Vietnam’s economic ascent over the past four decades has been one of Asia’s most compelling growth stories. From a low-income agrarian economy to a dynamic manufacturing hub, the country has lifted millions out of poverty and built a resilient middle class.
But as global markets evolve and climate risks intensify, Vietnam must now pivot to a new growth model: one that is sustainable, innovation-led, and globally competitive. Sustainability is no longer a regulatory checkbox; it is a business imperative and a source of competitive advantage, said Jason Yang, Chief Sustainability Officer, UOB Vietnam, 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.
Policy shifts
According to UOB, Vietnam’s policymakers are laying the groundwork for a green transformation. Under Resolution 198, the government has introduced targeted incentives to accelerate ESG adoption and industrial upgrading. These include green credit subsidies with interest rate reductions for qualifying projects, corporate income tax exemptions for innovative startups, and land rental discounts for SMEs and high-tech firms in industrial zones.
These measures are designed not just to ease compliance burdens but to reward businesses that align with national priorities, particularly in green and circular economy, high-tech manufacturing, innovation, and digital transformation.
The plan to set up the International Financial Centers (IFCs) in Ho Chi Minh City and Da Nang further underscores Vietnam’s ambition. These hubs will serve as platforms for green finance, carbon trading, and fintech innovation, supported by favorable tax regimes and regulatory sandboxes. They are expected to attract global capital and modernize Vietnam’s financial ecosystem.
Vietnam continues to invest heavily in infrastructure, allocating about 5-6% of GDP annually, the highest in Southeast Asia. New expressways, airports, and regional connectivity projects are laying the foundation for long-term competitiveness and industrial clustering. But infrastructure alone is not enough. Businesses must innovate, digitize, and embed sustainability into their core strategies to remain relevant in a fast-changing 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 strategy
According to the UOB Business Outlook Study 2025, 90% of Vietnamese firms now recognize sustainability as important, and 75% have begun implementation. Medium-sized enterprises and firms are at the forefront of this movement, motivated by investor expectations and a commitment to operational discipline.
Yet many companies still perceive ESG as a cost center. Certification, reporting, and compliance are often viewed as burdens. This mindset must evolve. Sustainability is now a strategic lever for growth, reputation, and investor access. It is increasingly tied to foreign direct investment, supply chain inclusion, and customer loyalty.
The shift from compliance to strategic advantage in sustainability requires more than regulatory alignment; it demands a fundamental rethinking of business models. Across Vietnam, companies are beginning to embed ESG principles into their operations, not just to meet standards, but to unlock new growth opportunities.
Integrating sustainability for strategic advantage
Rather than treating sustainability as a reporting exercise, forward-looking firms are integrating it into product development, supply chain management, and customer engagement strategies. This approach is increasingly seen as essential to attracting foreign investment, securing long-term contracts, and enhancing brand reputation.
Access to green finance is also expanding. Instruments such as sustainability-linked loans and green bonds are enabling businesses to fund their transition efforts while benefiting from performance-based incentives. These financial tools are particularly relevant for sectors undergoing rapid transformation, including manufacturing, agriculture, and logistics.
Digitalization plays a complementary role. Technologies like AI, cloud computing, and automation are helping companies improve operational efficiency and manage ESG data more effectively. In parallel, efforts to localize supply chains and adopt “Make in Vietnam” standards are helping firms mitigate external risks and align with national development goals.
Financial institutions are playing a critical role in this ecosystem. UOB, for example, has supported sustainability efforts across key industries through tailored financing solutions. Its sustainability-linked loans offer preferential rates tied to emissions reduction targets, while its green finance framework, validated by ERM, ensures that outcomes are durable and credible throughout the loan lifecycle.
Importantly, the framework is designed for the Asian context. It aligns with the Singapore-Asia Taxonomy and incorporates practical transition criteria, offering a more regionally relevant alternative to imported standards. This localization is crucial for ensuring that sustainability efforts are both effective and scalable within Vietnam’s unique economic landscape.
Vietnam’s next growth chapter will be defined not just by how fast it grows, but by how sustainably it grows. With supportive policies, resilient infrastructure, and rising investor interest, the country is poised to lead the region in innovation-driven, sustainable development.
“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,” said Jason Yang.
