What is ESG for SMEs? A Getting-Started Guide for Small and Medium Enterprises in Vietnam
ESG is no longer a privilege of large corporations. This article explains ESG for SMEs, the GRI/SASB frameworks, and a feasible, cost-effective roadmap.
February 14, 2026 · 12 phút
Photo: Kindel Media / Pexels
Quick summary
ESG (Environmental — Social — Governance) is a framework for measuring and reporting a company's sustainability. For Vietnamese SMEs, ESG is not a legal burden but a tool for accessing capital, export markets, and global supply chains. Start with a Scope 1–2 emissions inventory, basic HR policies, and transparent governance.
What is ESG — and why can't SMEs ignore it?
ESG is an acronym for Environmental, Social and Governance — the three pillars used to assess a company's level of sustainable development and responsibility. In Vietnam, ESG was once seen as a story for large listed corporations. But as the European Union (EU) begins applying the Carbon Border Adjustment Mechanism (CBAM) from 2026, and as global brands such as Nike, IKEA, and H&M require their suppliers to report supply-chain emissions, any exporting business — including SMEs — is compelled to engage with ESG.
According to data from the General Statistics Office, small and medium enterprises account for roughly 97% of the total number of businesses in Vietnam and contribute nearly 60% of GDP. As a result, the ESG capability of the SME sector is the competitiveness of the entire economy.
The three E–S–G pillars explained simply
Environmental
Measures a company's impact on nature: greenhouse gas (GHG) emissions, energy and water consumption, waste management, and resource use. For manufacturing SMEs, the most important metric is usually emissions intensity per unit of product (kgCO₂e/product).
Social
Covers labour relations, health and safety, diversity and inclusion, impact on the local community, and consumer rights. An SME that executes the S pillar well typically has low turnover and high productivity.
Governance
Relates to decision-making structures, financial transparency, anti-corruption, and customer data protection. This is the area where Vietnamese SMEs are often weakest, because businesses remain heavily family-run.
Which standards framework is right for SMEs?
| Framework | Focus / when it fits |
|---|---|
| GRI Standards (Global Reporting Initiative) | The most widely used framework globally, applied via the modular Universal Standards (GRI 1, 2, 3) by organisations of any size |
| SASB (Sustainability Accounting Standards Board) | Industry-specific — suitable when an SME needs to report to foreign investors |
| TCFD (Task Force on Climate-related Financial Disclosures) | Focused on climate risk, necessary if the business works with development banks |
| ISO 14064 | The greenhouse gas inventory standard, the technical foundation for any environmental report |
For SMEs just getting started, GROW recommends adopting the GRI Standards (applied with GRI's SME-oriented guidance), combined with an emissions inventory under ISO 14064-1 for Scope 1 and Scope 2 in the first year.
A 12-month ESG start-up roadmap for SMEs
| Stage | What to do |
|---|---|
| Months 1–2 | Materiality assessment — identify the 5–7 ESG topics with the greatest impact on the business's operations and stakeholders |
| Months 3–4 | Baseline emissions inventory for Scope 1 (direct fuel combustion) and Scope 2 (purchased electricity) |
| Months 5–6 | Establish HR policies, a code of conduct, and an internal whistleblowing channel |
| Months 7–9 | Set up an ESG data-recording system — a spreadsheet or a dedicated platform |
| Months 10–12 | Publish the first-year ESG report — just 12–18 pages, honest, with clear targets for the following year |
Real costs: not as expensive as you think
A manufacturing business of 50–200 employees can implement its first ESG year for a total cost ranging from VND 150–400 million, including consulting fees, data-recording software, GHG inventory, and staff training. This investment is typically recouped within 18–24 months through energy savings, access to green credit at preferential interest rates, and new orders from international customers.
ESG is not a cost — it is an investment in long-term competitiveness.
Common mistakes when SMEs implement ESG
- Copying a large company's report without a materiality assessment → a long but meaningless report.
- Doing it just for show to win a tender → lacking real data, not sustainable.
- Focusing solely on the environment, neglecting S and G.
- Failing to assign an owner — ESG needs a focal-point staff member, even in a dual role.
GROW accompanies SMEs on the ESG journey
Through the Green Transition Advisory pillar, GROW provides emissions inventory packages, builds GRI-based reports, and connects businesses to green credit funds such as IFC, ADB, and GCF. Learn more about the Net Zero roadmap or book a free consultation.
Frequently asked questions
Are SMEs required to produce ESG reports?
There is currently no legal requirement for SMEs to disclose comprehensive ESG reports. However, Decree 06/2022/ND-CP requires large emitting facilities to conduct greenhouse gas inventories. When exporting to the EU or joining the supply chain of a multinational corporation, an ESG report becomes a prerequisite.
How much does it cost a mid-sized SME to implement ESG?
In the first year, the total cost typically ranges from VND 150–400 million for a business of 50–200 employees, covering consulting, software, GHG inventory, and training. From the second year, costs fall by 40–60% as the system runs steadily.
Should I start with the GRI or the SASB framework?
GRI Standards suits businesses just getting started because of its modular structure, which can be expanded gradually. SASB is more appropriate once a business already has foreign investors as stakeholders and needs to report by industry.
Does ESG help a business access cheaper capital?
Yes. Vietnamese banks such as BIDV, Vietcombank, and VietinBank, together with international institutions IFC, ADB, and GCF, all offer green credit packages with interest rates 0.5–1.5 percentage points lower than ordinary loans. The condition is that the business must have verified ESG data.
Who should be responsible for ESG in an SME?
For SMEs under 100 employees, a deputy director in a dual role is reasonable. For businesses over 100 employees, a part-time ESG Officer is advisable. GROW trains and certifies ESG Officers in just 6 weeks.