Developed by the ministry's Department of Private Enterprise and Collective Economy Development, the British Embassy in Vietnam, the Asia Foundation and Ernst & Young Vietnam, the handbook serves as a guide for small and medium-sized enterprises (SMEs) on how to incorporate ESG criteria into their operations and report their ESG practices.

ESG is a corporate governance principle that stresses the importance of making good impacts on the environment and society as well as fair and transparent organisational governance.

With sustainability trends rising around the world in recent years, good ESG practices have become a gateway for SMEs to access capital sources and investments that prioritise environmentally friendly, sustainable projects, as known as 'green' finance.

At the conference, deputy director of the Department of Private Enterprise Development and Collective Economy Nguyen Duc Trung said, "Given the increasingly profound impact of globalisation and climate change, the application of ESG standards is not only an inevitable requirement, but also a guideline for the sustainable development of enterprises and the economy."

ESG implementation is not only a trend, but also an urgent requirement for SMEs to improve their competitiveness, attract international investment, expand export markets and meet the expectations of the international community, he added.

"The ESG Handbook is the result of close efforts and cooperation between domestic and foreign agencies and organisations," he said. "It will be a practical guide to help businesses better understand how to integrate ESG into their business strategies."

According to Nguyen Viet Long, partner for business consulting at Ernst & Young Vietnam, the majority of SMEs in Vietnam face challenges in adopting ESG criteria due to the complexity of the issues and the resource requirements to make the transformation happen, especially in markets where sustainable finance is still a new concept.

"The guidance on ESG disclosure given by the handbook is suitable for SMEs, making it easier for them to understand and start the adoption process," he said.

Guidelines on ESG implementation and reporting frameworks specific to the three sectors of finance, real estate and construction were introduced at the conference.

These sectors were given the priority since they have large impacts on the environment (greenhouse gas emissions, water use, waste discharge in real estate), on society (labour usage and occupational safety in construction), and large contributions to economic activities (such as exports and lending in finance).

Embracing ESG practices, a vital trend for businesses: workshop

Amidst the global trend of sustainable development and responsible business, it has become critical for enterprises to incorporate environmental, social and governance (ESG) practices into their operations to better integrate with the world market and gain a competitive edge, a workshop has heard in Ho Chi Minh City.