Greennovate SS2 #4 | Xu hướng xanh tái định hình doanh nghiệp Việt | Bảo Nguyễn & Federico

Key Concepts

ESG (Environmental, Social, Governance), Sustainability, Green Transition, Push Factors, Pull Factors, Regulatory Compliance, Value Chain, Brand Equity, Greenwashing, Leadership Commitment, Baseline, Competitive Edge, Sustainable Finance, ESG Reporting, Data Availability, Data Quality, Greenwashing, ESG Metrics, Scope 1, Scope 2, Scope 3 emissions, GRI Standards, ESG Rating, Corporate Sustainability Index (CSI), VNSI (Vietnam Sustainability Index).

1. Overview of Green Transition and ESG

• Main Topic: The episode focuses on the green transition journey for Vietnamese businesses and steps to build a comprehensive ESG strategy.
• Key Points:
  • 80% of Vietnamese businesses plan to implement ESG activities within 2-4 years (BWC Vietnam ESG readiness report 2022).
  • A significant gap exists between ESG expectations and actual implementation.
  • The discussion emphasizes "sustainability" as a more accurate term than the trendy "ESG."
• Push and Pull Factors:
  • Push Factors: Regulatory compliance (local and international), value chain pressures (export-oriented companies, customers, suppliers), stock exchange/investor demands.
  • Pull Factors: Efficiency gains, cost reduction, brand equity increase, competitive advantage.
• Examples & Statistics:
  • World Economic Forum: Sustainability practices can reduce operational costs by 9-16% and increase brand equity by 15-30%.
  • Price Water Cooper: 80% of consumers are more willing to purchase from companies with sustainability practices or eco-friendly products.
• Vietnamese Government Initiatives:
  • Amended Law on Environmental Protection (2020).
  • Decree 06: Focuses on GHG (Green House Gas) inventory and carbon emission reductions.
  • Decree 08: Focuses on EPR (Extended Producer Responsibility) for waste management.

2. Asia-Pacific Perspective on Sustainability

• Main Topic: Federico discusses the development of green transition and sustainability in the Asia-Pacific region, highlighting key differences between Vietnam and other nations.
• Key Points:
  • Asia's approach to sustainability varies based on economic models and priorities.
  • Hong Kong: Focus on sustainable investment and green funds.
  • China: Sustainability integrated into industrial policy (electric vehicles, solar panels).
  • Vietnam: Should focus on eco-friendly manufacturing to gain a competitive edge in the global supply chain.
• Employee Impact:
  • Employees in companies with transparent sustainability approaches are more motivated and have higher retention rates.
• Competitive Advantage:
  • Becoming sustainable is not just about compliance; it's about being part of the global supply chain.

3. Global ESG Trends and Competitive Landscape

• Main Topic: Bao discusses global ESG trends and their impact on the competitive landscape for Vietnamese businesses.
• Key Points:
  • EU regulations (EU Green Deal, CSRD, CSDDD, EUDR) are major drivers for Vietnamese companies.
  • CSRD (Corporate Sustainability Reporting Directive): Focuses on ESG reporting standards.
  • CSDDD (Corporate Sustainability Due Diligence Directive): Focuses on due diligence for the value chain.
  • EUDR (EU Deforestation Regulation): Impacts wood furniture exports from Vietnam.
  • Changes in US laws and the Omnibus proposal in Europe may slow down the process, but the trend is inevitable.
• Competitive Edge:
  • Vietnamese companies can gain a competitive edge by pioneering sustainability practices.
• Mindset Shift:
  • Exporting companies are increasingly aware that sustainability is not just compliance but a necessity for competitiveness.
• Leadership Commitment:
  • Leadership commitment is crucial for driving ESG initiatives and creating a clear vision.

4. Role of Associations in Supporting Vietnamese Businesses

• Main Topic: Bao discusses the role of associations like EuroCham and the French Chamber of Commerce in promoting the green economy in Vietnam.
• Key Points:
  • Sustainability requires a holistic approach involving various stakeholders.
  • EuroCham: Focuses on advocacy through working groups on green growth, renewable energy, water, sustainable cities, and circular economy.
  • French Chamber of Commerce: Focuses on practical solutions and actions to implement green transition.

