capabilities regarding ESG issues. Additionally, 43% of companies have not considered establishing ESG training programs, indicating the need for greater awareness and education on ESG-related matters.

Brand image and reputation (82% of survey participants) emerge as the primary motivators for pursuing ESG, followed by maintaining competitiveness (68%). Other factors include employee retention, talent attraction, and pressure from investors, shareholders, and the government.

While companies in Vietnam are making progress in their ESG journey, there is still a significant gap between expectations and actions. Currently, 66% of companies are implementing ESG programs, 49% have established ESG governance structures, and 35% actively involve their board of directors in ESG matters. However, only 28% have comprehensive risk indicators to monitor implementation progress and 71% lack sufficient knowledge to report on ESG data.

Recognizing the importance of sustainable development, the Vietnamese government has introduced regulatory measures. Circular No. 96/2020/TT-BTC, issued by the Ministry of Finance, mandates ESG reporting for public and listed companies in Vietnam. This reporting requirement covers various aspects, including greenhouse gas emissions, resource management, energy, and water consumption, environmental compliance, employee-related policies, local community responsibilities, and green capital market activities.


According to the draft project on the development of a carbon market in Vietnam conducted by the Ministry of Natural Resources and Environment, Vietnam is set to launch a carbon trade exchange in 2028. This exchange will facilitate the trading and exchange of carbon credits between Vietnam and regional and international markets. The operation of the carbon trade exchange is part of Vietnam’s efforts to reduce greenhouse gas emissions and fulfill its climate commitments, including the goal of achieving net-zero emissions by 2050 as agreed upon in the 26th United Nations Climate Change Conference of the Parties (COP26).

To prepare for the official launch of the carbon trade exchange, Vietnam will focus on developing regulations and mechanisms for carbon credit management, greenhouse gas emission quotas, and carbon credit exchange. The government will pilot the operation of the carbon credit market starting in 2025 and work on improving capacity and awareness regarding carbon market development.

Circular No. 17/2022/TT-BTNMT has already been issued, stipulating techniques for measurement, reporting, and assessment of greenhouse gas emissions and greenhouse gas inventory in the waste management sector.

Carbon credits are becoming scarce globally, and Vietnam’s abundant forest resources make it well-positioned to participate in the carbon credit market. It is estimated that Vietnam can potentially sell 57 million carbon credits annually to international organizations, with each credit fetching up to $5.

The establishment of a carbon trade exchange in Vietnam reflects the country’s commitment to addressing climate change, reducing greenhouse gas emissions, and capitalizing on its forest resources to participate in the global carbon market.


In Vietnam, the application of ESG (Environmental, Social, and Governance) practices by businesses is increasingly necessary for several reasons.

  • Joining the global supply chain: Many multinational corporations and global buyers prioritize working with suppliers who demonstrate strong ESG performance. By adopting ESG practices, Vietnamese enterprises can align themselves with international standards and requirements, making them more attractive partners for global collaborations and improving their chances of joining the global supply chain. To ensure growth and market expansion goals, businesses are compelled to adapt to this trend. If they lag behind, it will be challenging for them to sell products in key markets such as the US, and EU, and they risk losing their competitiveness and future market expansion opportunities.
  • Enhancing reputation and brand image: Customers and stakeholders increasingly value companies that prioritize sustainability, social responsibility, and ethical business practices. Implementing ESG initiatives allows enterprises to showcase their commitment to environmental protection, social well-being, and transparent governance. This, in turn, enhances their reputation, builds trust among customers and investors, and helps differentiate their brand in the market.
  • Meeting customer expectations: Consumers are becoming more conscious of their purchasing decisions’ environmental and social impacts. They seek products and services from companies that align with their values and demonstrate responsible practices. By integrating ESG considerations into their operations, enterprises can meet the evolving expectations of customers, attract a broader customer base, and foster long-term loyalty.
  • Compliance with regulatory requirements: ESG practices are increasingly becoming mandatory requirements imposed by regulators and stock exchanges. Governments worldwide are implementing stricter regulations related to environmental protection, labor standards, and corporate governance. Compliance with these regulations is essential for businesses to avoid legal issues, reputational damage, and potential penalties. In Vietnam, as well, the government is emphasizing the importance of ESG and may introduce specific regulations and reporting frameworks in the future, making it crucial for enterprises to proactively adopt ESG practices.

