In the context of globalization and the growing trend toward sustainable development as a core element of business operations, ESG standards (i.e. Environmental – Social – Governance) are increasingly asserting their role as an inevitable development orientation for enterprises. In Vietnam, ESG has taken shape and is gradually being promoted through various policies and legal regulations in different phases. Notably, Resolution No. 68-NQ/TW dated 4 May 2025 of the Politburo on private economic development (“Resolution No. 68-NQ/TW”) affirms the importance of ESG, with the direction that: “The State shall adopt interest rate support mechanisms and encourage credit institutions to reduce lending rates for private enterprises to implement green and circular projects, and to apply ESG (Environmental, Social, and Governance) standards ¹”. Accordingly, it can be seen that the promotion of ESG adoption through specific policies and regulations not only reflects Vietnam’s strong commitment to fostering sustainable development but also facilitates enterprises’ access to preferential funding sources from domestic and international financial institutions which are increasingly prioritizing investment in ESG-aligned projects.

1. General overview of ESG

In general terms, ESG refers to a set of standards designed to measure a company’s sustainability and social impact throughout its operations. ESG encompasses three pillars: Environmental, Social, and Governance. Specifically:

1.1. Environmental (E) pillar 

The Environmental pillar evaluates the extent of a company’s impact on the natural environment, primarily focusing on activities such as energy consumption, use of materials, resource extraction, and waste generation. ESG emphasizes the shift toward a circular economy model, promoting reuse, recycling, and effective waste management. The key elements of this pillar include:

• The company’s contribution to climate change adaptation efforts;
• Measures to reduce greenhouse gas emissions;
• Efforts to limit pollution and manage waste;
• The ability to minimize resource exploitation and degradation of natural resources;
• Conservation and restoration of biodiversity.

1.2. Social (S) pillar

The Social pillar focuses on evaluating how a company interacts with individuals and communities across its entire value chain, from internal personnel to partners, customers, and society at large. The core objective is to ensure that business activities generate sustainable value for stakeholders, promote fairness and equality, and develop in harmony with society. The key elements of this pillar include:

• Fair labor practices, ensuring safe working conditions, lawful entitlements, and a positive working environment for employees;
• Encouraging diversity and inclusion in the workplace, ensuring non-discrimination and providing equal opportunities in recruitment, training, and promotion;
• Contributing to local community development through social initiatives and corporate social responsibility (CSR) programs;
• Protecting consumer rights, and establishing and maintaining trust-based relationships with customers and other stakeholders.

1.3. Governance (G) pillar

The Governance pillar focuses on internal governance structures and corporate management practices to ensure transparency, efficiency, and legal compliance. The key elements of this pillar include:

• Transparency and fairness in corporate governance and decision-making processes;
• Compliance with laws and regulations on full and accurate disclosure of information;
• Prevention of corruption, fraud, and money laundering, thereby safeguarding the company’s reputation and value;
• Protection of data privacy and ensuring information security across all business activities;
• Promoting equality and diversity in management positions and among board members.

The Governance pillar serves as a solid foundation enabling companies to sustain long-term resilience, build trust, and foster enduring relationships with investors, shareholders, and business partners.

2. Legal framework governing ESG in Vietnam

2.1. Legal framework governing the Environmental pillar

In relation to the Environmental pillar, the laws of Vietnam has established a coherent and multi-tiered regulatory framework governing the rights, obligations, and incentive policies for enterprises participating in environmental protection activities. These regulations focus on key areas such as climate change adaptation, waste management, sustainable use and protection of natural resources, and pollution reduction.

Among them, the Law on Environmental Protection No. 72/2020/QH14 dated 17 November 2020 (the “Law on Environmental Protection 2020”) is regarded as a foundational legal instrument, providing strategic direction for corporate environmental activities as well as sustainable development strategies. Notably, the Law on Environmental Protection 2020 emphasizes the importance of strengthening scientific research and the development of technologies for pollution treatment, recycling, and waste disposal; prioritizing the transfer and application of advanced, high, and environmentally friendly technologies, as well as the best available techniques; and enhancing human resource training in the field of environmental protection ².

