Vietnam’s ESG Framework: Still Evolving – A Call for Greater Business Readiness in a Globalized Economy

By Y Advisory

As global markets increasingly prioritize sustainability, ESG – Environmental, Social, and Governance – has become a defining framework for evaluating business resilience, ethical governance, and long-term value creation. Across industries, ESG adoption is no longer optional but essential for access to capital, international partnerships, and supply chain inclusion.

In Vietnam, the ESG agenda is gaining attention, but the current policy landscape and implementation guidelines remain at an early stage. The lack of a unified national framework, along with limited regulatory enforcement, has made it challenging for businesses—especially small and medium enterprises—to identify practical pathways for ESG integration.

1. Vietnam’s ESG Policy Landscape – In Progress

The Vietnamese government has made notable commitments toward sustainable development, including its pledge to achieve net-zero emissions by 2050 and the adoption of the Green Growth Strategy. However, as of today, Vietnam does not yet have a comprehensive, enforceable ESG standard or national reporting framework in place.

Existing guidelines are fragmented and not always aligned with international best practices. This regulatory gap creates uncertainty for businesses trying to align with ESG principles, especially when operating across borders or within global supply chains.

2. ESG Adoption Among Vietnamese Businesses – Still Nascent

While some large Vietnamese corporations, particularly those with international exposure, have begun incorporating ESG into their strategy and reporting, ESG adoption across the broader market remains limited. Most companies still view ESG as a voluntary or peripheral initiative, rather than a strategic priority.

Limited awareness, capacity, and resources also hinder widespread adoption. Many businesses face challenges in understanding what ESG entails, how to measure performance, or where to begin.

3. Regional Comparisons – Learning from Peers in ASEAN

Compared to its regional peers, Vietnam is still in the early stages of ESG institutionalization:

• Singapore has implemented mandatory ESG disclosures for listed companies and integrated ESG into central banking and investment policies.

• Malaysia established the FTSE4Good Bursa Malaysia Index to encourage ESG transparency among public companies.

• Thailand offers ESG rating systems through its stock exchange and provides capacity-building programs for local businesses.

These countries are not only setting regulatory expectations but also creating market incentives for sustainable business practices. This puts them in a stronger position to access green financing and meet the rising demands of international buyers and investors.

4. Trade and Competitiveness Implications

As ESG standards become embedded in global trade, particularly in sectors like textiles, agriculture, aquaculture, and electronics, businesses that are not prepared to meet ESG-related requirements may face barriers to entry or even risk exclusion from critical markets.

With key export markets such as the EU and the US introducing supply chain due diligence and sustainability reporting regulations, ESG readiness is fast becoming a strategic differentiator for Vietnamese companies.

5. Strategic Recommendations from Y Advisory

While Vietnam’s national ESG framework continues to evolve, businesses can take proactive steps to prepare:

• Start with internal ESG assessments using globally recognized frameworks like GRI, SASB, or UN SDGs.

• Integrate ESG into core business strategy rather than treating it as a compliance checkbox.

• Learn from regional benchmarks and adopt good practices suited to sector and scale.

• Invest in capacity-building through training, expert consultation, and peer networks.

  
  

Conclusion

Vietnam is making progress on the ESG front, but there is still a clear need for stronger policy direction and clearer implementation mechanisms. In the meantime, companies that take early steps toward ESG alignment will be better positioned to compete, attract investment, and integrate into global markets.

Y Advisory remains committed to helping businesses develop practical, scalable ESG strategies tailored to their operational context and long-term goals — supporting a more competitive and sustainable Vietnamese economy.