ESG practice requires breakthroughs

In recent years, the Party and the State have continuously issued major policies, directives and strategic orientations to promote green growth and the adoption of ESG (Environmental–Social–Governance) practices. Notably, the National Strategy for Green Growth for the 2021–2030 period, with a vision to 2050, emphasises that “green growth is an important component of sustainable development, ensuring rapid, efficient and sustainable economic growth while contributing significantly to the National Climate Change Strategy.”

A number of laws and decrees have also been promulgated, such as the 2020 Law on Environmental Protection and Government Decree 06/2022/ND-CP on greenhouse gas emissions reduction. These documents establish a comprehensive legal foundation for shifting the growth model from “brown” to “green”. They represent bold steps—creating pressure but also opening new opportunities for businesses.

However, according to the Viet Nam Chamber of Commerce and Industry (VCCI), the gap between policy and practice remains wide. A VCCI survey shows that 83% of businesses believe adopting ESG standards would improve their reputation and brand image, yet only 57% consider green and sustainable development a true necessity rather than merely a compliance burden; and up to 70% say they lack sufficient knowledge. Notably, only around 15% of Vietnamese enterprises have clear ESG strategies, with the rate even lower among small and medium-sized firms.

Experts attribute these challenges to the absence of detailed, uniform technical guidelines across ministries; insufficient financial incentives to encourage behavioural change; and limited local capacity, creating the situation described as “hot at the top, cold at the bottom.”

Therefore, to ensure green growth and ESG become key drivers of sustainable economic development, regulators must refine the legal framework and technical guidelines; promptly issue a national taxonomy for green projects as committed; and provide sector-specific guidance on measuring, reporting and verifying greenhouse gas emissions for enterprises of different scales. At the same time, strong financial and green credit mechanisms are needed, including consideration of temporary corporate income tax reductions for businesses with ESG certification, or domestic carbon border tax mechanisms in preparation for the EU’s Carbon Border Adjustment Mechanism (CBAM), which will apply from 2026. The domestic carbon market must also be accelerated ahead of its official operation in 2028.

Vietnamese enterprises themselves must create breakthroughs in strategic thinking, leverage internal strengths and proactively innovate to shift to a sustainable, green business model. This must be seen as a “revolution”, requiring bold thinking and decisive action. Only then can green growth and ESG truly become key drivers that move Viet Nam closer to its sustainable growth targets and the 2050 Net Zero commitment, while enhancing the competitiveness of Vietnamese businesses in both domestic and global supply chains.

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