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Accelerating Digital Transformation and ESG Integration Amid Carbon Market Reforms in Vietnam
June 24, 2025 | Environment

Vietnamese enterprises are accelerating digital transformation and strengthening ESG practices to navigate tightening carbon regulations and global market demands.


The European Union’s Carbon Border Adjustment Mechanism (CBAM) will take effect in 2026, prompting Vietnam to establish carbon market rules with a pilot phase through 2028 and full operation in 2029. Companies that install compliant emission measurement systems can redeem domestic carbon credits to offset CBAM costs. For example, the World Bank’s carbon credit initiative in Quang Binh demonstrates how these credits function and reveals growing demand and supply driven by firms offsetting emissions alongside renewable energy and smart city projects.

**Alongside carbon market reforms, companies face expanding environmental, social, and governance expectations.**
Under pressure from CBAM and other tightening regulations, organizations now measure ESG performance not only by environmental impact but also by employee rights, diversity, and governance practices. Strengthening ESG frameworks enhances brand reputation and attracts green investment capital.

**Digital transformation has shifted from a trend to a strategic imperative, encompassing automation, data management, artificial intelligence, and blockchain.**
These technologies boost competitiveness and advance ESG goals by enabling precise carbon monitoring, ensuring sustainable sourcing, and increasing transparency in decision-making. They also support accurate ESG metrics and underpin investments in clean technologies and smart manufacturing systems.

**In Vietnam’s textile and garment sectors, companies increasingly deploy enterprise resource planning systems and adopt international standards such as WRAP and BSCI to meet ESG requirements.**
Yet small and medium-sized enterprises often face resource constraints, data measurement challenges, and a shortage of skilled personnel. A 2025 Deloitte Southeast Asia survey found that only 23 percent of respondents had fully integrated ESG into their operations.

**On June 24 in Hanoi, Dn tr newspaper will host the Vietnam ESG Forum 2025, featuring a seminar on digital transformation and ESG practices as essential tools for global integration.**
The program will offer strategic guidance on sustainable development, emphasize the banking sector’s role, and present technological solutions to boost efficiency. VietinBank will share its 14-year experience in ESG strategy and sustainable finance, detailing green credit products and comprehensive consulting and technical support for businesses.

**The forum will also introduce targeted training programs for SMEs, short ESG courses, and international master’s programs to help companies meet their sustainable development goals.**
The Vietnam ESG Awards 2025 will honor corporate leaders who leverage science and technology to advance ESG initiatives, driving broader adoption of sustainable practices across Vietnam’s business community.






### IMPACT ANALYSIS
**From this Development, various impacts could cascade through the system, to a lesser or greater extent, depending on the severity and criticality of the shocks.**







































































Domain Causal Chain Possible Outcome
Environment (Carbon-pricing coverage share ↑ → CO₂-intensity of GDP change ↓ → Climate-induced migration flow ↓) Enhanced carbon-pricing coverage lowers GDP carbon intensity and reduces climate-driven migration flows.
Macroeconomics & Growth (Renewable-energy incentive regime ↑ → Renewable-generation share (power sector) ↑ → Energy intensity of GDP ↓ → Green-growth indicator ↑) Stronger renewable incentives boost clean-power generation, lower energy intensity, and improve the green-growth score.
Financial System (Corporate-governance quality score ↑ → Corporate net-zero commitment count ↑ → ESG-related capital-flow tilts ↑) Higher governance scores drive more net-zero pledges and redirect ESG-focused capital toward sustainable firms.
Social Cohesion (Anti-discrimination enforcement strength ↑ → Sense-of-fairness index ↑ → Social-trust composite swing ↑) Stronger anti-discrimination enforcement raises perceived fairness and bolsters overall social trust.
Demographics & Human Capital (Gender equality in education & employment ↑ → Female secondary-school completion gap ↓ → Gender wage & leadership gap ↓) Greater gender parity in education narrows completion gaps and reduces the wage and leadership disparities for women.
Technology & Innovation (Enterprise AI adoption index ↑ → AI adoption GDP uplift ↑ → Total-factor productivity growth from tech ↑) Accelerated AI adoption raises AI-driven GDP contributions and boosts total-factor productivity in tech sectors.
Firms (Digital-technology adoption rate ↑ → SME digital-tool adoption index ↑ → Net foreign direct-investment inflow (corporate) ↑) Higher SME digital-tool uptake signals supplier readiness and attracts increased corporate FDI inflows.
Technology & Innovation (Next-gen digital-infrastructure coverage ↑ → Average urban broadband speed (Mbps) ↑ → Digital & knowledge-intensive industry share of GDP ↑) Expanded next-gen coverage boosts urban broadband speeds, driving growth in digital and knowledge-intensive industries.
Technology & Innovation (Open-data & standards mandate ↑ → Patents & open-source projects spawned by open data ↑ → Open-source contribution index ↑) Open-data mandates spur new patents and open-source projects, raising the open-source contribution index.
Households (Union density / collective-bargaining coverage ↑ → Wage bill share of revenue ↑ → Household consumption growth contribution to GDP ↑) Higher union coverage increases wage bills, fueling household consumption’s contribution to GDP growth.
Infrastructure & Urbanization (High-speed broadband household penetration ↑ → Digital divide (urban-rural speed gap) ↓ → Economic growth from digital-content sector ↑) Greater broadband penetration narrows the rural–urban speed gap and accelerates digital-content sector growth.
Competitiveness (Carbon pricing mechanism design ↑ → Average cost of capital (WACC) ↓ → FDI net inflow (% GDP) ↑ → Greenfield FDI inflow growth ↑) Improved carbon pricing design lowers WACC, attracting greater FDI inflows and boosting greenfield investment growth.




