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VOV.VN - Moving beyond mere GDP growth, global capital now demands Environmental, Social, and Governance (ESG) standards for high-quality FDI in Vietnam. Yet, a clear gap persists between the country's ESG commitments and its actual implementation.

Current state of ESG implementation

ESG serves as a set of criteria evaluating corporate sustainability across three pillars: Environmental, Social, and Governance. No longer a mere compliance requirement, ESG has become an essential benchmark for investors assessing risk and allocating capital.

According to PwC’s 2025 survey on ESG progress in Vietnam, roughly 89% of surveyed enterprises have established or plan to establish ESG commitments within the next two to four years; 61% have formulated structured ESG strategies; and 41% have integrated ESG into their core business models. This indicates a marked shift in corporate awareness regarding sustainable development, moving from short-term growth mindsets toward long-term orientation. ESG is gradually becoming a central component of governance and investment strategy.

However, experts note that the proportion of businesses truly embedding ESG into core operations, governance, and long-term strategy remains low.

Dr. Tran Van Khai, Vice Chairman of the National Assembly’s Committee on Science, Technology and Environment, points out that Vietnamese enterprises face numerous hurdles in implementing ESG.

"ESG remains a new field in Vietnam. Although adoption has accelerated in recent years, the country still lacks a unified nationwide guidance framework and criteria. Financial constraints, technological limitations, and a shortage of high-quality human resources pose major barriers to corporate ESG practice," Khai says.

For small and medium-sized enterprises (SMEs), practicing ESG presents an obstacle and is often seen as a compliance cost rather than a strategic investment, while short-term profit pressures leave many hesitant to allocate resources for transformation.

In addition, Vietnam’s legal framework and supporting ecosystem for ESG are not yet fully developed, while fragmented guidelines and oversight mechanisms make it difficult for businesses to adopt ESG systematically, effectively, and in line with international standards.

Dr. Nguyen The Binh, Director of the Banking Science and Technology Research Institute at Banking University of Ho Chi Minh City, points out a wide divide between making ESG commitments and actually putting them into practice.

"About 60% of businesses report a lack of expertise due to numerous unapplied guidelines and frameworks; 46% cite enterprise size as an obstacle; and 28% indicate a lack of transparent information. Measuring and evaluating ESG performance in Vietnam is also difficult due to the absence of unified assessment tools and standardized criteria. Balancing environmental, social, and governance factors is a tough challenge, as ESG demands a comprehensive transformation of core internal elements, from corporate culture and strategic thinking to actual operations," Binh stresses.

Refining institutions to turn ESG into competitive edge

With international investors sharply focused on sustainable development and risk transparency, ESG has become an entry ticket for capital allocation.

Dr. Le Xuan Nghia, Director of the Center for Development Consultation (CODE), emphasizes that Vietnamese businesses have no choice but to pursue green growth and meet ESG criteria.

"Vietnamese enterprises rely almost entirely on commercial bank credit without alternative funding sources. Although global green capital and energy transition funds are abundant, domestic firms face very limited access. In an environment where investment capital grows increasingly cautious and international requirements become stricter, ESG is no longer a superficial bonus to polish profiles, but a mandatory condition to enter global supply chains and access long-term, low-cost capital," Nghia states.

As Vietnam integrates deeper into the global market, businesses must stop treating ESG as a compliance burden and instead leverage it as a competitive advantage through practical action. Craig Martin, Executive Chairman of Dynam Capital, says that ESG is a prerequisite for Vietnamese firms to access international capital. International investors no longer look at paper commitments; they evaluate actual execution, transparency, and operational capability.

Resolution No.10 on foreign investment development sets the goal of positioning Vietnam as a competitive destination for high-quality, medium- and long-term foreign capital. Translating the resolution into concrete policies that support and invest in effective ESG practice is key to making Vietnamese firms attractive to foreign investors.

Dr. Tran Van Khai outlined three immediate priorities to ensure genuine ESG adoption:

First, build tailored ESG criteria and implementation guidelines for specific business groups and sectors, with the Government and National Assembly guiding and supervising implementation.

Second, given the substantial investment costs of ESG, appropriate financial mechanisms must be created to help enterprises, especially SMEs, access green capital and sustainable finance. Third, train and develop high-quality human resources, a key factor enabling businesses to execute ESG in practice, from strategy building and operations to measurement and reporting, ensuring ESG moves beyond guidelines into concrete action.

Vietnam holds significant advantages in attracting international capital, but funds will flow to the most trusted destinations rather than the fastest-growing ones. Genuine and effective ESG adoption serves as the "pass" for both the economy and domestic enterprises to enhance competitiveness and draw high-quality FDI. Achieving this requires supportive state policies to help businesses narrow the gap between commitments and sustainable ESG practice.

The disparity between credit growth and deposit growth is creating a fierce underlying deposit raising race among commercial banks.

HÀ NỘI — While the capital market is underdeveloped, the banking system is burdened with the responsibility of supplying capital beyond its actual capacity, causing a fierce deposit raising competition and putting heavy pressure on the State Bank of Vietnam (SBV)’s monetary policy management.

