Difficulties need to be overcome for businesses to systematically implement ESG

Although ESG (environment - society - corporate governance) is considered a "passport" for businesses to deeply integrate into the global supply chain, accessing green credit and implementing ESG systematically is still a challenge for most private businesses today.

ESG practice and the bottlenecks between capacity and finance

The three biggest barriers that make it difficult for businesses to implement ESG are: lack of technical capacity, lack of appropriate financial tools, and the absence of a certification system and transparent criteria to evaluate green projects. Many ESG initiatives such as energy saving, production improvement, and circular agriculture do not require collateral and only create long-term cash flows, making it difficult for businesses to access preferential capital.

At the same time, Vietnam has not yet issued a separate set of ESG criteria by industry, leading to a lack of uniformity in the assessment and appraisal of sustainable investment models.

Dr. Luong Thai Bao - Head of International Finance Department, Institute of Banking and Finance (National Economics University).

Dr. Luong Thai Bao - Head of the Department of International Finance, Institute of Banking and Finance (National Economics University) commented: “Digital transformation is not only a condition to support ESG but also a driving force for business growth. However, the major barriers today are still the lack of capital and the lack of a synchronous policy ecosystem between green and digital”. He said that banks should expand green financial services and promote digital transformation to help businesses improve their ESG governance capacity more effectively.

Sharing the same view, Mr. Sam Hanna - Southeast Asia expert on sustainable growth said: "Rapid growth and sustainable growth are not two opposing goals. ESG is the bridge that helps harmonize those two goals." According to him, ESG is not simply corporate social responsibility (CSR) but a strategic framework directly linked to business operations, from strategy, human resources to operations and finance.

Mr. Sam Hanna - expert from Asian Institute of Technology (AIT Vietnam).

However, the reality in Vietnam still has many challenges. The 2024 survey showed that 80% of businesses have ESG statements or orientations, but only 15% have full ESG reports; 76% do not have a clear ESG governance system.

The Unfilled Gap in ESG Talent

Another significant challenge is the gap in human capacity. ESG is an interdisciplinary field, requiring integrated thinking between environment - society - governance and digital transformation. However, according to a survey by the Ministry of Education and Training in 2021, only about 40.7% of higher education institutions cooperate with businesses in this field and only very few of them provide in-depth training on ESG.

Associate Professor, Dr. Le Duc Hoang - Head of the Department of Corporate Finance, National Economics University proposed to soon issue a "National Strategy on inclusive green and digital skills training" with pillars such as: National digital ESG skills framework, learning credits, scholarships and a flexible certification system according to international standards.

At AIT Vietnam, more than 1,000 CEOs of small and medium enterprises (SMEs) have been trained in ESG associated with digital transformation, many of whom are from women-owned businesses, receiving 100% scholarships. At the same time, AIT is also the first unit to implement an international ESG Master program in Vietnam recognized by the Ministry of Education and Training. In addition, AIT has coordinated with the Ministry of Planning and Investment, USAID and GIZ to implement ESG training programs in 10 disadvantaged provinces, and cooperated with industrial parks such as Amata Ha Long and international organizations to provide ESG training for workers and managers at manufacturing enterprises.

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Source: https://hanoimoi.vn/can-go-kho-de-doanh-nghiep-trien-khai-esg-bai-ban-707379.html