The United States Mission to Vietnam, through the US Agency for International Development (USAID) and the Ministry of Planning and Investment (MPI), has announced a new initiative to spur private sector-driven sustainable and inclusive growth across Vietnam.

The new initiative promotes socially-conscious business behavior, known as Environmental, Social, and Governance (ESG) standards. Investors use ESG standards to measure how a company protects the environment, manages its relationships with workers, customers, and the communities where it operates, and employs transparent and accountable corporate governance.

“This new initiative will help small businesses improve their competitiveness and innovation, overcome constraints, and chart a path for sustainable growth and job creation and continue to contribute to Vietnam’s prosperity,” USAID Assistant Administrator for Asia Michael Schiffer said.

This first-ever ESG initiative for Vietnam targets small and growing businesses (SGBs), which account for more than 90 per cent of the country’s private sector, employ more than 50 per cent of the workforce, and contribute roughly 40 per cent of GDP.

USAID’s new ESG initiative will help SGBs adopt the appropriate standards. By 2025, it will deliver ESG technical assistance packages to 300 businesses, of which ten will receive additional assistance to pilot, implement, or scale their innovative ESG business concepts. The effort supports Vietnam’s Green Growth Strategy 2021-2030 and the Prime Minister’s Decision No. 167 on supporting private enterprises in sustainable business.

This ESG initiative is yet another example of how the US and Vietnam work strategically together to further sustainable, inclusive growth.

It forms part of USAID’s $36 million Improving Private Sector Competitiveness (IPSC) project, which removes policy, market, and enterprise-level constraints on the growth of SGBs, including those owned by women and members of vulnerable populations. The IPSC also works with Vietnam to foster an innovative and dynamic private sector that can compete globally and expand economic opportunities domestically.