5. Overcoming Challenges in ESG Implementation

• Main Topic: Federico discusses the challenges faced by Vietnamese companies in implementing ESG strategies.
• Key Points:
  • ESG is often perceived as complicated due to technical jargon and frameworks.
  • Simplification is key to making ESG accessible.
  • Companies should start by assessing their current ESG level and identifying weaknesses and strengths.
  • ESG implementation should be a step-by-step process integrated into day-to-day business operations.

6. Roadmap for Business in Vietnam

• Main Topic: Bao outlines a roadmap for Vietnamese businesses to embark on their green transition journey.
• Three Key Words:
  • Mindset: Leadership commitment and awareness.
  • Simple: Establish a baseline to understand the current state.
  • Action: Start with quick wins and low-investment initiatives.
• Five Stages of Green Transition:
  1. Awareness: Training, capacity building, and expertise development.
  2. Compliance: Meeting regulatory requirements.
  3. Baseline: Building reputation and trust through data transparency and disclosure.
  4. Competitive Edge: Implementing ESG initiatives and investments.
  5. Sustainable Finance: Accessing green financing opportunities.
• Green Transition Consulting:
  • Green Transition Consulting helps companies at various stages of their ESG journey, offering solutions and partnerships to fulfill different needs.

7. Specific Barriers for SMEs in Vietnam

• Main Topic: Bao and Federico discuss the specific barriers encountered by SMEs in Vietnam when implementing ESG.
• Key Challenges:
  • Lack of awareness and expertise.
  • Insufficient government incentives and access to sustainable finance.
  • Data availability, accuracy, and consistency.
• Support Needed:
  • Training, capacity building, and consulting.
  • Advocacy for government incentives.
  • Tools and technologies for data collection and management.
• SME Strengths:
  • Lean and simple structures allow for easier learning and pioneering in sustainability.

8. Industries with the Best Chance for Sustainability Leadership

• Main Topic: Bao and Federico identify industries in Vietnam with the best potential for sustainability leadership.
• Key Industries:
  • Manufacturing, agriculture, and construction (due to high emissions or export orientation).
• Transversal Industries:
  • Energy (renewable energy is crucial for achieving net-zero targets).
  • Logistics (important for Scope 3 emissions reduction).
  • Financial services (influence investment decisions).
• Manufacturing Importance:
  • Eco-friendly manufacturing can provide Vietnam with a significant competitive edge.

9. Real-World Examples of ESG Adoption in Vietnam

• Main Topic: Bao provides examples of companies in Vietnam that have successfully adopted ESG strategies.
• Examples:
  • Heineken Vietnam: 100% renewable energy for brewing, circular economy approach.
  • Vinamilk: Focus on sourcing, circular economy, and energy efficiency.
  • Century Fiber: Medium-sized enterprise in the textile industry, complying with international brand requirements through data transparency and reporting.

10. Green Transition Platform and Services

• Main Topic: Bao discusses the Green Transition platform and its services for supporting businesses in Vietnam.
• Key Points:
  • Partnerships and collaborations are essential.
  • Focus on awareness, compliance, and baseline establishment.
  • Reporting and rating help create reputation and trust.
  • Green Transition and CRIF offer complementary services:
    • Green Transition: Reporting.
    • CRIF: ESG Rating.
  • Green Transition helps companies implement ESG initiatives based on recommendations, including technical solutions and reporting standards.

11. Balancing ESG with Business Operations

• Main Topic: Federico and Bao discuss how companies can balance ESG with other business priorities.
• Key Points:
  • Prioritize based on industry:
    • Energy-intensive businesses: Focus on environmental aspects (E).
    • Service industries: Focus on governance (G) and social (S) aspects.
  • ESG aspects are often intertwined.
• AI Example:
  • AI is ESG-relevant due to energy consumption (E), data governance (G), and social impact (S).
• Governance First:
  • Bao believes governance should be prioritized as it provides the structure, mindset, and baseline for ESG implementation.
• AI and Sustainability:
  • The ICT industry represents 1% of global energy consumption, with AI contributing 2%.
  • The balance between AI's energy demand and its contribution to sustainability is still unclear.
  • Digital transformation and green transformation can potentially go hand in hand.