And especially, ESG practices contribute to the long-term sustainability of businesses – the survival choice. By addressing environmental impacts, social issues, and governance frameworks, enterprises can enhance their operational efficiency, mitigate risks, and foster resilience. ESG integration allows companies to manage resources effectively, reduce waste and emissions, improve employee well-being and productivity, and establish strong governance structures. These practices contribute to the long-term viability and success of enterprises.


Many Vietnamese companies have undergone a shift in their management mindset toward sustainable development and have incorporated ESG into their business strategies.

On July 18, 2022, the Ho Chi Minh City Stock Exchange announced a selection of 20 companies from the VN100 Index (comprising the 100 largest listed companies in the Vietnamese stock market) that were comprehensively evaluated across the three ESG criteria: environment, social, and governance. 

These companies are making significant investments in environmental, social, and governance-related activities. Detailed examples of their ESG implementation can be found in the table of exemplary activities applied by these companies.

Company Industry Environment Implementation Society Implementation Government Implementation
Vinamilk Dairy Products, Juice Invests in energy-efficient technologies, greenhouse gas emissions, utilizes renewable energy, waste management,   promotes sustainable farming (Vinamilk Green Farm), improving feed quality and management of material sources. Supports education, healthcare, and local economics. Prioritizes employee welfare and fosters a safe working conditions.Enhances the value chainwith farmers Maintains a well-structured board of directors, complies with regulations, and promotes ethical conduct and transparency.
Vingroup Technology, real estate, retail, and services. Sustainable business, long-term value, clean products, green buildings, sustainable waste management, green transportation, biodiversity preservation. Corporate culture, principles of conduct, social services (education, healthcare), environmental protection, resource optimization, cooperation with organizations/partners, and awareness promotion. Group Environmental Protection and Resource Optimization Division, standards and compliance, new measures, partnerships and initiatives, sustainable financing, transparency, and reporting.
Thanh Thanh Cong Group Agriculture, Manufacturing Products: eco-friendly product lines from recycled  and sustainable materials.Minimizing environmental impact: energy-efficient practices, renewable energy sources, recirculates water, treats wastewater, and aims to reduce CO2 emissions.  Employees: providing a safe working environment, healthcare, fair labor policies, and professional development opportunities.Community support: engages in corporate social responsibility activities, supports local communities, and provides scholarships and aid during crises. Law enforcement and transparencyFair treatment and transparency in transactions
VPBank Banking and financial services Promoting energy efficiency, green financing, and environmental risk management Community development activities and implemented responsible lending practices Transparency, risk management, and compliance
Phu Nhuan Jewelry Manufacturing; Fabricated Metal Product · Maximizing the value of product lifecycles, responsible resource usage, and waste reduction. Reducing greenhouse gas emissions and implementing emission reduction projects. Promotes a diverse, fair, and inclusive work environment, prioritizing employee well-being and welfare programs. Developing human resources and encouraging individual and organizational growth. Integrate beauty and humanity into their business operations through CSR initiatives. Emphasize transparency, integrity, and ethical behavior.Enhancing board effectiveness, ensuring compliance, and effective interaction with stakeholders.
Vietinbank Banking and financial services Various initiatives such as green financing and energy-efficient operations Community support and employee well-being Strong corporate governance practices, focusing on transparency, risk management, and compliance.
Coteccons  Construction  Green building practices and waste management Labor practices and community engagement Transparency, risk management, and compliance with regulations
FPT Technology Eco-friendly solutions, energy-efficient technologies, and renewable energy sources Supporting education and technology training, promoting digital inclusion, and engaging in corporate social responsibility initiatives. A board of directors overseeing operations, transparent financial reporting, adherence to legal and regulatory requirements, and an ethical framework.

Source: InnoLab Asia Research

 Top 20 Companies on VNSI – Vietnam Sustainability Index by HOSE 

Source: HOSE

Case 1: Vinamilk

Vinamilk contributes significantly to the sustainable development of the dairy industry and actively drives the process towards Net Zero 2050. Since 2012, the company has been publishing internationally recognized sustainability reports to accurately assess its advanced practices. In the strategic period of 2022-2026, sustainable development has become one of Vinamilk’s four key strategies. The company also invests heavily in building sustainable dairy farms, such as Green Farm, following sustainable agricultural practices. Its factories have undergone strong transformations, adopting advanced technologies and implementing circular economy principles early on to reduce emissions.

