Vietnam’s remarkable economic transformation over the past four decades stands as one of Asia’s most captivating growth narratives. Transitioning from a low-income, agrarian economy to a bustling manufacturing powerhouse, the nation has managed to uplift millions from poverty and cultivate a resilient middle class. However, as global markets continue to evolve and climate change poses significant risks, Vietnam faces the imperative of adopting a new growth paradigm: one that is sustainable, innovation-driven, and globally competitive.
At a recent Business Briefing titled “Green for Growth: How Sustainability Unlocks New Opportunities,” hosted by EuroCham Vietnam in collaboration with UOB Vietnam, Jason Yang, Chief Sustainability Officer at UOB Vietnam, emphasized that sustainability has moved beyond mere regulatory compliance. It is now a core business necessity and a vital source of competitive edge.
Policy Shifts Toward Green Transformation
The Vietnamese government is taking significant strides towards a green transformation through policy initiatives. According to UOB, Resolution 198 has introduced targeted incentives aimed at accelerating Environmental, Social, and Governance (ESG) adoption alongside industrial upgrading. This includes initiatives such as green credit subsidies with reduced interest rates for qualifying projects, corporate income tax exemptions for innovative startups, and discounts on land rentals for small and medium-sized enterprises (SMEs) and high-tech firms operating in industrial zones.
These measures aim not only to alleviate compliance burdens but also to reward businesses that align with Vietnam’s national priorities, notably in areas pertaining to the green and circular economy, high-tech manufacturing, innovation, and digital transformation. Furthermore, the government plans to establish International Financial Centers (IFCs) in Ho Chi Minh City and Da Nang, which will act as platforms for green finance, carbon trading, and fintech innovation—backed by favorable tax regimes and regulatory sandboxes.
In terms of infrastructure investment, Vietnam allocates approximately 5-6% of its GDP annually for development, the highest in Southeast Asia. Projects like new expressways, airports, and regional connectivity initiatives are laying a foundation for enhancing long-term competitiveness and fostering industrial clusters. However, infrastructure alone will not suffice. Businesses are urged to innovate, digitize, and integrate sustainability into their core strategies to remain relevant in a rapidly evolving global landscape.
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Jason Yang, Chief Sustainability Officer, UOB Vietnam, speaks at the Business Briefing: “Green for Growth: How Sustainability Unlocks New Opportunities,” hosted by EuroCham Vietnam in collaboration with UOB Vietnam and other partners in August 2025. Photo courtesy of UOB Vietnam |
From Compliance to Strategic Opportunity
The UOB Business Outlook Study 2025 reveals that as many as 90% of Vietnamese firms now recognize the importance of sustainability, with 75% having initiated the implementation process. Medium-sized enterprises are leading this shift, influenced by investor expectations and a commitment to operational discipline.
Despite this promising trend, a substantial number of companies still view ESG as a financial burden—a cost center associated with certification, reporting, and compliance. This mentality must evolve; sustainability should not be perceived merely as regulatory alignment but rather as a strategic asset that enhances growth, reputation, and access to investors. It is increasingly linked to foreign direct investment, supply chain inclusion, and customer loyalty.
Transitioning from viewing compliance as a burden to recognizing strategic advantage in sustainability requires a fundamental rethinking of conventional business models. In Vietnam, businesses are beginning to integrate ESG principles not just to meet obligations but also to leverage new growth opportunities.
Embedding Sustainability for Competitive Edge
Rather than relegating sustainability to a reporting exercise, forward-looking companies are weaving it into their product development, supply chain management, and customer engagement strategies. This integrated approach is increasingly critical for attracting foreign investment, securing long-term contracts, and enhancing brand reputation.
Furthermore, access to green finance is expanding, with financial instruments like sustainability-linked loans and green bonds emerging to support the transition initiatives of businesses, complete with performance-based incentives. This is especially vital for sectors undergoing substantial transformation, such as manufacturing, agriculture, and logistics.
Digitalization plays an equally important role. Technologies such as artificial intelligence (AI), cloud computing, and automation are aiding businesses in enhancing operational efficiency while effectively managing ESG data. Simultaneously, initiatives to localize supply chains and adopt “Make in Vietnam” standards are enabling firms to mitigate external risks and align better with national development objectives.
Key financial institutions are pivotal in this ecosystem. For instance, UOB has been a stalwart supporter of sustainability across various key industries through customized financing solutions. Its sustainability-linked loans come with preferential rates tied to specific emissions reduction targets, while its green finance framework—validated by ERM—ensures that the sustainable outcomes of funded projects are both durable and credible throughout the lifecycle of the loan.
Crucially, the framework is tailored for the Asian context, aligning with the Singapore-Asia Taxonomy and incorporating practical transition criteria. This localization is essential for ensuring that sustainability initiatives are effective and scalable within Vietnam’s distinctive economic landscape.
As Vietnam embarks on this new chapter of growth, its trajectory will not just be dictated by speed but by the sustainability of its advancements. Bolstered by supportive policies, robust infrastructure, and increasing investor interest, the country is well-positioned to lead the region in innovative, sustainable development. According to Jason Yang, “For businesses, the time to act is now. Sustainability is no longer optional; it is the key to long-term success in a greener, more competitive world.”