How to Effectively Apply ESG in Businesses?
In the context of sustainable development becoming a global trend, businesses in Vietnam are increasingly interested in ESG. However, many are still confused about where to start and how to implement ESG effectively while working within limited resources.
Let’s explore with IBS how to apply ESG effectively in businesses through the article below.
What is ESG and why do businesses need to care?
ESG stands for three key elements in modern corporate governance:
- Environmental: Minimizing environmental impact such as saving electricity, water, reducing waste, using eco-friendly materials.
- Social: Responsibility to employees, customers, and the surrounding community.
- Governance: Transparent, honest management, anti-fraud, and ensuring business ethics.
Applying ESG helps increase credibility, attract investors, retain young talents, and expand access to global supply chains.
Challenges when businesses implement ESG
Implementing ESG remains a challenging journey for many businesses. Common barriers include:
- Lack of specialized teams with sufficient understanding and capability to lead ESG
- Budget constraints for sustainability-related activities
- Not knowing where to start, what data to collect, and how to measure
Concerns that ESG is a complex journey requiring large resources and long time
However, it is entirely feasible to implement ESG if there is proper guidance, step-by-step approach, and knowledgeable partners who understand both the system and practical operations.
Which areas should approach and deploy ESG early?
ESG (Environmental – Social – Governance) is increasingly becoming an indispensable part of many organizations’ development strategies. It is no longer a “trend” choice but a fundamental standard for entities wanting to join global supply chains, attract investments, or affirm brand reputation.
Industries that should prioritize integrating ESG include:
- Manufacturing, processing, and export sectors: directly affected by emission controls, supply chain transparency, and labor conditions.
- Construction, real estate, and energy sectors: significantly impacting resources and living environments, often facing legal and community risks.
- Finance, banking, and investment sectors: rapidly shifting towards “responsible investment,” favoring organizations with clear ESG standards.
- Technology, e-commerce, and digital services: expected to be transparent in data governance, digital ethics, and social responsibility.
- Non-profits, social enterprises, and public units: require ESG as a framework to demonstrate responsibility to the community and operate transparently and sustainably.
Each business sector has a different approach to ESG. The common point is ESG is no longer “nice to have” but “must have” for long-term, responsible growth in a business ecosystem increasingly demanding global standards.
6 Steps to Effectively Apply ESG in Businesses
Step 1: Understand the true nature of ESG – integrate it into development strategy
For many companies, ESG may seem distant, but it can start with very simple actions. Reducing paper printing, installing LED lights to save electricity, or encouraging flexible working are easy ESG steps.
The key is to see ESG as part of a long-term development strategy alongside financial and operational goals. When properly understood, ESG becomes a tool to enhance competitiveness, not just a mandatory expense.
Image note: Understanding the true nature of ESG – Applying ESG in businesses
Step 2: Choose suitable ESG goals and indicators
Businesses don’t need to cover the entire international ESG framework. Instead, focus on 2-3 core goals directly related to their operations. For example, a manufacturing company may prioritize energy consumption reduction; a service company may focus on labor safety and financial transparency.
From there, select simple, measurable ESG indicators to track progress, such as electricity consumption, employee training hours, or internal satisfaction levels. No complexity needed, just relevance and authenticity.
Step 3: Establish a flexible ESG governance system
Companies should clearly assign who is responsible for ESG – either an individual or a cross-department team. Having a specific point of contact ensures smooth implementation and clear accountability.
Step 4: Embed ESG into company culture
A sustainable ESG strategy grows from within. Companies can hold internal sharing sessions on ESG, encourage staff to contribute “green” initiatives, and include ESG in regular employee evaluations.
When the whole team understands and commits, ESG stops being a top-down mandate and becomes a shared motivation for long-term goals. ESG culture also improves corporate image in the eyes of partners and customers.
Step 5: Utilize external networks and resources
Businesses don’t need to “go it alone” in their ESG journey. Many organizations offer free or low-cost resources, tools, and training, such as UNDP, IFC, GIZ, VCCI, and consulting firms like IBS, EY, RSM.
Joining ESG networks, online courses, or obtaining “green” certifications suitable for current capacity are practical and effective steps. Cooperation and learning from experienced entities also save time and avoid common mistakes.
Step 6: Report and communicate ESG genuinely
After implementation, businesses should document specific improvements, measurable results, or simply small success stories. This not only helps internal teams see the progress but also builds trust with partners, customers, and investors.
You don’t need lengthy, flashy reports. A concise ESG summary posted on the website, a social media post, or brochures sent to clients are enough to demonstrate commitment and transparency in the sustainable development journey.
IBS – Accompanying businesses to effectively implement ESG
Implementing ESG is a long-term journey that requires proper understanding, correct execution, and the right partners.
At IBS – Institute of Training and Business Solutions Consulting, we provide a comprehensive ecosystem of solutions including:
- Practical training & coaching
- Strategy consulting & team development
- Business networking
IBS proudly holds exclusive cooperation with VOS Holdings Ecosystem Company Limited, implementing Greenhouse Gas Inventory training according to ISO 14064-1 standards and building Net-Zero roadmaps for banks and financial organizations in Vietnam.
Our programs are designed to international standards, updated with practical implementation in Vietnam, and certified by Intertek – a globally reputable inspection and certification body. The partnership between IBS – VOS Holdings – Intertek highlights IBS’s pioneering role in connecting Vietnamese businesses with international ESG standards and networks.
Contact IBS today for consultation and start a suitable, effective, and sustainable ESG journey for your business.
IBS Training & Business Solutions Consulting Joint Stock Company
- 35 Nam Ky Khoi Nghia, Nguyen Thai Binh, District 1, HCMC
- Website: ibsglobal.vn
- Email: info@ibsglobal.vn
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