Thanks to annual solutions and initiatives to save water and energy resources, minimize waste, recycling, and reuse in production and farming, as well as the application of circular economy principles, Vinamilk has saved 237 billion VND from 2014 to 2021 (with 2014 being the first year the company reported this indicator). Although the figure of 237 billion VND may seem small compared to Vinamilk’s annual costs and profits, the immeasurable values resulting from the company’s persistent pursuit of sustainable development are significant.

Source: Vinamilk Report

According to Brand Finance, Vinamilk’s brand value has increased by 1.75 times in just four years, from 1.6 billion USD in 2019 to 2.8 billion USD in 2022, despite the Covid-19 pandemic.

Source: Brand Finance

“Sustainable development is no longer a choice, but a compulsory way for all businesses to survive and develop (Ms. Mai Kieu Lien CEO Vinamilk). 

In terms of environmental sustainability, Vinamilk has implemented various initiatives in its agricultural and dairy production operations. The company has embraced advanced technologies and sustainable practices, such as renewable energy utilization (including CNG, biomass, and solar energy) in its farms and factories. Vinamilk has also focused on resource conservation, adopting circular economy principles to minimize waste generation. The company has made significant progress in reducing CO2 emissions, working towards the goal of achieving net-zero emissions by 2050.

Vinamilk’s commitment to social development is evident through its collaborations with global sustainability organizations. It has worked closely with the Dairy Sustainability Framework (DSF) to assess and prioritize key aspects of sustainability within its operations and the Vietnamese dairy industry as a whole. The company has identified six priority areas, including product safety and quality, labor conditions, local economic development, greenhouse gas reduction, waste management, and animal welfare.

In the field of corporate governance, Vinamilk ensures consistent and rigorous implementation of sustainable development policies. The company has demonstrated its dedication to responsible business conduct and ethical practices. Additionally, Vinamilk has been ranked among the top sustainable development companies in Vietnam’s manufacturing sector for six consecutive years.

Vinamilk faced several challenges in 2020, particularly due to the impact of the Covid-19 pandemic. Despite these challenges, the company successfully ensured growth and stability in its production and business activities. It strictly adhered to new regulatory guidance on pandemic relief and prevention. 

Case 2: FPT 

Sustainable development orientation and Model Based on the business plan, FPT has developed a sustainable development orientation and strategy to balance three factors, including Economic Development, Community Support, and Environmental Protection. 

In 2022, FPT also won prestigious corporate governance awards such as: the Top 5 Large-Cap Enterprises with Best Corporate Governance in 2022 for five consecutive years; the Top 3 Vietnamese Publicly Listed Companies on ASEAN’s CG Score List; the Top 15 Enterprises with good financial management capacity in 2022.

Environment: As an enterprise operating in the technology sector, FPT almost did not witness any direct environmental imprints during its operation. However, it is an indispensable part of the corporate responsibility to monitor energy and natural resource use, utilize technology initiatives to reduce environmental impacts and respond to the pandemic situation and climate change. 

Society: As of 31/12/2021, FPT’s human resource scale increased by 21.3% over the same period, reaching 37,180 people. The technology sector continued to play a significant role with 24,068 employees, accounting for 64.7% of the total workforce, up 28.5% YoY. It was also the core force that contributed to expanding the Made-by-FPT ecosystem and creating. FPT has also been involved in corporate social responsibility initiatives, including supporting charitable organizations and disaster relief efforts. By prioritizing social impact, FPT demonstrates a commitment to contributing positively to society and fostering social well-being.

Governance: Management processes that meet and adhere to international standards. Constantly improving the efficiency of corporate governance and production management is the most effective way to ensure customer satisfaction, enhance competitiveness and provide sustainable benefits to stakeholders. Moreover, this is an indispensable tool for ensuring compliance and achieving FPT’s sustainable development goals according to international standards.

According to Mr. Pham Ho Chung, Director of Digital Transformation Consulting at FPT Digital, when building a digital transformation strategy, businesses need to integrate ESG goals and leverage digital transformation as a lever to implement ESG initiatives. Digitization and automation of operations help create sustainable activities and processes and improve the resilience and adaptability of enterprises. This, in turn, attracts the attention of customers, suppliers, and shareholders.

Case 3: VPBank

VPBank has made significant strides in integrating Environmental, Social, and Governance (ESG) principles into its operations, positioning itself as a role model for sustainable banking in Vietnam. With a long-term vision for sustainable development, the bank has implemented a clear strategy and an effective social and environmental risk management system. These efforts have not only brought sustainable values to VPBank itself but also created positive impacts on the community and the overall economy.

