A roadmap for Vietnamese SMEs to meet ESG standards

As sustainability requirements tighten across global markets, Vietnamese small and medium-sized enterprises (SMEs) are coming under growing pressure to align with environmental, social, and governance (ESG) standards. In response, the Agency for Private Enterprise and Collective Economy Development (APED) at the Ministry of Finance and the Global Reporting Initiative (GRI), with support from the Swiss Government through the State Secretariat for Economic Affairs (SECO) and in collaboration with international and local partners, is rolling out an ESG accelerator - the Sustainability Twin transition And Reporting (S.T.A.R.) Accelerator Program - to help businesses move from zero to structured ESG implementation within a six-month period.

The initiative was introduced at a recent forum entitled “Zero to ESG in Six Months: A Simple Roadmap for SMEs & Startups,” where ESG experts and financial advisors outlined how Vietnamese enterprises can adopt internationally-recognized standards in a pragmatic and commercially viable manner. Between 30 and 50 enterprises in Vietnam will be selected for the program, based on leadership commitment and the availability of dedicated internal resources.

Structural challenges for SMEs

Mr. Nguyen Cong Minh Bao, Vietnam Country Manager at GRI, emphasized that international investors are not merely interested in qualitative sustainability narratives but in measurable data.

Just as traditional investors evaluate companies through financial indicators such as cash flow, assets, and profitability, sustainable finance applies similar scrutiny to ESG performance. These data points increasingly influence investment decisions, credit assessments, and supply chain partnerships.

According to Mr. Bao, sustainability reporting is fundamentally about transparency, and demonstrates that a company systematically measures, manages, and discloses its impacts and risks in a credible manner so it can be more efficient and develop a competitive edge.

Vietnam’s export-driven economy has deepened its integration into global markets over the past decade. As trade ties with major partners such as the EU, the US, and Japan continue to expand, sustainability compliance is becoming central to maintaining market access. “ESG is no longer optional for companies participating in global value chains,” Mr. Bao told Vietnam Economic Times / VnEconomy. “It is becoming a prerequisite.”

He also noted that many Vietnamese enterprises still perceive ESG as either a corporate social responsibility (CSR) activity or an additional reporting cost. However, global trends suggest that ESG is evolving into a core management framework that affects supply chain positioning, investor confidence, and long-term competitiveness.

Headquartered in Amsterdam and embraced by more than 130 countries and territories, GRI is among the most widely adopted sustainability reporting standards worldwide. Some 90 per cent of major global corporations apply its standards in some form. The framework comprises universal standards, topic-specific standards, and sector standards addressing economic, environmental, and social issues, and sector standards tailored to high-impact industries.

Rather than producing lengthy reports, Mr. Bao argued that companies should begin by identifying material topics - the sustainability issues most relevant to their operations, risks, and stakeholder expectations. “ESG reporting starts with data,” he believes. “If you cannot measure your impact, you cannot manage or improve it, as the famous economist Peter Drucker said.”

SMEs account for roughly 98 per cent of enterprises in Vietnam and employ a substantial share of the workforce. Yet their structural characteristics often complicate ESG implementation. Limited financial capacity, insufficient technical expertise, fragmented data systems, and lean organizational structures can hinder systematic adoption.

At the same time, multinational buyers are imposing increasingly stringent and sometimes overlapping ESG requirements. Companies may face multiple questionnaires, various carbon accounting methodologies, and differing disclosure expectations.

Recognizing these constraints, the six-month accelerator aims to provide structured, practical support. Participating enterprises will undergo intensive training, receive digital tools for data collection and management, obtain ESG scoring and certification, and prepare simplified sustainability reports aligned with investor expectations. The objective is not to achieve perfection within half a year, but to establish foundational governance systems and baseline data that can be strengthened over time.

Dr. William L. Nolten, Region Asia-Pacific Director at the ESG Wings Investments JSC and the Golden Gate BCE Group, and Senior Advisor at Vietnam Partners LLC, underscored that sustainability ambitions must be grounded in economic realities. “Profit remains fundamental,” he said. “Without profitability, companies cannot invest in sustainability.”

He argued that ESG integration should enhance operational efficiency, reduce risk exposure, and strengthen long-term resilience. Measures such as energy efficiency improvements, waste reduction, and better governance structures can directly lower costs while improving access to finance.