Việt Nam’s economic development strategy for the 2026-2030 period sets an ambitious GDP growth target of 10 per cent or more per year.

According to detailed calculations from BIDV Research, to achieve this goal, the required average investment capital will be around US$250-260 billion per year. Looking further ahead to 2045, the economy's capital needs could reach $500 billion per year.

However, the Vietnamese economy still relies heavily on bank credit, with this channel consistently accounting for 50-60 per cent of the total capital supply.

Meanwhile, long-term capital channels such as the corporate bond market only account for a modest 3-6 per cent, and the stock market contributes about 10-18 per cent.

Phạm Xuân Hòe, former deputy director of the Institute of Banking Strategy, said that banks are simultaneously burdened with three heavy responsibilities: acting as payment intermediaries, providing short-term capital and financing medium- and long-term capital.

The consequence of this situation is that the balance sheets of the banking system are constantly overloaded, he noted.

Currently, about 80 per cent of deposits in Việt Nam have maturities of less than 12 months, while medium- and long-term loans once accounted for up to 47 per cent of total outstanding loans.

According to SBV data, as of June 15, credit growth reached 6.35 per cent, but deposit growth only reached 4.3 per cent. This 2 per cent gap forces banks to attract deposits in a variety of ways.

The disparity between credit and deposit growth is creating a fierce race to raise deposits among commercial banks. Meanwhile, depositors are easily misled by the varying interest rates offered.

While the listed interest rate on banks’ websites for a six-month term is only around 6 per cent per year, customers can actually receive 9-10 per cent per year through special conditions related to balances or certificates of deposit.

At one private bank, customers depositing VNĐ200 million or more are offered an interest rate of 8.5 per cent per year. Some even offered 9 per cent for deposits of VNĐ1 billion or more.

Chairman of Vietcombank’s board of directors Nguyễn Thanh Tùng pointed out the obstacles related to the imbalance of capital sources. According to Vietcombank's calculations, to achieve 10 per cent GDP growth, the investment rate needs to reach 40 per cent of GDP, but the average domestic savings rate is currently only 36.5 per cent.

If the growth of unofficial sectors is excluded, the accumulated domestic capital deficit is even more severe.

Tùng confirmed that his bank always adheres to directives on interest rate levels, so raised capital is currently insufficient to meet growth needs.

Although Vietcombank's loan-to-deposit ratio is below 70 per cent, a safe level compared to the SBV's 80 per cent ceiling, the bank still warned that there will not be enough capital for large projects in the future.

Tùng proposed raising capital from external sources by allowing the Ministry of Finance to issue international bonds to leverage national prestige and obtain the best possible interest rates.

He also expressed a desire for the capital market, especially the corporate bond market, to develop more rapidly.

The current size of Việt Nam's corporate bond market is only equivalent to about 10 per cent of GDP, significantly lower than other countries in the region such as Thailand and Malaysia.

SBV Governor Phạm Đức Ấn admitted that pressure to raise capital is making the central bank’s interest rate management difficult.

When capital demand is high but raised capital is limited, rising deposit interest rates will cause higher lending interest rates, directly impacting enterprises. To alleviate this pressure, the SBV is working to prevent commercial banks from engaging in extreme competition for capital mobilisation.

As for long-term solutions, the governor said the SBV is studying expanding the scope of eligible foreign currency loans serving investment purposes, especially for import businesses.

In addition, the amended Law on Credit Institutions allows commercial banks to manage collateral assets for businesses issuing bonds. This is expected to be a breakthrough, because many investors are currently hesitant about the collateral assets of corporate bonds, such as real estate, or assets formed from borrowed capital.

Only when banks participate in this asset management process can the bond market develop enough to alleviate the burden of medium- and long-term capital requirements in the banking system.

Vietnam’s current and future industrial expansion requires that industrial parks play a greater role in boosting productivity, resilience, and self-reliance.

The global economy is entering a period of heightened uncertainty, with increasingly rapid, complex, and unpredictable developments. Several international organizations have forecast that global economic growth will slow markedly in 2026 compared to 2025. Against this backdrop, countries are not only diversifying trade and investment relationships but also accelerating efforts to build more self-reliant economies supported by resilient and adaptable production capacity.

FDI continues to favor destinations that offer political and macro-economic stability, modern digital and energy infrastructure, strong connectivity, and manufacturing ecosystems capable of adapting to supply chain shifts, digital transformation, and the green transition. In this environment, Vietnam has strengthened its position as one of the region’s leading investment destinations through consistent and effective macro-economic policies.

The 14th National Party Congress set a strategic objective of achieving double-digit annual GDP growth during 2026-2030, with the goal of becoming a developing country with a modern industrial base by 2030. This direction was reinforced in Conclusion No. 18-KL/TW, issued on April 2, 2026, which identified industry as the primary engine of economic growth. The industrial and construction sector is targeted to expand by 12.3 per cent annually during 2026-2030, while manufacturing is expected to average 12.4 per cent annual growth.