Source: VPBank ESG Approach, 2023 ESG Report by VPBank

Source: VBP ESG Report 2022

One notable achievement for VPBank is its recognition by Moody’s, receiving an ESG sustainability score of 2 out of 5. This rating reflects the bank’s strong foundation, clear strategy, and effective management policies, placing it on par with regional credit institutions in terms of ESG practices. VPBank has demonstrated a commitment to sustainable growth by diversifying its credit portfolio, gradually reducing exposure to carbon-intensive industries, and adopting international standards in social and environmental risk management. Moreover, the bank has actively supported customers, particularly during the COVID-19 pandemic, by offering interest rate reductions, debt restructuring, and favorable conditions for women-led businesses.

In terms of governance, VPBank has successfully developed policies and frameworks for ESG risk management, social environment risk management, and green credit. These initiatives ensure that the bank is well-equipped to address ESG risks and support a sustainable transition process. By integrating sustainability into its core business strategies, VPBank has not only enhanced its image among international financial institutions but also maintained a sustainable growth momentum that creates value for the bank, investors, and stakeholders.

Despite the progress made, there are still challenges for Vietnamese businesses in applying international ESG standards. Coordinating and sharing information among ministries, sectors, and credit institutions on compliance and sustainable development levels remains an area for improvement. Additionally, transparent disclosure of sustainability data and ESG compliance by Vietnamese enterprises is limited. To overcome these challenges, sustainable finance is recommended as a way to address ESG challenges, reduce investment risks, and support climate change response activities. Vietnamese businesses, including VPBank, are encouraged to integrate sustainable finance into their core strategies, paving the way for a greener and more sustainable future. ( According to The representative of VPBank)

VPBank’s journey toward ESG integration showcases its commitment to responsible banking practices and sustainability. Through its efforts, VPBank is setting new standards for the banking industry in Vietnam, leading the way for a more sustainable and inclusive economy.


When applying ESG (Environmental, Social, and Governance) to businesses, there are several challenges that need to be addressed. 

  • Human resource: According to survey results, 60% of businesses that have not made any ESG commitments are small and medium-sized enterprises (SMEs).   This also emphasizes the continuous need to enhance knowledge and capacity for ESG implementation within businesses, especially among senior leadership teams.  
  • Resource costs for businesses: Conducting ESG evaluations and reporting annually, as required by regulations for publicly listed companies in the stock exchange, incurs financial and human resource investments. Moreover, for effective ESG implementation, continuous monitoring and evaluation of performance indicators are necessary to determine a business’s position on the ESG spectrum. Engaging in ESG programs may lead to resource dispersion, impacting crucial resources such as finances, human capital, and technology. For businesses with limited resources, meeting all ESG criteria simultaneously can pose significant challenges. Consequently, at present, only a few large and publicly listed Vietnamese companies have embarked on comprehensive ESG initiatives, while smaller businesses face constraints in adopting sustainable development strategies due to technological limitations and the inability to swiftly replace outdated production technologies. Although these businesses demonstrate interest in certain corporate governance activities and social initiatives, such as community engagement, philanthropy, and green innovation, these social activities remain relatively small components within the broader ESG development framework.
  • Potential risks arising from inadequate experience and limited management skills: An effective ESG plan requires coordinated efforts across all levels of the organization. Any gaps or disruptions in the ESG implementation process can quickly propagate within the society, especially in the age of information technology. Suppliers, business partners, consumers, employees, and the wider community may express negative attitudes if a company fails to meet ESG criteria according to its publicized policies. This poses difficulties and inherent risks for businesses lacking experience and limited ESG management skills.
  • Multiple standards and indices : These standards include the Customer Satisfaction Index (CSI), ISO 26000, and the Sustainable Development Index (VNSI), among others. The diversity of these standards creates difficulties for businesses in terms of selection and implementation. The multitude of criteria and frameworks necessitates a thorough understanding and consistent adherence by businesses.

To overcome these challenges, businesses should aim for a comprehensive understanding of ESG frameworks, allocate adequate resources, and prioritize the development of ESG management capabilities. By addressing these challenges head-on, businesses can harness the benefits of ESG integration, improve their sustainability performance, and enhance their long-term competitiveness in a socially responsible manner.

If you’re still looking for a safe set of hands to help you take a step further into Vietnam investment, connect with InnoLab Asia for more in-depth, up-to-date, and personal investment advice. Contact us at to enhance your chance of business success! 


The research group engaged in discussions with related enterprises to gather relevant data.

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