In a shifting global landscape marked by economic headwinds, rising trade pressures, and evolving investor expectations, businesses in Viet Nam are increasingly recognizing that strong social performance is not a luxury – it’s a necessity. This message was front and center at the seminar “Advancing the ‘S’ in ESG”, held in Hanoi on 10 April 2025.

The event – hosted by UNDP in close coordination and cooperation with the Viet Nam Business Council for Sustainable Development (VBCSD), and with support from the Government of Sweden – brought together business leaders and international experts to focus on the social dimension of environmental, social, and governance (ESG) standards. Participants examined how fair labour practices, responsible supply chains, ethical business conduct, and community engagement are not only vital for sustainability, but also essential for business resilience and growth.

H.E. Johan Ndisi, Ambassador of Sweden to Viet Nam, opened with a direct message: responsible business practices are no longer a “nice to have.” They are a condition for growth in some of the world’s most sustainability-conscious markets – and a strategic opportunity for export-driven economies like Viet Nam.

“For economies like Viet Nam, advancing the social dimension of ESG offers a strategic opening – one that can lead to fairer workplaces, stronger supply chains, and more sustainable trade partnerships,” he said. “As an early mover on ESG, Vietnamese businesses could gain an incredible advantage.”

That advantage hinges not only on policies but also on people – and how businesses engage with them. UNDP Viet Nam Resident Representative Ramla Khalidi urged companies to see human rights and stakeholder dialogue not as obligations, but as core components of long-term success.

“Meaningful stakeholder engagement isn’t just compliance; it’s a strategic advantage,” she said. “Companies that integrate human rights and environmental due diligence into their core business strategy thrive in the long term.”

Backing this up with hard data, Kassidy Huang from the World Benchmarking Alliance shared findings that show a clear link between strong social practices and business performance. Companies leading on human rights and decent work aren’t just meeting expectations – they’re outperforming financially, with higher growth in revenue and employment. But she also cautioned that Vietnamese businesses must prepare for rising demands in global value chains, particularly those to be impacted by the European Corporate Sustainability Due Diligence Directive.

“Vietnamese businesses may not be directly in the scope of new EU regulations, but your buyers likely are. That means these expectations will cascade downstream – and aligning now creates a competitive edge,” she said.

But social sustainability is not just about opportunity – it’s also about countering risk. Joe Phelan of the World Business Council for Sustainable Development reminded the audience that inequality is now a structural business threat. “Inequality poses a systemic risk – to business operations, supply chains, investment portfolios, and social stability,” he warned. “Tackling it is not just ethical; it’s strategic.”

Throughout the morning, these ideas were brought to life through the experiences of companies already working to embed social performance into their business models, who shared how they are embedding social performance into business models, navigating ESG disclosure requirements, and investing in stakeholder relationships. Discussions highlighted the need for stronger policy coherence, targeted support for SMEs, and innovative financing tools like Orange Bonds to scale social impact.

The event concluded with a call for businesses of all sizes to treat social sustainability not as a constraint, but as a competitive advantage – and to lead the way in shaping more equitable, resilient, and future-ready economies.