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ESG HANDBOOK: A TOOL TO HELP BUSINESSES ACCESS SUSTAINABLE FINANCIAL RESOURCES

The ESG Implementation and Disclosure Handbook has just been officially launched to the Vietnamese business community. Through this handbook, businesses can access guidelines and reference materials to integrate ESG into their governance and operational strategies, thereby helping them manage risks and seize opportunities related to sustainable development (SD)..


ESG Investing

The goal of ESG investing is not only to seek profits but also to consider the sustainability and social responsibility of companies. ESG investors believe that companies with strong performance in these areas may have long-term growth potential and reduced risks.


The ESG Handbook is the first product of the project "Promoting Green Finance through Improved Disclosure of Financial Risks Related to Climate Change." The handbook provides climate-related recommendations for businesses to consider when identifying strategies to address emerging climate risks and opportunities. It will help businesses enhance their capacity for sustainable development (SD) disclosure, ensuring compliance with legal requirements and best practices both domestically and internationally.


According to Mr. Vu Chi Dung, Director of the International Cooperation Department, SSC, businesses that want to maintain and assert their position both domestically and internationally, as well as access sustainable capital, need to integrate ESG into their governance and operational strategies. Based on this, the SSC hopes that the ESG Handbook will serve as a useful guide for businesses to implement and develop ESG reports.


Mr. Fergus McBean, First Secretary for Climate and Nature at the British Embassy in Vietnam, emphasized the urgency of prioritizing ESG implementation by Vietnamese businesses. He affirmed that the prompt integration of ESG into business strategies and investments will help better meet the requirements of international markets, particularly in the UK and Europe, thus bringing significant benefits.

 

ESG investment is rapidly increasing as a tool to build resilience and mitigate risks in investments. Alongside non-financial reporting, ESG reports have helped investors identify potential risks related to environmental and social aspects that were previously overlooked by traditional mechanisms.

 

Mr. Michael Digregorio, Representative of the Asia Foundation in Vietnam, noted the increasing significance of climate-related risks for organizations and businesses globally, including financial institutions. These risks include physical risks, such as the recent Yagi storm, and transition risks, such as rising carbon taxes or carbon border adjustment costs. Additionally, Mr. Michael suggested that businesses should also seize opportunities, such as sustainability-linked loans with lower interest rates.

 

The implementation and enhancement of ESG disclosure practices present an opportunity for businesses to communicate and demonstrate the environmental, social, and governance impacts of their projects and operations. However, a survey conducted by EY in collaboration with the SSC, involving listed companies on the HNX and HOSE in 2021, revealed that over 50% of the surveyed companies admitted to facing difficulties in integrating ESG into their corporate frameworks.

 

Some of the challenges in implementing and disclosing ESG information include: identifying the key ESG topics for the business; ensuring consistency in solutions aimed at addressing critical issues; ensuring that the disclosed information is accurate and reliable; managing and meeting the growing demands of stakeholders for ESG disclosures. Additionally, small and medium-sized enterprises (SMEs) with limited resources often face issues such as a lack of time, knowledge, capacity, or funding to address the new and complex ESG-related challenges.


Download the ESG Handbook here!



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