Amid rising trade conflicts and mounting global economic pressures, establishing a foundation for sustainable development is essential for business survival.
And when it comes to a stable and sustainable business, you may have come across two key concepts: the Environmental, Social & Governance (ESG) Report and Corporate Social Responsibility (CSR).
These are two widely recognized concepts used to assess a business’s ability to build and maintain sustainable growth. Due to certain similarities, CSR and ESG are often confused with one another. This article will explore the key differences between ESG and CSR, and explain why ESG is becoming increasingly important for many Vietnamese businesses today.
The Shared Ideals Of ESG And CSR
ESG is a comprehensive framework used to evaluate how a business operates and the impact it creates on both the company and society. It is based on three core aspects: Environmental (E), Social (S), and Governance (G).
At its core, ESG is not just about creating a positive impact—it’s about integrating that impact into every aspect of business operations, from production processes and internal policies to long-term investment strategies.
Take the environmental pillar as an example. In PNJ’s 2023 Sustainability Report, published on July 29, 2024, the company highlighted significant improvements in reducing CO₂ emissions. Total emissions dropped by 827.08 tons per year, from 3,831.77 tons in 2022 to 3,009.92 tons in 2023. This is an encouraging sign, showing that major Vietnamese enterprises are making tangible progress toward building a sustainable and inclusive green economy.
On the other hand, CSR refers to the proactive efforts made by businesses to contribute to society. It can include activities such as charitable initiatives, environmental protection programs, and efforts to improve the welfare of employees.
CSR often stems from business ethics, serving as a way for companies to 'give back' to society the value they have created. Through CSR, businesses aim to demonstrate that they are not solely focused on profit but are also committed to contributing to a more sustainable society.
Biti’s, a prominent footwear brand, is one of the well-established names when it comes to CSR activities. Biti’s initiated and has maintained one of the longest-running corporate scholarship funds in Vietnam—the 'Nâng niu tài năng Việt' (Cherishing Vietnamese Talent) Scholarship Fund. Over the past 18 years since 2006, Biti’s has nurtured and empowered the aspirations of thousands of exceptional students, all of whom are the children of the company’s employees.
Differences Between ESG And CSR
Although both aim for sustainable development and social responsibility, ESG and CSR differ significantly in their nature, objectives, and approach.
Objectives
- ESG is systematic and strategic in nature, serving as a tool for risk management and promoting sustainable development. It helps businesses enhance transparency and become more attractive to investors.
- CSR primarily focuses on demonstrating a company's contributions to society through charitable activities, environmental protection, and community support—all aimed at building a positive brand image in the eyes of the public.
Nature
- ESG is highly mandatory, closely linked to international standards, investment policies, and modern corporate governance practices. It has a set of specific indicators that can be assessed through periodic reports and is widely used within the financial sector.
- CSR, stemming from business ethics, is often characterized by goodwill, voluntarism, and flexibility. When implemented effectively, CSR campaigns can result in significant brand recognition, though they are not considered urgent or mandatory.
Target Audience
- ESG is of particular interest to investors, shareholders, and financial institutions, as it directly impacts a company’s operational efficiency, profitability, and long-term sustainability.
- CSR primarily targets the community and customers as a means of building goodwill and trust. This, in turn, enhances customer loyalty to the brand and drives increased conversion value.
The Role Of ESG In Sustainable Economic Development
In the face of global challenges such as climate change, economic crises, and social instability, ESG has emerged as one of the most important standards for shaping business development strategies.
Rather than focusing solely on short-term profit growth, ESG encourages businesses to pursue long-term growth, fostering a harmonious relationship with the natural environment, people, and internal governance systems. At the macro level, this contributes to the creation of a balanced, resilient, and more sustainable economy.
- Environmental Criteria (E): ESG encourages businesses to reduce emissions, conserve energy, and utilize sustainable resources—contributing to the development of a green growth model that is less reliant on resource extraction.
- Social Criteria (S): ESG helps ensure workers' rights, promotes fairness, and fosters community engagement.
- Governance Criteria (G): ESG establishes transparent management systems, mitigates risks, and enhances operational efficiency.
Meeting ESG standards also opens up significant opportunities for businesses to access green funding from international investment funds and development banks.
Moreover, ESG acts as a powerful catalyst. When a company implements ESG practices rigorously, its entire supply chain—from partners and suppliers to customers—gradually adapts to sustainable development. This, in turn, helps form a responsible business ecosystem, contributing to the comprehensive promotion of sustainable economic growth.
The 2025 Vietnam ESG Investor Conference by Raise Partners and Vietnam Innovators Digest is a two-day event, gathering investors and funds, business leaders, Vietnamese and international governments, start-ups, experts, academia, and the media to spark meaningful collaboration and accelerate green and inclusive growth in Vietnam.
When: 8:00 AM - 4:30 PM, 14-15th May 2025
Where: New World Saigon Hotel, 76 Le Lai Street, District 1, Ho Chi Minh City
Event details: find out more HERE
The 2025 Vietnam ESG Investor Conference is made possible with the support of: Australian Department of Foreign Affairs and Trade (Leading Government Partner); Dynam Capital and Ecolean (Program Partner); New World Saigon Hotel (Venue Partner); HSBC Vietnam, S&P Global, DEEP C Industrial Zones, Betrimex, Home Credit (Engagement Partner); Vietcetera (Media Partner); AusCham Vietnam and Dutch Business Association Vietnam (Communications Partner); Green Transition (Technical Partner) and Be (Travel Partner).