### BOTTOM LINE

- Vietnam’s adoption of a domestic carbon market by 2029 in response to the EU’s Carbon Border Adjustment Mechanism will compel firms to install compliant emission-measurement systems and redeem credits to offset regulatory costs, driving down the carbon intensity of GDP and potentially reducing climate-driven migration pressures.


- Enhanced renewable-energy incentives alongside carbon-pricing reforms will accelerate clean-power generation, lower energy intensity, and boost Vietnam’s green-growth indicators, thereby improving the nation’s attractiveness to global investors and supporting long-term economic resilience.


- Strengthening corporate governance and embedding ESG metrics within board charters and executive compensation will increase net-zero commitments and redirect financial flows towards sustainable enterprises, lowering the weighted average cost of capital and stimulating greenfield foreign direct investment.


- Mandatory ESG reporting that encompasses social metrics such as employee rights, diversity, and anti-discrimination practices will foster a stronger sense of workplace fairness, fortify social trust, and narrow gender gaps in education and leadership through targeted equality programs.


- The strategic integration of automation, artificial intelligence, blockchain, and advanced data-management tools for carbon monitoring and sustainable sourcing will lift enterprise AI adoption, raise total-factor productivity, and expand the contribution of knowledge-intensive industries to GDP.


- Initiatives by major financial institutions—such as VietinBank’s green-credit products and technical support—combined with targeted SME training programs introduced at the Vietnam ESG Forum 2025 will boost SME uptake of digital-ESG toolkits, signaling supplier readiness and attracting increased corporate foreign investment.


- Investments in next-generation digital infrastructure and open-data mandates will elevate urban broadband speeds, reduce the rural-urban digital divide, spur new patents and open-source projects, and grow the digital-content sector across underserved regions.


- Formalization of collective bargaining and stronger union coverage driven by ESG frameworks will raise wages, enhance household purchasing power, and sustain domestic consumption growth, thereby reinforcing macroeconomic stability and reducing vulnerability to external demand fluctuations.


- International recognition through events like the Vietnam ESG Awards 2025 will create positive feedback loops by celebrating corporate leaders who leverage technology for sustainability, fueling broader adoption of best practices across industries and enhancing Vietnam’s global ESG reputation.
National Assembly Approves International Financial Centre Development and Legal Reforms
June 24, 2025 | Financial System

Vietnam’s National Assembly is set to approve the creation of international financial centres in Ho Chi Minh City and Da Nang while enacting comprehensive legal reforms to modernize Vietnam’s economic framework.


Running over eight weeks and concluding on June 27, 2025, the National Assembly’s 9th session of the 15th legislature focused on establishing legal foundations for administrative and economic restructuring. On its final working day, delegates will vote on a resolution to develop international financial centres in Ho Chi Minh City and Da Nang.

**The resolution designates Ho Chi Minh City as a comprehensive financial hub, integrating banking services, capital markets, derivatives trading and fintech innovation.**
The city centre will offer a full suite of financial products and services, blend domestic and international market activities and strengthen Vietnam’s standing in global finance.

**Da Nang’s international financial centre will specialize in green finance and provide targeted support for small and medium-sized enterprises and startups.**
By leveraging cross-border trade opportunities from its adjacent free trade zone, it will also serve as a pilot site for managing digital assets and currencies, testing regulatory frameworks and technological applications in a controlled environment before a nationwide rollout.

To support these centres, the government proposed twelve groups of special policies covering foreign exchange management, banking operations, capital market development and tax incentives and administration; land use and planning; human resources and talent attraction; pilot frameworks for digital assets and currencies; fintech regulation; green finance incentives; support mechanisms for SMEs and startups; cross-border trade facilitation; and the legal and institutional foundations necessary for a comprehensive financial infrastructure.

**These initiatives form part of a broader legislative drive during this session.**
Lawmakers are also finalizing amendments to criminal and administrative laws, establishing special development mechanisms for port cities and advancing a range of socio-economic and governance reforms to modernize Vietnam’s legal and regulatory environment for business and investment.

Monitored Intelligence for Vietnam - June 24, 2025


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Deputy PM attends St. Petersburg economic forum, sidelines bilateral activities

Vietnam Net - E | English | News | June 24, 2025 | UndeterminedEconomic Growth

The St. Petersburg economic forum attracted nearly 20,000 delegates from 140 countries and territories, a 20% increase from 2024. Vietnamese Deputy Prime Minister Long engaged with leaders of major Russian corporations such as Gazprom, AFK Sistema, and Zarubezhneft, which are either investing or exploring investment opportunities in Vietnam. He also held brief talks with high-ranking officials including Russian Deputy PM Alexander Novak, Saudi Arabian Minister of Energy Prince Abdulaziz bin Salman Al Saud, the President of the New Development Bank Dilma Rousseff, and the Secretary General of the Black Sea Economic Cooperation Organisation Lazar Comanescu.