In addition, several sub-law documents also play an important role in establishing and maintaining this pillar, including:

• Decree No. 06/2022/ND-CP dated 7 January 2022 of the Government providing detailed regulations on greenhouse gas emission reduction and ozone layer protection;
• Decree No. 08/2022/ND-CP dated 10 January 2022 of the Government detailing several articles of the Law on Environmental Protection;
• Decision No. 888/QD-TTg dated 25 July 2022 of the Prime Minister approving the Scheme on setting out tasks and solutions for implementation of outcomes of the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26);
• Decision No. 896/QD-TTg dated 26 July 2022 of the Prime Minister approving the National Climate Change Strategy for the period through 2050
• Decision No. 841/QD-TTg dated 14 July 2023 of the Prime Minister issuing the Roadmap for Implementation of Vietnam’s Sustainable Development Goals toward 2030;
• Decision No. 13/2024/QĐ-TTg dated 13 August 2024 of the Prime Minister promulgating the list of sectors and greenhouse gas-emitting facilities subject to greenhouse gas inventory requirements (updated).

In parallel with specialised regulations on climate change and sustainable development, current legislations also integrate environmental protection requirements into other specific sectors, such as:

• Law on Biodiversity No. 20/2008/QH12 dated 13 November 2008;
• Law on Economical and Efficient Use of Energy No. 50/2010/QH12 dated 17 June 2010;
• Law on Crop Production No. 31/2018/QH14 dated 19 November 2018; 
• Law on Animal Husbandry No. 32/2018/QH14 dated 19 November 2018;
• Law on Water Resources No. 28/2023/QH15 dated 27 November 2023.

2.2. Legal framework governing the Social pillar

In Vietnam, the legal system related to the social pillar primarily focuses on corporate social responsibility to promote sustainable business development in in four key areas: human resources, products and services, customers, and the community. These regulations are both mandatory and integrated into support policies to encourage businesses towards comprehensive and harmonious development with society.

With respect to human resources, the law of Vietnam emphasizes the obligation of enterprises to ensure legitimate rights and interests of employees, while also receiving support from the State through policies aimed at skills enhancement and workforce development. The Labor Code No. 45/2019/QH14 dated 20 November 2019, serving as the fundamental legislation in this area, clearly sets out principles on fair working conditions, prohibition of discrimination and forced labor, and guarantees for occupational safety and hygiene. In addition, provisions on workplace dialogue, collective bargaining, and the right to join trade unions are also prescribed to ensure that employees’ voices are heard and respected throughout the enterprise’s operations.

In addition, several other important legal documents have shaped and contributed to the completion of the legal framework concerning the human resources aspect of this pillar, including:

- Law on Gender Equality No. 73/2006/QH11 dated 29 November 2006 providing obligations of enterprises to ensure gender equality, prevent and handle acts of violence and sexual harassment in the workplace;

- Law on Occupational Safety and Hygiene No. 84/2015/QH13 dated 25 June 2015 providing key provisions on ensuring occupational safety and hygiene; policies and regimes for workers affected by occupational accidents and occupational diseases, etc.

- Law on Employment No. 38/2013/QH13 dated 16 November 2013 regulating policies supporting job creation; labor market information; assessment and issuance of national vocational skill certificates; organization and operation of employment services; unemployment insurance; and state management of employment;

- Law on Social Insurance No. 41/2024/QH15 dated 29 June 2024, stipulating the rights and responsibilities of agencies, organizations, and individuals regarding social insurance and the organization of social insurance implementation;

- Law on Trade union No. 50/2024/QH15 dated 27 November 2024;

- Decree No. 58/2020/ND-CP dated 27 May 2020 of the Government providing the mandatory social insurance contribution rates to the occupational accident and occupational disease insurance fund;

- Decree No. 145/2020/ND-CP dated 14 December 2020 of the Government detailing and guiding the implementation of certain articles of the Labor Code regarding working conditions and labor relationship;

- Circular No. 10/2020/TT-BLDTBXH dated 12 November 2020 of the Ministry of Labor, Invalids and Social Affairs, detailing and guiding the implementation of certain articles of the Labor Code on the content of labor contracts, collective bargaining councils, and occupations or jobs adversely affecting reproductive functions and childcare.

In terms of products, services, and customers, the applicable legal regulations primarily focus on maintaining product quality and protecting the legitimate rights and interests of consumers to enhance business reputation and promote sustainable market practices, which are concretized in the Law on Consumer Protection No. 19/2023/QH15 dated 20 June 2023.

