Page 199 - Ebook HTKH 2024

3.2.1. Drivers of green transformation in Vietnam
The movement toward green transformation in Vietnamese enterprises is driven

by several key factors:
- Vietnam has established a strong regulatory framework aimed at promoting
environmental sustainability. The country's Law on Environmental Protection (2020),
passed by the National Assembly, requires businesses to comply with stricter
environmental standards, including reducing carbon emissions, enhancing energy
efficiency, and managing waste more responsibly (Vietnam National Assembly, 2020).
Enterprises are mandated to adopt sustainable production practices, with penalties for
non-compliance. Additionally, the Vietnamese government has introduced initiatives to

promote green growth, such as the Vietnam Green Growth Strategy (VGGS) 2021-
2030, which focuses on transitioning the economy towards low-carbon development.
This strategy sets clear objectives for enterprises to adopt sustainable practices and
reduce environmental impacts while contributing to national economic growth (Vietnam
Ministry of Planning and Investment, 2021). These regulations have become a key
driver for businesses to embrace green transformation as part of their long-term strategy.

- As Vietnamese enterprises increasingly engage in global trade, they face
growing pressure from international markets to adopt sustainable practices. Many
global companies and consumers now expect businesses to meet stringent
environmental standards, particularly in sectors such as textiles, agriculture, and
manufacturing. For instance, the European Union’s carbon border adjustment
mechanism (CBAM) is designed to encourage countries like Vietnam to adopt greener
production methods in order to access European markets (UNCTAD, 2021). Moreover,

sustainable products are becoming more attractive to consumers, with studies showing
that consumers are willing to pay a premium for products that are environmentally
friendly. This shift in consumer behavior is pushing Vietnamese businesses to focus on
green innovation and sustainable sourcing to remain competitive in both domestic and
international markets (Nguyen & Pham, 2020).
- Corporate social responsibility (CSR) has become an important driver of green

transformation in Vietnam. Enterprises that prioritize sustainability and corporate
responsibility can enhance their brand reputation and build stronger relationships with
stakeholders. By adopting green practices, businesses not only reduce their
environmental footprint but also gain recognition as socially responsible organizations,
which can translate into long-term competitive advantages (Nguyen & Nguyen, 2021).
Additionally, investors are increasingly evaluating companies based on their
environmental, social, and governance (ESG) performance. Companies that
demonstrate strong commitments to sustainability are more likely to attract investment

and capital from funds that prioritize ESG criteria (Dyllick & Muff, 2016).
3.2.2. Challenges of green transformation in Vietnam
Despite the clear benefits of adopting green transformation, Vietnamese
enterprises face several challenges in implementing sustainable practices.

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