12. Employee Engagement and Company Culture

• Main Topic: Bao and Federico discuss the importance of employee engagement and company culture in driving ESG initiatives.
• Key Points:
  • Leadership commitment is crucial, but it needs to be cascaded down to employees.
  • ESG company culture training is essential.
  • Sustainability practices can increase employee retention and loyalty by 15-20% (BCG research).
• Three Bubbles for Sustainable Value:
  1. Business strategy.
  2. Sustainability strategy.
  3. Company culture.
• Internal Education:
  • Platforms dedicated to internal education can help train employees on ESG principles.

13. ESG Reporting and Local Frameworks

• Main Topic: Bao and Federico discuss ESG reporting and local frameworks for Vietnamese businesses.
• Key Challenges in Reporting:
  1. Data availability.
  2. Data quality (consistency and accuracy).
  3. Choosing the right reporting standards and frameworks.
  4. Avoiding greenwashing.
• Key Reporting Standards and Frameworks:
  • GRI (Global Reporting Initiative).
  • ESRS (European Sustainability Reporting Standards) from CSRD.
  • ISSB (International Sustainability Standards Board) from IFRS.
  • CDP (Carbon Disclosure Project), TCFD (Task Force on Climate-related Financial Disclosures).
• Vietnamese Frameworks:
  • CSI (Corporate Sustainability Index) from VCCI (Vietnam Chamber of Commerce and Industry) VBCSD (Vietnam Business Council for Sustainable Development).
  • VNSI (Vietnam Sustainability Index) from the Ho Chi Minh Stock Exchange.
• Baseline First:
  • Start with a simple baseline using available tools.
• Greenwashing Prevention:
  • Conduct technical assessments (LCA, EPD) to ensure accurate claims.

14. Important ESG Metrics

• Main Topic: Federico discusses important ESG metrics for SMEs to track.
• Key Metrics:
  • Environmental: Emissions (Scope 1, Scope 2, and relevant Scope 3).
  • Social: Workforce composition (gender balance, roles).
  • Governance: Certifications, policies, board composition (gender, roles, balance).
• Industry-Specific KPIs:
  • Specific KPIs vary depending on the industry (e.g., dairy industry: milk sourcing and traceability).
• GRI Standards:
  • The GRI standards are a huge document with hundreds and hundreds of closes and articles.
  • The most relevant KPIs from the GRI standards were selected to assess a company's ESG performance.
  • The selected KPIs were boiled down to 70 questions.

15. Reporting and Rating

• Main Topic: Bao and Federico discuss the purpose and complementarity of ESG reporting and rating.
• Key Points:
  • Reporting and rating serve different purposes but are complementary.
  • Green Transition focuses on reporting, while CRIF focuses on rating.
  • The choice depends on the end goal (compliance, marketing, baseline).
• Levels of ESG Assessment:
  1. Automated score/estimates (easiest, least reliable).
  2. Data collection from the company (more reliable, self-declared).
  3. Proper ESG rating with on-site audits (most precise, most expensive).

16. Top Three Things Businesses Should Do Right Now

• Main Topic: Bao and Federico share their top three recommendations for businesses preparing for sustainability and ESG.
• Key Recommendations:
  • Start: Decide to start the journey.
  • Sustainability is Growth: Approach sustainability as an opportunity for growth, not just a cost or compliance issue.
  • Sustainability is not a cost, Sustainability is not compliance, Sustainability is growth.
• Benefits of Sustainability:
  • Attract more customers.
  • Gain easier access to finance.
  • Stand out from competitors.
  • Consumers are also looking for companies that are sustainable.
  • Buyers are looking into companies that are sustainable.
  • Financial institution are looking into ESG factors when doing their lending decisioning.
• Long-Term Survival:
  • Companies that miss out on sustainability will be wiped out of existence in the medium term.

Synthesis/Conclusion

The video emphasizes that ESG and sustainability are not just trends but essential for the future success of Vietnamese businesses. The key takeaways include the importance of leadership commitment, starting with a simple baseline, taking action with quick wins, and integrating sustainability into company culture. The discussion highlights the need for simplification, collaboration, and a focus on long-term growth rather than short-term compliance. By embracing sustainability, Vietnamese businesses can gain a competitive edge, attract investors and customers, and contribute to a more sustainable future.