The Vietnamese government planned to adopt a three-pronged strategy over the next three years, to encourage more of the country’s private firms to take on business challenges in the Environmental and Social Responsibility sector.
The fast expansion and industrialization of Vietnam have had a severe influence on the environment and natural resources.
According to the World Bank, Vietnam has emerged as the world’s fastest rising per-capita greenhouse gas emitter since the beginning of its market revolution, expanding at a rate of roughly 5% per year over the last 20 years.
Water demand continues to rise, while water production remains low, at around 12% of worldwide standards.
Unsustainable use of natural assets such as sand, fisheries, and wood may have a detrimental impact on long-term economic prospects.
On the upside, this present significant commercial opportunities for private enterprises that are willing to venture into the environmental and social responsibility sector.
A working group would coordinate the strategy’s activities in order to promote awareness among private firms, local governments, central agencies, and ministries.
The top policymakers recognised the complexities of the task at hand and agreed to work together with the private sector to create sector-related employment, improve living circumstances for low-income and vulnerable people, safeguard the environment, and help as many as possible to adapt to climate change in Vietnam.
While worldwide awareness of Environmental, Social and Governance (ESG) issues have grown significantly in the past few months, its influence on businesses and regulators in Vietnam is still limited.
Which is why the Vietnamese government has decided to support up to 10,000 private enterprises to embark on this journey, cited potential benefits like improving energy savings and increasing labour producviity amongst others.
Still, transparency of ESG performance by state-owned enterprises is a major concern. Furthermore, while ESG rules may be applied to private investments, institutional investors can do more to push public businesses to publish their ESG performance.
Vietnam’s three-pronged approach would involve the following steps:
1) Creating a long-term business support ecosystem. Encouraging more private enterprises to take up business challenges in the environmental and social responsibility domains through social media and social networks.
2) Supporting these businesses through technology support, subsidies of rental and digital transformation tools, investment capital raising, trade promotion, communication support, training and consultancy services.
3) Proper management of the promotion programme through annual evaluation and reporting to the central government. Adjustments to the programme could be made to ensure relevancy.
The three-pronged strategy would be funded through contributions and grants by individuals, private enterprises and government budget.
Vietnam, like many other countries, is vulnerable to issues of sustainability. Taking on these problems would require extensive technical expertise and human resources, as well as financial assistance, political will, improved collaboration and information exchange with the international community.
Terra Link Research 