Embracing ESG practices and incorporating ESG objectives into a company’s development strategy is seen as an investment for both the present and the future. This is not just the domain of large corporations, but also an inevitable development trend for small and medium-sized enterprises.
The questions surrounding the ESG framework, including where they originate, how to practice them, and the benefits they bring to businesses, were put forth at the launch event of the Branding Club and the workshop “Enterprise Perspectives and Approaches to ESG.”
The event took place on April 16 at the headquarters of Saigon Times Group in District 1, HCMC. Organized by the Branding Club, a division of the Saigon Times Club, the event was supported by Phuong Nam Soundproof Insulation Company Limited and Sagen Constructive Design Consultancy JSC.
An inevitable transformation
The concept of ESG (Environmental-Social-Governance) and sustainable development has long been discussed worldwide and is gradually becoming more popular among the Vietnamese business community these days. Many business executives believe that ESG practices are not a new trend around the globe, but they are still in their early stages in Vietnam. With the Vietnamese Government’s commitment to achieving net-zero emissions by 2050 and the transition toward green economies worldwide, ESG awareness is becoming increasingly important.
“Where there is a sense of responsibility, there is the beginning of ESG,” Vo Minh Nhut, head of the Branding Club and country president at NS BlueScope Vietnam, said at the workshop. He emphasized how businesses’ commitment to practicing ESG reflects their responsibility towards the environment, society, and the future generations.
Engaging in ESG practices and fostering sustainable development is not solely the domain of large enterprises; it is also a response from small and medium-sized businesses to evolving market dynamics.
Nguyen Hoang Nam, assurance financial services leader and ESG leader of PwC Vietnam, said that many businesses, especially large ones, have recently recognized the risks and opportunities associated with practicing ESG. According to global statistics from PwC, 55% of CEOs surveyed expressed a lack of confidence that their businesses could survive in the next 10 years if they continued operating as usual. This underscores the imperative for change and adaptation,” Nam stressed.
In fact, global consumer preferences are shifting towards sustainable products, prompting businesses to adapt their strategies. Despite the costs involved in ESG implementation, Nam considered these as investments, offering opportunities for market expansion, growth, and risk management.
In a brief interview on the sidelines of the workshop, Nguyen Thanh Tan, general director of Sagen Constructive Design Consultancy JSC, said that investing in ESG is not just about financial resources; it also hinges on the company’s culture, vision, and mission. Even small businesses can embrace ESG practices.
“When a company is driven by a genuine desire to serve humanity and society, results will come. Hard work bears good fruit,” he emphasized.
Echoing his view, Nguyen Thi Thu Thuy, deputy general director of Seazen Security Service JSC, said: “Whether big or small, every business should join hands together to head towards sustainable development.” She remarked that implementing ESG is challenging and demands a long-term vision, focused on lasting benefits.
Investment in values
ESG is not just a trend but a mandatory preparation for the future. It is important for businesses to adapt to changes to meet market demands and prepare for the future. “The early bird catches the worm,” said Do Huu Nhat Quang, director of GreenViet Green Building Consultancy Company, adding that this investment yields a multitude of benefits, both short-term and long-term.
According to him, embracing ESG is viewed as an investment rather than a cost. For instance, fostering a positive work environment and providing attentive employee care not only enhances workforce development for businesses but also decreases expenses related to talent acquisition and training.
Aside from the long-term advantages, ESG initiatives also prompt notable transformations in the current operations of companies. For instance, at NS BlueScope Vietnam, installing solar panels on the factory’s roofs has reduced electricity costs. Many potential long-term partners have visited the factory to witness the company’s ESG practices. “Out of every 10 visitors, around five have become our customers,” Nhut said. “By showcasing responsibility and committing to ESG implementation, favorable outcomes are bound to come. Patience is key,” he remarked.
Sharing insights on the sidelines of the event, Nguyen Cao Tri, general director of Ariston Vietnam, echoed his strong support for the idea that ESG implementation should not be viewed solely as a cost, but rather as an investment yielding tangible differences. “Major corporations bear the responsibility of investing in ESG to steer industries towards a more positive trajectory,” he added.
ESG strategies with human as central focus
Among the three pillars of ESG – environmental, social, and governance – the environmental factor is receiving more attention from businesses in Vietnam, according to Quang. Nonetheless, there is a need for increased attention to the social and governance factors. Some examples of ESG implementation in businesses are recycling plastic bottles and business cards, producing clothing made from coffee grounds, installing solar panels, planting trees around the office, constructing private workspaces for employees, and various other initiatives. Small actions could lead to giant leaps.
With his extensive experience advising numerous large enterprises, Nam underscored the vital role of training and communication on ESG within each company. Individuals within the organization need to understand what ESG entails, why it is necessary, and how it is implemented. “ESG activities should be undertaken based on awareness,” he said. Subsequently, businesses need a dedicated team to carry out specific tasks, with close guidance and supervision from senior leadership.
“When formulating an ESG implementation strategy, businesses must consider factors that align with the national context, the company’s specificities, and notably, the expectations of stakeholders. ESG adoption is not solely about fulfilling the company’s goals, but rather meeting the expectations set forth by stakeholders,” Nam said, elaborating that stakeholders encompass both external counterparts (customers and business partners) and internal collaborators (the company’s workforce.) “Personnel stand at the forefront of ESG implementation. Every employee should possess a comprehensive understanding of their responsibilities, and ESG endeavors necessitate collaboration and alignment across key departments,” he further explained.
Echoing Nam’s viewpoint, Nhut provided additional insights into NS BlueScope’s ESG strategy. There is a dedicated sustainability development department that oversees ESG activities and sustainable development initiatives across all countries. At the regional and national levels, NS BlueScope will have multiple functional departments overseeing issues related to health and safety, production safety, and innovation, under the supervision of leadership members. This means that ESG implementation requires guidance, supervision, and instruction from leadership levels down to departments, divisions and employees.
ESG implementation should be integrated into the business strategy and operations, with individual responsibility being crucial in ensuring the achievement of desired ESG goals. A recommendation put forward is to incorporate Key Performance Indicators (KPI) into ESG practices within each department to measure the effectiveness of implementation and operations on a fair basis.
