In the context of globalization, establishing a sustainable business development has become a long-term objective. Central to this endeavor is ESG (Environmental, Social, Governance) - a comprehensive framework for assessing environmental, social, and governance practices, which is instrumental in enabling businesses to maintain competitive advantage, enhance brand value, and cultivate sustainable partnerships. These three golden principles are critical for companies to align with market trends while pursuing sustainable development.

 

What constitutes a sustainable business development?

ESG is an acronym representing three primary factors: Environmental, Social, and Governance. This framework serves as a benchmark for measuring a business's sustainability and its impact on the community. A higher ESG score indicates a company's effective adherence to these criteria.

 

ESG - A framework for evaluating environmental, social, and governance standards

Numerous companies have successfully embraced sustainable development, including Adidas, Samsung Electronics, and L’Oréal’s Burgos. On November 29, 2024, the Vietnam Chamber of Commerce and Industry (VCCI) organized the announcement of the Sustainable Businesses in Vietnam 2024, showcasing 100 exemplary names, including the Vietnam Dairy Products Joint Stock Company, BAT-Vinataba Joint Venture, Greenfeed Vietnam Joint Stock Company, and Coteccons Construction Joint Stock Company… 

 

On November 29, 2024, the Vietnam Chamber of Commerce and Industry (VCCI) hosted the announcement of Sustainable Businesses in Vietnam 2024.

In reality, sustainable business practices are not limited to large corporations; small and medium enterprises can effectively implement them through appropriate strategies. This approach not only helps businesses meet global trends but also lays a solid foundation for long-term growth.

Moreover, many economic experts and investors now view ESG as a promising gateway to the future. Many believe that these indices are crucial indicators reflecting the overall landscape of businesses, laying the groundwork for their global influence.

 

Why do businesses need to pursue sustainable development?

Sustainable development strategies are pivotal, reflecting social responsibility while determining a company's resilience.

Enhancing brand image and attracting modern consumers

As society becomes increasingly modernized, consumers are becoming more discerning in their product selections. Beyond quality and price, they prioritize the humanitarian aspects of products: environmentally friendly offerings, corporate policies towards labor, and community welfare.

According to the World Economic Forum’s report on the future of consumption in fast-growing ASEAN markets, 80% of consumers in ASEAN are concerned about sustainability. Recent data from Edelman’s Trust Barometer indicates that how companies treat employees and suppliers significantly influences consumer purchasing behavior.

 

Why do businesses need to pursue sustainable development?

 

Specifically, one-third of consumers discontinue using brands they perceive as failing to behave appropriately during a crisis, while 71% lose trust in brands that prioritize profit over people.

These statistics illustrate that if businesses invest in achieving ESG standards, they will enhance their brand image and appeal to the new generation of consumers. These benchmarks serve as clear evidence of a company's commitment towards its products and brand.

 

Sustainable businesses - A magnet for investment

Since its inception over two years ago, the S&P 500 ESG Index has experienced exceptional growth, outpacing the S&P 500. This serves as evidence of investors' preference for companies that prioritize ESG as a core value. The stock prices of these companies have risen faster than those of others.

Amid market fluctuations and inflationary pressures, retail investors are increasingly shifting towards businesses with robust governance practices that demonstrate environmental and social responsibility.

Notably, for foreign capital, ESG criteria are becoming increasingly pivotal, aiding businesses in evaluating investment risks and opportunities effectively. Companies with high ESG scores not only attract significant investment but also enjoy favorable loan rates and appealing terms, such as those from the ADB or through green bond issuance.

 

Promoting businesses to uphold core values

Leaders are often willing to adjust their management practices to align with market trends, thereby capitalizing on new opportunities and transforming risks into competitive advantages. The trend towards becoming sustainably developed entities and implementing ESG practices is a primary concern for numerous businesses.

However, committing to ESG standards necessitates addressing macro-level issues: human welfare, core values, and more. As these concerns are nurtured, businesses will undoubtedly improve in various dimensions, such as business ethics, work morale, and customer service. The primary goal is to enhance core business value and build robust trust with stakeholders—the key determinant of a company’s success.

 

Sustainable businesses provide long-term benefits

Integrating ESG into operations signifies that all enterprises are committing to a collective “contract” to reduce emissions. This, in turn, safeguards energy and natural resources, mitigates greenhouse gas emissions, contributes to a cleaner environment, and enhances human health. This foundation is essential for ensuring quality of life on a global scale.

 

Three golden principles for sustainable business development

Here are three core principles for fostering sustainable business practices:

Economic sustainability

To achieve economic sustainability, businesses must focus on reducing energy consumption and minimizing negative impacts on the environment and biodiversity:

• Optimize internal processes: Implement a Building Management System (BMS) to control devices and reduce human error.

• Monitor energy usage: Utilize an Energy Management System (EMS) to detect and rectify electrical leaks promptly.

• Upgrade equipment: Replace energy-intensive devices with high-tech, energy-efficient solutions that increase automation.

• Enhance refrigeration systems and upgrade lighting systems from compact fluorescent to LED lighting.

• Utilize renewable energy: Employ green sources such as solar power to reduce costs and CO₂ emissions.

 

Social sustainability

Evaluating social sustainability hinges on factors such as the Human Development Index (HDI), income equality, education, healthcare, and social welfare. Notably, businesses must emphasize employee development and foster a fair, safe working environment.

 

Environmental sustainability

Environmental sustainability is an indispensable factor for any business aspiring to sustainable development. In other words, environmental protection must be a top priority in a company’s sustainable development strategy. Businesses can focus on solutions such as:

• Transitioning from traditional to renewable energy sources, particularly solar power.

• Reducing CO₂ emissions to contribute to the collective efforts in combating climate change.

 

This transformation not only aligns with market trends but also reflects the company's responsibility towards both the community and the planet.

 

Transitioning from traditional to renewable energy sources, especially solar power

 

Minmax Green - Partnering with businesses for sustainable development

In an era where sustainable development has become vital, Minmax Green stands ready to accompany businesses on their journey towards achieving a balance between economic growth, environmental protection, and enhanced social value.

With innovative solutions such as energy management, sustainable consulting services, green building consulting, and effective emission reduction support, Minmax Green not only aids businesses in reducing operational costs but also contributes to environmental protection and community enhancement.

Allow Minmax Green to accompany you on your journey towards sustainable business development. We are committed to delivering innovative and sustainable improvements, forging a green future for both businesses and society. Contact Minmax Green today through our website https://minmaxgreen.vn/ or hotline 0931 861 313 for optimal consultation and support