Dr. Nolten also highlighted the concept of “double materiality,” which is gaining prominence in international reporting frameworks. This approach assesses both the impact of a company on environmental and social systems and the financial risks that sustainability-related issues pose to the company itself.

In global capital markets, ESG transparency is increasingly influencing lending decisions, bond issuance, and equity investments. Banks and institutional investors are incorporating sustainability criteria into credit evaluations, while impact investors are actively seeking credible ESG-aligned projects in emerging economies.

For SMEs, establishing a reliable ESG baseline can enhance negotiating power with lenders and strategic partners. Downstream corporations require trustworthy primary data from suppliers, particularly regarding emissions and environmental impacts. SMEs capable of providing transparent and traceable ESG data may gain preferred supplier status within global value chains.

Dr. Nolten emphasized that incremental improvements are often more feasible than sweeping transformations. By identifying high-impact areas such as energy consumption, emissions intensity or waste management, companies can prioritize targeted interventions that deliver measurable financial and environmental returns.

Data management remains one of the most practical barriers to ESG implementation. Many SMEs rely on manual record-keeping or fragmented spreadsheets, complicating accurate reporting and verification.

Ms. Truong Boi An, Sustainability Development Manager at Crif D&B Vietnam, pointed to CRIF’s digital ESG platform as a tool designed to streamline this process. The system integrates GRI-aligned questionnaires and provides automated scoring, benchmarking, and analytics across more than 30 industry sectors. “SMEs are often overwhelmed by the number of standards and KPIs [key performance indicators],” she said. “Digital tools can simplify data collection and translate ESG information into formats recognized by financial institutions.”

The platform generates ESG ratings, identifies performance gaps, and offers actionable improvement plans. Certification options can further enhance credibility when engaging with banks, investors, and multinational buyers. By standardizing data processes and reducing administrative burdens, digital solutions may lower compliance costs - a critical consideration for resource-constrained enterprises.

Long-term strategy

Vietnam’s commitment to achieving net-zero emissions by 2050 has placed sustainability at the center of its long-term development strategy. Regulatory frameworks are gradually evolving to incorporate ESG-related disclosure requirements, while greenhouse gas inventories, extended producer responsibility (EPR) mechanisms, and sustainable finance initiatives are gaining traction.

Within this policy context, the accelerator program represents a proactive effort to build enterprise-level capacity. By equipping SMEs with practical tools and structured guidance, policymakers aim to prevent sustainability requirements from becoming barriers to competitiveness.

Swiss support through SECO underscores the international dimension of Vietnam’s sustainability transition. Switzerland has been active in promoting sustainable finance and corporate transparency globally, and its cooperation with Vietnam reflects shared interests in strengthening ESG alignment within trade and investment relations.

A recurring message at the forum was the need to reframe ESG as a value-creation tool rather than merely a regulatory obligation. Companies that adopt sustainability practices early may improve operational efficiency, enhance brand reputation, strengthen resilience to regulatory changes, and build investor confidence. “ESG is about building trust,” Mr. Bao said. “Trust with investors, customers, and employees.”

While the six-month timeline may appear ambitious, experts clarified that it represents a structured starting point rather than a comprehensive transformation. The focus is on establishing governance structures, collecting baseline data, identifying material issues, and producing an initial sustainability disclosure aligned with international standards. From that foundation, continuous improvement can follow.

As global sustainability requirements continue to expand, Vietnamese SMEs face the dual reality of risk and opportunity. Companies that fail to adapt may encounter restricted access to finance or exclusion from supply chains. Effective ESG integration, meanwhile, can enhance competitiveness and resilience in an increasingly sustainability-driven market.

The accelerator signals a coordinated effort by policymakers and international partners to bridge capacity gaps and support enterprise-level transformation. In a rapidly-evolving global economy, sustainability performance is emerging as a core component of business strategy.

For Vietnamese SMEs, the question is no longer whether to adopt ESG, but how swiftly and effectively they can embed it into their operations. With a structured roadmap and institutional backing, moving from zero to ESG within six months may prove less an aspiration than a strategic imperative.

Box:

The Sustainability Twin transition And Reporting (S.T.A.R.) Accelerator Program is spearheaded by the Ministry of Finance’s Department of Private Enterprise and Collective Economy Development, in collaboration with the GRI, under the framework of the “Twin Transformation Center” project, with support from SECO. The program seeks to transform ESG reporting from a perceived compliance burden into a competitive advantage through structured training, hands-on mentoring, digital tools and a clearly-defined implementation roadmap.