Long emphasized the strong and growing comprehensive strategic partnership between Vietnam and Russia, highlighting the importance both nations place on effective collaboration. He called for increased efficiency in joint oil and gas exploration and exploitation, and expressed Vietnam’s readiness to support Russian enterprises investing not only in traditional sectors like energy and industry but also in emerging fields including IT, digital technology, AI, clean energy, pharmaceuticals, and biomedicine. He also encouraged Russian firms to assist with technology transfer, technical support, and training for Vietnamese personnel.

Russian corporate leaders expressed appreciation for Vietnam’s supportive government policies and viewed the May 2025 visit to Russia by Vietnamese Party General Secretary To Lam as a significant milestone for bilateral cooperation. They committed to applying advanced technologies in joint projects and expanding technology transfer and training programs. During his visit, Long and the Vietnamese delegation participated in a ceremony laying flowers at the monument to President Ho Chi Minh in Saint Petersburg, alongside representatives from the Vietnamese Embassy, local Vietnamese community, and city authorities.

Chuỗi cung ứng đất hiếm toàn cầu đã dịch chuyển ra sao?

How Has the Global Rare Earth Supply Chain Shifted?

VN Express | Local Language | News | June 24, 2025 | Supply Chain Issues

The Mountain Pass mine in California, the only operating rare earth mine in the United States, resumed production in 2017 after years of inactivity. The mine's revival aligns with a global shortage of imported rare earths, which are vital for industries such as computer chips and aircraft engines. Despite U.S. efforts, China still dominates the global rare earth supply chain, accounting for over 69% of global production and about 90% of rare earth magnets, essential for electric vehicles and wind turbines.

China has used rare earth exports as leverage amid escalating trade tensions, drastically cutting exports in recent months. This move has revealed the fragility of the global supply chain and prompted other countries to reconsider domestic production despite the high costs and environmental challenges. The history of rare earth production in the U.S. includes the Mountain Pass mine's closure in 2002 due to environmental issues and competition from China, which eventually led to the migration of manufacturers to China for proximity to raw materials.

The European Union is also seeking improved access to rare earths through upcoming negotiations with China, with export licenses still seeing delays despite attempts to expedite them. Meanwhile, the U.S. is actively trying to rebuild its rare earth capabilities by refining ores domestically and planning magnet production in Texas by early 2025. In Oklahoma, investments in critical mineral refining, battery recycling, and rare earth magnet manufacturing are growing, supported by favorable logistics, workforce expertise, and streamlined regulations.

Outside the U.S., countries like Australia, India, and Brazil hold significant rare earth reserves and are moving to increase production. Startups such as Westwin Elements in Oklahoma are expanding nickel refining operations with ambitions to meet a substantial portion of U.S. demand, embodying a broader strategy to reduce dependence on China and enhance domestic critical mineral supply chains.

Local administrative restructuring must not stall other tasks: PM

Vietnam Net - E | English | News | June 24, 2025 | UndeterminedPolitical Policy Resistance

Prime Minister Pham Minh Chinh has instructed that the ongoing restructuring of local governments must not impede the progress of key national programmes, including the elimination of substandard housing, transport infrastructure development, and public investment disbursement. He emphasized the importance of maintaining focus on these priorities despite the organisational changes in the two-tier local administration model.

The programme to remove temporary and dilapidated houses has made significant progress, with nearly 263,000 units addressed so far—225,000 completed and 38,000 under construction. Thirty-eight provinces and cities have met their targets. The Prime Minister urged the commencement of construction on the remaining 14,577 houses to meet the August 31 deadline, with homes for veterans to be completed by July 27 as a tribute to their service. These housing achievements are to be highlighted as part of the 80 flagship projects commemorating the 80th National Day.

In the transport sector, 19 projects have been completed, notably expanding the expressway network from 1,327 to 2,268 kilometres and commissioning Terminal 3 at Tan Son Nhat International Airport. Another 52 projects continue as scheduled. PM Chinh called for resolution of challenges such as site clearance and material costs and urged swift progress on major projects including the Ho Chi Minh City Long Thanh expressway expansion and Hanoi’s Ring Road 4 component. For Long Thanh International Airport, authorities were directed to ensure safety, quality, and timely completion in 2025 despite weather delays.

Public investment disbursement reached 264.8 trillion VND (about 10.13 billion USD) in the first half of 2025, representing 32.06% of the annual target. However, nearly 7.36 trillion VND remains undistributed across multiple ministries and localities, with 61 agencies performing below the national average. The Prime Minister criticized the slow and insufficient responses to delays and violations in managing public investment, calling for stronger accountability down to individual officials and the incorporation of disbursement results into annual performance evaluations.

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