In terms of the community aspect, the State’s support policies for small and medium-sized enterprises (SMEs) are also a particularly important component, as reflected in the Law on Support for Small and Medium Enterprises No. 04/2017/QH14 dated 12 June 2017, and Decree No. 80/2021/ND-CP dated 15 October 2021 of the Government, which details and guides the implementation of certain articles of the Law on Support for Small and Medium Enterprises with specific measures aimed at encouraging sustainable development of this business sector, thereby contributing to the overall stability of the economy.

Additionally, strict compliance with regulations regarding the collection and use of personal data plays a crucial role in the social pillar, as prescribed in Decree No. 13/2023/ND-CP dated 17 April 2023 of the Government on personal data protection.

2.3. Legal framework governing the Governance pillar

In Vietnam, the Governance pillar is governed by a relatively comprehensive legal framework, mainly focusung on internal corporate governance matters with key elements such as as the organizational structure of enterprises, standards and obligations of managerial positions, the obligation to prepare and promulgate charters, and the internal control system. In addition, the Governance pillar also includes regulations on compliance obligations towards the State and stakeholders, such as the obligation to disclose and ensure transparency of financial, governance, and business activities, provisions on anti-corruption, anti-money laundering, and personal data protection, etc. 

Law on Enterprise No. 59/2020/QH14 dated 17 June 2020, serving as the fundamental legislation in this area, provides the organization and governance of enterprises, including organizational structures appropriate for different types of companies, qualification requirements for managerial positions, as well as the requirement to promulgate the company charter containing basic contents related to enterprise information, organizational structure, and internal governance.

In addition, the relevant legal documents forming the legal framework for this pillar include:

- Law on Cybeinformation rsecurity No. 86/2015/QH13 dated 19 November 2015 providing regulations on cyber information security activities, as well as the rights and responsibilities of agencies, organizations, and individuals in ensuring cyber information security;

- Criminal Code No. 100/2015/QH13 dated 27 November 2015 (as amended and supplemented in 2017) providing several crimes related to business activities such as tax evasion, money laundering, bribery, evasion of social insurance, health insurance, unemployment insurance contributions for employees, violations of environmental protection regulations, infringement of industrial property rights, etc.;

- Law on Cybersecurity No. 24/2018/QH14 ngày 12 June 2018;

- Law on Anti-Corruption No. 36/2018/QH14 dated 20 November 2018 providing the responsibilities of enterprises and non-state organizations in establishing internal control mechanisms, codes of conduct, financial transparency, and conflict of interest prevention to prevent corruption;

- Law on Securities No. 54/2019/QH14 dated 26 November 2019 providing the rights and obligations of organizations and individuals in the securities sector, including disclosure obligations and issues related to governance of public companies;

- Circular No. 96/2020/TT-BTC dated 16 November 2020 of the Ministry of Finance, as amended and supplemented by Circular No. 68/2024/TT-BTC providing regulations on information disclosure in the Vietnamese securities market;

- Directive No. 03/2015/CT-NHNN of the State Bank of Vietnam dated 24 March 2015 on promoting green credit growth, encouraging credit institutions to develop environmentally friendly credit policies and integrate environmental-social criteria in the appraisal and credit granting process.

3. Conclusion

It can be observed that the legal framework on ESG in Vietnam is increasingly being completed and harmonized, reflecting the country’s deepening integration into the global trend toward sustainable development and social responsibility. Vietnamese enterprises, particularly those involved in global supply chains or with foreign investment, must fully understand the importance of ESG in order to develop appropriate business models while strictly complying with applicable legal regulations. Compliance with regulations governing ESG is not only a statutory obligation but can also be regarded as a strategic move to enhance corporate reputation, increase brand value, and ensure long-term sustainable growth.

Dentons LuatViet acknowledges and thanks Junior Associate Cuong Pham for his contribution to the article.

Disclaimer: This publication is for general update. This should not be construed as professional advice for any specific case, entity, or individual. If you require further information or professional assistance concerning your specific circumstances, please feel free to contact us.

1. Resolution No. 68-NQ/TW, Section 3.2 Part III
2. Law on Environmental Protection 2020, Article 5.7