sustainablevietnam.com September 5, 2023

By Christina Ameln, Sustainability Strategist and Advisor –

The EU’s Corporate Sustainability Reporting Directive (CSRD) is the most ambitious reporting directive putting climate, nature and social impacts (non-financial) equal to financial reporting. While it might seem as a regulation aimed exclusively at companies in the EU, the impact will be wide-reaching. Non-EU companies will also feel the impact, including in Vietnam. The potential significance of this regulation on Vietnamese companies, investments and especially Vietnam’s supply chain cannot be ignored.

For us to understand the impact, let’s review the:

• EU Green Deal;
• Corporate Sustainability Reporting Directive (CSRD);
• European Sustainability Reporting Standards (ESRS);
• Impact on Vietnam with a focus on company, investors and value chain with suppliers as the focus; and
• How this is not just about compliance but how organizations will put sustainability strategically front and center.

EU Ambitions: Green Deal

Let’s take a step back to understand where this all originates. In 2020, the European Commission launched its ambitious European Green Deal. The goal is to become the first climate-neutral continent by 2050. And among other sustainability related goals, the Green Deal aims to reduce Europe’s greenhouse gas emissions by 2030.

But the EU cannot do it alone.

Market participants, such as corporates to financial market players, play an important role in achieving and contributing to these targets in shifting away from an economy that encourages carbon-intensive business to one that drives transformation to a zero-carbon society. There is also the question of funding: According to the EU Commission, Europe will need an estimated EUR 350 billion in additional investment per year over this decade to meet its 2030 emissions-reduction target in energy systems alone, alongside the EUR 130 billion it will need for other environmental goals.