What should companies do for ESG to become a passport to long-term green financing?

At the roundtable “Good governance to attract cheap capital - Experiences from successful enterprises” held on the morning of May 6, experts discussed the benefits of ESG practice and how to raise a company’s ESG footing. During the event, experts assessed that Vietnam’s firms currently face limited access to long-term capital and are heavily dependent on the domestic banking system. The market is becoming more selective and cautious, placing pressure on enterprises. According to Dr. Le Xuan Nghia, Director of the Centre for Sustainable Development Consulting (CODE), Vietnamese firms rely on the domestic commercial banking system and have no alternative sources of funding. Although global green financing and energy-transition capital are substantial, Vietnamese firms have limited access to them. Thus, firms still depend greatly on domestic banks. However, is green capital truly cheap? Mr. Pham Xuan Hoa, Deputy General Director of Super Truong Phat Plastic Group, noted that last year the company secured a green loan from an international bank of about VND 14 billion. Based on practical experience, that funding isn’t cheaper by a large margin than other funds the company mobilizes. Nevertheless, obtaining green funding helps the company strengthen its documentation capabilities, and its main advantage is that it is unsecured and long-term. ESG as a passport to long-term capital. Experts say ESG is like a “passport” or “visa” enabling enterprises to access long-term capital streams and to enter strict international markets. Dr. Nghia emphasizes two crucial advantages ESG provides: access to markets and access to bank loans and funds from both domestic and foreign investment sources. When lending to enterprises, lenders first ask whether an ESG report exists, a life-or-death issue for accessing cheap capital domestically and internationally. Ms. Nguyen Ngoc Linh, CEO of DNSE Securities, notes that accessing long-term capital typically lowers financing costs, and an ESG-compliant framework is a tool that helps the company cross the sea and seize new opportunities. Hoa also mentions that ESG has facilitated the company’s contact and dialogue with international financial institutions that could not be reached previously. How can enterprises access green capital? (Image) To access green capital, firms face several challenges. Hoa notes that the primary issue is the complexity of the documentation, especially for international green funding, where documentation requirements are a hurdle for many Vietnamese companies. Another challenge is human capital. Firms already understand standards such as GRI and ESG governance standards, but implementation requires better staff knowledge and training. “We find it quite difficult to train personnel,” Hoa says. Overall, experts say that to attract capital, firms should focus on data transparency, digitizing governance, and adopting a long-term strategy. Hoa argues that data transparency is the most important factor; even if ESG reports are very well drafted, if the data aren’t transparent and verifiable, attracting funds will be impossible. Linh adds that during the process of connecting foreign funds into domestic firms, investors first ask which ESG standards are used, and then they review those standards. Criteria that are evaluated include board diversity, representation of shareholders, and independent directors; listed companies have advantages because standards already exist, while unlisted firms face more challenges. They also assess processes and digital transformation to ensure transparency and efficient operations, and a robust and transparent cash flow and financial strength. Investors also scrutinize firms that rely heavily on short-term debt to see if long-term capital will be used effectively. An important factor is long-term strategy and vision. Nghia contends that the core of a company must be a green development program with at least a 10-year horizon, and the entire management apparatus must be anchored to that plan. [Yen Chi] FILI - 16:56 06/05/2026