Environmental, Social And Governance (ESG) – Business Model for a Strong and Sustainable Vietnam

Often heard in today’s businesses are a mix of strategic questions: What risks are we facing in order to move towards a sustainable future? Where should we put our attention? How do we attract, develop and retain the leadership, talent, and skills needed to drive success? And, critically, what opportunities can we identify to solve big problems, and create value in new ways?

The answers to many of these questions are with a concept called ESG, the focus of a seminar on the ESG (Environmental, Social, and Governance) - Business Model for Sustainable Development.

Since 2018, the Nordic Embassies in Vietnam (Denmark, Finland, Norway, and Sweden) have partnered up with Ho Chi Minh Academy of Political Studies in Hanoi and the Fulbright School of Public Policy and Management, Fulbright University Vietnam in Ho Chi Minh City, in conjunction with the Nordic Day 2022, with the aim to provide experiences from the Nordic countries on a variety of issues to Vietnamese audiences. This will be the fourth time the event takes place.

The purpose of this event is to showcase how Nordic governments interact with private sector on ESG and offer good examples and experiences on how it has positively affected the Nordic societies.

“For the past twenty years, Vietnam’s impressive economic growth and fast urbanization have led to serious challenges such as air pollution, congestion, water and waste management. I believe the rich experience of Nordic countries in implementing ESG will be an invaluable source of reference for Vietnam in the quest of searching for a model of sustainable development in the next decade”, said Dr. Nora Taylor, Interim Provost of Fulbright University Vietnam. 

In a joint statement, the Nordic Ambassadors to Vietnam emphasized that Covid-19 confirms that the threat of overlooking the planet and people’s health is real. No industry can afford to perceive itself as separate from the context in which it functions - whether environmentally, socially or in terms of how businesses and societies are governed.

‘ESG is about taking into consideration the environmental, social, and governance factors in an investment decision-making process. It is often used interchangeably with sustainable investing, socially responsible investing, and corporate social responsibility. These principles also apply to the government sector as their contribution is vital to achieving a vibrant economic recovery after the Covid-19 pandemic’.

‘One should also bear in mind that high-quality Foreign Direct Investment will look for developing economies that put sufficient emphasis on ESG-principles. Furthermore, in a modern globalized economy, consumer power is important, and consumers are increasingly asking for products made in countries that take ESG seriously’, stated the Ambassadors of Denmark, Finland, Norway, and Sweden in Vietnam.

The seminar attracts delegates representing Vietnamese government ministries, agencies, businesses, and a variety of Nordic experts from public and private sectors, academia, civil society to share experiences in presentations and panel discussions on how to work more concretely with ESG. They cover key benefits of ESG and issues such as sustainable and responsible business, climate-sensitive analysis, social dialogue, anti-corruption, public-private partnership.

While ESG is first and foremost a concept developed by and for the private sector, it addresses many issues that are indeed most effectively handled in a public-private partnership. Ensuring sustainable use of energy and resources, building up social protection schemes as well as fighting corruption are tasks where both public and private actors play essential roles.

In essence, these are all global challenges that all countries face – including Vietnam. For the labour market, in the wake of the 4th wave of the COVID-19 outbreak in Vietnam in 2021, key manufacturing/export industries such as textiles, footwear, furniture, etc. continue to face challenges in terms of shortage of labour and risks of disrupted supply chains, as well as exposed social and economic vulnerabilities for businesses and workers.

Alongside made commitments to strengthen the legal system through a new labour law and committing to ratify all core ILO conventions, as well as ambitious commitments during the Climate Summit (COP26) in Glasgow in November 2021, such as reaching net-zero emissions by 2050 and phasing out coal, the ESG-approach will offer answers to common challenges both for the public and private sectors.