To propel growth in the competitive race, businesses encounter distinctive opportunities and challenges, especially when:
- 90% of survey respondents indicate that the COVID-19 pandemic has altered their perspective on environmental concerns and the importance of sustainable consumption.
- 80% of Vietnamese consumers are willing to pay more for products and services offered by brands committed to environmental sustainability.
In the wake of COVID-19, with its lasting impacts on the environment, economy, and social fabric, the focus on sustainability has become more critical than ever.
Although the concept of ESG (Environmental, Social, and Governance) standards is relatively new in Vietnam, it's now seen as key to solid and sustainable development in all sectors.
Developing the ESG framework with a focus on ‘G’
Sustainable development goes beyond being a passing trend; it embodies a strategic mindset for constructing and expanding a business. From a corporate perspective, the ESG model is structured as G-S-E:
- G - Governance: This involves the process of managing a business effectively.
- S - Social: This encompasses relationships both inside and outside the company, including with partners, customers, the public, and employees.
- E - Environmental: This pertains to the impact on the environment and natural resources.
Why Begin with ‘G’?
Tran Hung Huy, Chairman of ACB (Asia Commercial Bank), explains that governance is the initial step in ESG implementation: “In business, the end goal can change over time, so it's important to keep moving in the right direction and not get lost. The “Governance” part ensures a company stays on the right path.”
Historically, ACB has emphasized the G and S elements since its early days. Recently, the focus on the E element has grown, with ACB intensifying efforts to cultivate a green corporate culture and promote environmental awareness and behavior change among its employees.
Incorporating the ESG model into a business strategy can help firms navigate market fluctuations and capitalize on opportunities for investment, collaboration, and expansion. Nielsen’s research indicates that environmentally committed brands have experienced significant growth, approximately 4% annually.
Additionally, several Free Trade Agreements, like the EU-Vietnam (EVFTA) and UK-Vietnam (UKVFTA) Free Trade Agreements, include ESG-related clauses, such as labor rights and green trade practices.
This underscores the investment community's interest and Vietnam’s and other developed nations’ commitment to sustainable development. Companies must align with these standards to reap the benefits of these FTAs and embrace new business opportunities in this evolving landscape.
Leadership’s Pioneering Role
In steering a business towards success, the vision of its leader, akin to a ship's captain, along with the business management process, serves as a vital compass.
A 2022 survey by PwC shows that most respondents (67%) prioritize the G - Governance aspect, followed by S - Social (67%) and E - Environmental (55%) aspects, underscoring the growing importance of these elements in business strategy.
ACB had been a forerunner in sustainable development, initiating its strategy a decade ago when the concept was still novel in Vietnam. Tran Hung Huy reflected: “A decade ago, ESG seemed far-fetched, even for our senior staff, due to concerns about the resources required for sustainable practices not aligning with their potential profits.
I envision ACB as an enduring enterprise, not just for the next 5-10 years, but for centuries. It’s an investment in the future that ACB is committed to.”
Recognizing sustainable development as an essential future trend, the Chairman initiated sustainable development projects in 2013 with his long-term investment perspective.
In their ESG journey, 93% of ACB employees support the bank's sustainable development initiatives, which are now integral to its overall strategy. Significantly, on October 27, 2023, ACB released its 2022 ESG report, marking its position as the first Vietnamese bank to issue a dedicated report on ESG.
Direct Action, Enduring Effort, Steady Progress
Implementing ESG requires unwavering dedication, collaborative effort, and continual engagement. It starts with fostering a culture of sustainability within the organization, contributing to economic growth, promoting responsible consumption, and ultimately disseminating a sustainable mindset to green the Earth and nurture a resilient society.
Creating a “green enterprise” may begin with small internal shifts like implementing energy-saving measures in offices, reducing single-use plastics, advocating for paper recycling, or adopting remote work policies to reduce commute-related emissions.
Starting at ‘Zero’ to Reach ‘Net-Zero’
Businesses begin their sustainable environmental impact from ground zero, accumulating efforts towards the “Net-Zero” emissions goal by 2050. Every significant journey starts with a single step.
ACB Bank's “Close to O” program, launched in 2013, is a standout example of corporate commitment to ESG. The bank distributed plastic-reduction kits to over 15,000 employees and a million customers, encouraging a shift away from single-use plastics in daily life.
Additionally, ACB has focused on digitalizing processes and reducing paper usage in banking operations. The bank has also engaged in direct actions such as clearing 300 tons of waste for its 30th anniversary, using recycled fishing nets for The Carbon Neutral Floors program, and participating in various local community programs.
To effectively implement ESG at ACB, educating employees about environmental issues is crucial. The success of leadership plans and strategies depends on a workforce that is equipped and prepared to execute them.
ACB sees its employees as the “assets of the business” and recognizes the need for continuous development to align with the bank's future orientation. Alongside investments in a quality work environment and professional development, ACB prioritizes environmental education and waste segregation training. This approach aims to encourage staff to adopt environmentally friendly behaviors.
Persistent Actions with Careful Evaluation
Implementing ESG is not a short-term goal but a long-term vision for decades, even centuries. ACB's release of its 2022 ESG Report after a decade underscores its commitment and careful approach to its initiatives.
Amid concerns about Greenwashing and related case studies, ACB continuously evaluates its environmental activities to ensure authenticity and effectiveness, avoiding potential public relations crises.
Building on its decade-long achievements, ACB recently partnered with DHL’s GoGreen Plus service to neutralize 100% of its international shipment carbon emissions through Sustainable Aviation Fuel (SAF). This initiative is projected to reduce ACB's CO2 emissions by approximately 14 tons over 12 months.
ACB's development strategy includes “green screening” for investment projects, favoring environmentally friendly initiatives and green credit sectors.
As Ms. Dinh Thi Quynh Van, General Director of PwC Vietnam, notes, “The Financial Services sector is crucial for the economy. By adopting ESG practices, financial institutions not only lead transformations within their sector but also drive ESG adoption across other industries through sustainable financing.”
Embodying a philosophy that harmonizes corporate profitability with social value, ACB is a frontrunner in ESG, driven by the ethos “What legacy do we leave for tomorrow?”
It’s clear that integrating ESG into business practices involves challenges and requires long-term, consistent effort.
Yet, ESG also acts as a powerful catalyst for innovation and differentiation, propelling businesses to create impactful and practical values for a sustainable future.