Sustainable Investing in Emerging Market : What Are Reasons for Vietnamese Fund Companies to Take Part in Sustainable Investing?

Abstract

The goal of this study is to identify factors driving Vietnamese fund companies to engage in sustainable investing, as well as how ESG is integrated and measured. This research paper is written in the context of climate change issues, raising the importance of sustainability and the demand for sustainable investing practices as a way to reduce the worst effects.

The study used a qualitative research method in which data is primarily collected from secondary sources: business journals, newspapers, and articles. PwC’s readiness survey was examined to identify factors driving responsible investors. Two Vietnamese ESG funds were also studied for a benchmark review and conclusion.

A net zero transition is underway, which has caused emerging countries like Vietnam to adopt ESG in recent years. Due to new ESG regulations, strong demand from investors, and favorable macro conditions, Vietnam represents an appealing market internationally and privately. These are some of the reasons why Vietnam receives private and international investments in its economy. Additionally, these two Vietnam ESG funds may share a slightly common ESG integration approach, but ESG performance measurement is done differently. This is because each fund company may have a different investment strategy, objectives, and requirements. It appears that the industry has not yet found the universal approach regarding ESG integration and measurement.