The recent Autumn Economic Forum highlighted how environmental, social and governance (ESG) issues are becoming a key factor for business success. Understanding why many Vietnamese SMEs lag behind can help anyone thinking of joining or starting a small company.

Experts said at a forum in Ho Chi Minh City that Vietnamese SMEs struggle to adopt ESG because they have limited capacity. They also face significant data gaps.

Hoang Van Tam, head of the General Affairs Division at the Ministry of Industry and Trade, explained that these data gaps make it harder for businesses to access green financing and to meet technical barriers in international markets. Without reliable ESG information, banks and investors are reluctant to provide funding.

Hoang Manh Thang, deputy general director of business development at Ernst & Young Vietnam, warned that ESG credentials are increasingly becoming a competitive advantage in global supply chains. In B2B markets where price and quality are similar, a strong ESG track record could determine who wins a contract.

Hoang Van Tam recommended that companies adopt ESG in stages: first use existing electricity, water and fuel bills, then install low‑cost sensors on major equipment, and finally measure the carbon footprint of each product. Ha Huy Cuong, deputy general director of Nam A Bank, noted that only a few borrowers have enough ESG practice to qualify for green credit, but those that do can obtain green loans at preferential interest rates. This shows that even modest improvements can open cheaper financing and improve market position.

In short, limited ESG data and weak management systems are stopping many Vietnamese SMEs from accessing green financing and from gaining an edge in international supply chains. Taking simple, staged actions can start to close the gap and make these businesses more competitive.