Future industrial expansion, however, will be driven by a new development model centered on science and technology, innovation, higher value-added production, digitalization, green transformation, and deeper integration into global value chains. Achieving these objectives will require Vietnam’s industrial parks (IPs) and economic zones to be fundamentally repositioned, not only in terms of function and development model but also in the quality of investment they attract. Their role will increasingly be to support modern production ecosystems while enhancing productivity, resilience, and economic self-reliance.

Redefining industrial growth

IPs serve as the foundation for developing industrial clusters and integrated manufacturing ecosystems. Concentrating businesses within shared infrastructure reduces transaction costs, improves logistics efficiency, shortens project implementation timelines, and promotes greater specialization.

When fully connected with seaports, airports, railways, logistics hubs, research institutions, universities, and service-oriented urban areas, IPs become critical links in regional and global production networks. Stronger coordination between IPs in different localities would not only deepen regional integration but also redistribute manufacturing activities more efficiently and create new economic corridors.

IPs also remain one of Vietnam’s most important tools for attracting higher-quality FDI. Politburo Resolution No. 10-NQ/TW, issued on June 8, 2026, sets a target of integrating around 10,000 domestic companies into the value chains of foreign-invested enterprises (FIEs), including 500-1,000 Tier-1 suppliers. The development of IPs provides an important mechanism for implementing this strategy, by prioritizing investment projects involving advanced technologies, R&D, workforce training, and stronger links with domestic suppliers.

At the same time, IPs provide an ideal environment for implementing digital and green transformation. Digitalized management systems integrating land, construction, environmental, and energy data can streamline administrative procedures, lower compliance costs, improve incident response, monitor energy efficiency, facilitate data sharing, and strengthen real-time oversight.

Industrial symbiosis - where one company’s waste or byproducts become another company’s production inputs - can also help manufacturers meet increasingly stringent sustainability requirements in export markets. Successful international examples include Denmark’s Kalundborg industrial symbiosis model, South Korea’s transformation of the Ulsan industrial cluster, and Japan’s Kawasaki Eco-Town circular economy initiative.

Policy reforms

Vietnam has already introduced a series of important policies supporting IP development. Beyond the industrial development priorities established by the 14th National Party Congress and Conclusion No. 18, Resolution No. 29-NQ/TW, adopted in November 2022, calls for the development of large-scale modern eco-industrial parks (eco-IPs), expanded railway connections linking IPs with economic zones, airports, and seaports, and the development of coastal eco-IPs integrated with urban areas and major marine economic centers. It also encourages the industrial park-urban-service model.

These policy directions have been translated into concrete legal reforms. Government Decree No. 35/2022/ND-CP established the legal framework for a diverse range of IP models, including specialized IPs, supporting IPs, eco-IPs, high-tech IPs, and integrated industrial park-urban-service developments, while promoting industrial symbiosis.

The Law on Investment 2025 further decentralizes investment approval authority and introduces special investment procedures designed to accelerate project implementation.

More recently, under Official Letter No. 4551/NHNN-CSTT, dated May 29, 2026, the State Bank of Vietnam allowed credit institutions to exclude additional lending to IPs and export processing zones from real estate credit growth calculations in 2026 when monitoring lending limits. This measure is intended to facilitate greater financing for industrial infrastructure development.

Four priorities

Going forward, Vietnam should focus on four key policy priorities to accelerate IP development.

First, industrial infrastructure development should be aligned with major structural transitions, particularly through regulatory sandboxes that support the green and circular economy. In the digital era, data should be treated as strategic infrastructure alongside transportation, energy, and logistics networks, providing the foundation for smart governance, resource optimization, and higher-value business services. Wider adoption of AI, big data, the Internet of Things (IoT), and other digital technologies should improve infrastructure management, energy efficiency, environmental performance, and overall competitiveness, while cybersecurity and data protection must remain integral to the digital transformation process.

Second, policy should shift from expanding the number of IPs to improving their quality and effectiveness. As global supply chains are reconfigured and competition for investment intensifies, success will depend less on attracting more projects than on attracting high-quality investment capable of transferring technology, driving innovation, and strengthening links with domestic enterprises, thereby moving Vietnam higher up global value chains.

Third, investment promotion and incentive policies should evolve in line with Politburo Resolution No. 10 by moving away from input-based incentives toward performance-based support tied to investors’ commitments. This approach should encompass the full project lifecycle while encouraging stronger cooperation between foreign investors and domestic businesses.

Fourth, IPs should become more specialized and better integrated into value chains, evolving into comprehensive manufacturing ecosystems that connect anchor manufacturers, supplier networks, logistics centers, research and innovation institutions, workforce training facilities, financial services, and industrial support services within a coordinated development framework.

(*) Mr. Nguyen Duc Hien is Vice Chairman of the Central Commission for Policy and Strategy (CCPS), and Chairman of the CCPS Scientific Council.