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Green transformation: It's time to force businesses to "get involved"

Green transformation has become a mandatory requirement for businesses to achieve sustainable development

Just the surface

On November 19, at the discussion "Green transformation according to ESG - What do businesses do when resources are limited?" organized by Dan Tri newspaper, economic experts and businesses all agreed that implementing green transformation has become a mandatory requirement for businesses to achieve sustainable development.

Dr. Pham Viet Anh, Sustainable Business Administration, PhD student in sustainable development and diplomacy, said that a company in the US conducted a survey of about 2,700 businesses, the result was that only 24% were ready to make green transformation according to ESG.

In the European Union (EU), on the contrary, more than 75% were ready. This difference shows that ESG is mandatory, has been legalized in the EU, forcing businesses to do it, otherwise they cannot survive.

In Vietnam, Mr. Viet Anh said that although ESG has been talked about, it is only on the surface, not posing many multi-dimensional perspectives on both benefits and challenges. In addition to support, the State must have ESG-related laws, such as anti-greenwashing laws to protect decent businesses and invest properly in ESG.

From the perspective of businesses, Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA) commented that the majority of Vietnamese businesses are small and medium-sized, so the resources and conditions of businesses have certain limitations.

However, implementing ESG and green transformation have become a mandatory requirement for businesses to achieve sustainable development.

First of all, it is the market's demand. If businesses do not implement green transformation and ESG, they will not be able to sell their products, especially in export markets.

“Currently, green criteria have become a new technical barrier that Vietnamese businesses must implement.” - Mr. Hoa emphasized.

This does not happen synchronously in all products but in different product groups, or in other words, for an industry, sooner or later it will be the turn to implement ESG.

Mr. Viet Anh assessed that green transformation is a long-term strategy, requiring investment, not cost. Sustainable transformation is a marathon, requiring investment in internal and external foundations of the business, such as infrastructure, tangible assets, technology, factories and equipment, etc.

Recommending solutions for businesses in the green transformation process according to ESG, Mr. Viet Anh mentioned 3 keywords: do it for real, correct mistakes quickly and do not exaggerate.

As one of the quite successful businesses in green transformation, Phan Minh Thong, Chairman of the Board of Directors of Phuc Sinh Group, shared: “When Phuc Sinh does sustainable development, we think this is mandatory. According to customer requirements, Phuc Sinh is a manufacturing and sales unit and is required to do so.

"We also do not see this as a glorious issue, when converting to green because it is a normal activity that brings profits to the business. However, when looking at the process, Phuc Sinh has laid the first bricks for sustainable development in its industry." - Mr. Thong shared.

What capital sources are there for businesses?

According to Mr. Nguyen Ngoc Hoa, to implement green transformation, there must definitely be capital for investment, no one gives it away for free.

However, businesses must flexibly and skillfully utilize that investment capital from many sources. The first source is their own resources. Businesses need to balance their own capital as an investment for sustainable development, to maintain operations.

The second source is from State support programs, as I mentioned earlier, the city's interest rate support program has been applied. However, this program has the limitation of only being for businesses registered and operating in Ho Chi Minh City.

The third source is from funding from international organizations. However, to attract them, businesses need to have a brand, reputation, and a fairly large scale.

“On HUBA’s side, we have worked with the Ho Chi Minh City State Financial Investment Company - the focal enterprise assigned to this interest rate support program - to establish an interdisciplinary team to listen, promote, and promote the program between businesses that want to convert and lending units, thereby resolving problems, answering incomplete information, and promoting the process.” - Mr. Hoa suggested.

From the reality of his business, Mr. Phan Minh Thong said that when Phuc Sinh approached banks and investment funds, it was very favorable.

However, to receive the recent investment, Phuc Sinh also took 26 months to complete with a relatively complicated process, prolonged mainly due to the Covid period. The pandemic occurred, making it more difficult for organizations to access, and traveling to evaluate and survey was also difficult.

To transform sustainably from a weak sustainability stage, Mr. Viet Anh recommends that businesses need to comply with the law, ensure environmental factors, employee welfare, comply with independent audited finances, etc.

Next, businesses can choose to invest according to ISO 26000 standards, ensuring changes in thinking, processes, and management. Then, when there are financial resources, businesses can invest to go beyond compliance.

"Businesses in the green transformation process need to comply with responsibility criteria: profit responsibility (that profit must be legal), then compliance with ethics, environment, society; and finally charity responsibility.

Businesses doing ESG must first ensure economic profit responsibility, thereby demonstrating the ability to repay capital in order to attract capital from investment funds and banks." - Mr. Viet Anh emphasized.