Fresh initiative spurs private sector-driven sustainable and inclusive growth

The effort supports Viet Nam’s Green Growth Strategy 2021-2030, and the Prime Minister’s Decision 167 on supporting private enterprises in sustainable business.

USAID Assistant Administrator for Asia Michael Schiffer and MPI Vice Minister Tran Quoc Phuong announced the ESG initiative at a USAID-supported business forum in Ha Noi on November 22.

Deputy Minister of Planning and Investment Tran Quoc Phuong said Vietnamese businesses are coping with challenges to either catch up with new trends or lose their competitiveness and opportunity to participate in the global value chain amidst the impact of climate change and requirements of partners, Viet Nam's commitments to COP26, priorities in the international cooperation frameworks ASEAN, APEC on sustainable business, green production.

He was convinced that the initiative will help sort out excellent ideas, models and stories to encourage many businesses to actively adopt this method, towards a more sustainable economy.

Specifically, investors use ESG standards to measure how a company protects the environment; manages its relationships with workers, customers, and the communities where it operates; and employs transparent and accountable corporate governance. 

The initiative will help small businesses improve their competitiveness and innovation, overcome constraints, and chart a path for sustainable growth and job creation and to continue to contribute to Viet Nam’s prosperity.

This first-ever ESG initiative for Viet Nam targets small and growing businesses (SGBs) which account for more than 90 percent of Viet Nam’s private sector, employ more than 50 percent of the workforce, and contribute roughly 40 percent of GDP. 

SGBs play a critical role in Viet Nam’s socio-economic development and environmental sustainability. 

ESG is a recognition that business sustainability is multi-faceted, extending beyond environmental issues to people, resources, and systems. 

Businesses that invest in more energy efficient technology, create a good impact on communities, and consider input and feedback from people affected by the business achieve consistent growth and have stronger business models. The initiative will help SGBs adopt ESG standards. 

By 2025, the initiative will deliver ESG technical assistance packages to 300 businesses, of which 10 will receive additional assistance to pilot, implement or scale their innovative ESG business concepts./.