In light of the strengthening requirements for sustainable development in doing business, capital flows are increasingly diverted to companies that pay attention to ESG commitments.
ESG is no stranger to the world, especially in the last decade which concerns environmental, social, and governance practices of businesses. Sophisticated investors use ESG criteria as a set of standards to screen potential investments that possess capabilities to sustain and thrive for a long period. However, this concept has been mentioned more frequently in Vietnam over the last few years as international investors are more attracted to this market. The more holistic supervision of investors at post-investment stages is one of the reasons why ESG reports are becoming more and more important.
Most investors believe that managing risks and opportunities related to ESG is an important factor when making investment decisions and are willing to withdraw capital from companies that do not fulfill their ESG responsibilities. Investors expect ESG to become an essential part of business strategy and corporate social responsibility as a gateway to the company’s future growth. In other words, ESG has the potential to revamp how organizations plan, implement, and operate successfully as well as show the company’s overall business picture. Investors are inspired and convinced to include such companies in their long-term portfolios.
Most investors and corporations have a desire to build on their businesses that aims at sustainability, but they are facing difficulties in implementing ESG indicators, due to a lack of understanding, knowledge, experience, human resources, and control. In Vietnam, sustainability is currently a hurdle for many businesses to practice, which hinders their ability to attract foreign investors and capital funding. Practicing and achieving sustainability goals would serve as one of the final puzzles to not only help businesses to position themselves to the next level but also capture many significant growth opportunities for many years to come.
ASART’s intensive experience in deal origination, due diligence, and negotiation process allow us to work closely with investors varying from M&A strategic acquirers to private equity funds and updated with ESG trends in investment appetites and how businesses can greatly benefit from having ESG best practices.
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