Việt Nam, US begin new initiative to promote private sector-driven sustainable growth

November 22, 2022 - 15:24
The new initiative promotes socially-conscious business behaviour, known as Environmental, Social, and Governance (ESG) standards.


Representatives from US Agency for International Development (USAID) and Việt Nam’s Ministry of Planning and Investment attended on Tuesday the launching ceremony for the project to promote Environmental, Social, and Governance (ESG) standards. — Photo from the US Embassy in Việt Nam

HÀ NỘI — Việt Nam’s Ministry of Planning and Investment (MPI) and the United States Mission to Việt Nam, through the US Agency for International Development (USAID) on Tuesday announced a new initiative to spur private sector-driven sustainable and inclusive growth across Việt Nam.

The new initiative promotes socially-conscious business behaviour, 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.

USAID Assistant Administrator for Asia Michael Schiffer and MPI Vice Minister Trần Quốc Phương announced the ESG initiative at a USAID-supported business forum.

“USAID is pleased to launch this new initiative with the Ministry of Planning and Investment,” said USAID Assistant Administrator Schiffer, “which will help small businesses improve their competitiveness and innovation, overcome constraints, and chart a path for sustainable growth and job creation and to continue to contribute to Việt Nam’s prosperity.”

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

As such, SGBs play a critical role in Việt Nam's socio-economic development and environmental sustainability. ESG is a recognition that business sustainability is multi-faceted, extending beyond environmental issues to people, resources, and systems. Businesses that invest in more energy efficient technology, create a good impact on communities, and consider input and feedback from people affected by the business achieve consistent growth and have stronger business models.

USAID’s new ESG initiative will help SGBs adopt ESG standards. By 2025, the initiative will deliver ESG technical assistance packages to 300 businesses, of which 10 will receive additional assistance to pilot, implement or scale their innovative ESG business concepts. The effort supports Việt Nam’s Green Growth Strategy 2021-2030, and the Prime Minister’s Decision 167 on supporting private enterprises in sustainable business.

The United States and Việt Nam will celebrate in 2023 the 10-year anniversary of their Comprehensive Partnership and this ESG initiative demonstrates how the two countries work strategically together to further sustainable, inclusive growth in Việt Nam.

The new initiative is part of USAID’s $36 million Improving Private Sector Competitiveness (IPSC) project. IPSC removes policy, market, and firm-level constraints on the growth of SGBs, including those owned by women and vulnerable populations. IPSC works with Việt Nam to foster an innovative and dynamic private sector that can compete globally and expand economic opportunities domestically. — VNS