On the morning of October 31, 2024, National Economics University (NEU) organized a national scientific conference on “European Union Legal Issues Concerning the Emerging ESG Market and Policy Implications for Vietnam.”

An overview of the conference

External delegates attending the conference included Dr. Le Huy Khoi, Deputy Director of the Vietnam Institute of Strategy and Policy for Industry and Trade, Ministry of Industry and Trade; Assoc. Prof. Dr. Nguyen Hien Phuong, Deputy Director of the Institute of Comparative Law, Hanoi Law University; Assoc. Prof. Dr. Do Phu Hai, Committee for Deputies’ Affairs, Office of the National Assembly; To Ly Cuong, Central Committee of the Ho Chi Minh Communist Youth Union; Assoc. Prof. Dr. Nguyen Ngoc Ha, Institute of Innovation Research, Foreign Trade University; Nguyen Thi Thanh Huyen, Hung Thinh Law Company Limited; Assoc. Prof. Dr. Dinh Thi Mai, Faculty of Law, Dalat University; Dr. Tong Hung Tam, Academy of Policy and Development, Ministry of Planning and Investment; Pham Hong Ngoc, Legal Affairs Lead for Siemens in Vietnam; Nguyen Minh Hong, Director of Northern Thermal Power Repair Services Joint Stock Company; and Vu Nhu Anh, Net Zero Program, Vietnam Television.

Representing NEU were Assoc. Prof. Dr. Nguyen Thanh Hieu, Vice President; Prof. Dr. Tran Tho Dat, Chairman of the Science and Academic Council; Assoc. Prof. Dr. Nguyen Thanh Ha, Chairman of the Advisory Council; and Dr. Hoang Xuan Truong, Dean of the Faculty of Law. Also attending were representatives of the leadership of the University’s colleges, departments, faculties, schools, institutes, centers, and sociopolitical organizations, along with faculty, staff, and students.

Assoc. Prof. Dr. Nguyen Thanh Hieu, Vice President of NEU, delivers remarks.

In his opening remarks, Assoc. Prof. Dr. Nguyen Thanh Hieu, Vice President of NEU, noted that ESG—Environment, Social, and Governance—is currently a set of three standards used to measure factors related to businesses’ sustainable development strategies and activities. ESG helps relevant organizations identify risks and opportunities, as well as assess the impact of applying these standards in their operations.

Meeting green development and sustainable development requirements when working with EU partners under free trade agreements (FTAs), especially the EVFTA, is not a new issue. Indeed, Assoc. Prof. Dr. Nguyen Thanh Hieu, Vice President of NEU, noted that it has been discussed many times.

However, according to Assoc. Prof. Dr. Nguyen Thanh Hieu, despite frequent discussions, some Vietnamese businesses still fail to qualify for exporting or have their exported goods returned from the EU market. The main reason is that these businesses do not familiarize themselves with or comply with legal regulations. Moreover, European partners now recognize Vietnam as a rapidly developing country advancing to middle-income status, and are therefore imposing increasingly stringent technical barriers and product quality standards on goods imported from Vietnam.

Assoc. Prof. Dr. Nguyen Thanh Hieu also noted that the EU has codified regulations relating to sustainable development and ESG (environmental, social, and governance). Compliance therefore requires not only action by businesses but also adjustments to Vietnam’s own policies and laws. The Government should support businesses in complying with ESG requirements and develop an appropriate legal framework for the new context.

Assoc. Prof. Dr. Nguyen Ngoc Ha, Institute of Innovation Research, Foreign Trade University, presents a paper on the European Union’s Directive on corporate sustainability reporting and considerations for Vietnam.

Assoc. Prof. Dr. Do Phu Hai, University of Economics and Business, Vietnam National University, Hanoi, presents a paper on recommendations for policy action based on research into European Union legal issues concerning the ESG market.

At the conference, experts argued that legal regulations, particularly those related to ESG, need to be amended and updated to enhance businesses’ competitiveness in supply chains and facilitate their exports.

According to Assoc. Prof. Dr. Do Phu Hai, Committee for Deputies’ Affairs, Office of the National Assembly, the EU has introduced a Corporate Sustainability Accounting Law requiring businesses to produce detailed ESG reports. Vietnam could therefore develop a similar system to increase transparency. This should include strengthening the auditing and monitoring of ESG reports, incorporating ESG into the strategy for building a competitive economy, and requiring large businesses to disclose ESG information…

Similarly, the EU’s Sustainable Classification Law (EU Taxonomy) defines sustainable activities and helps promote green investment, suggesting that Vietnam should develop a similar ESG classification system. The law on social and environmental due diligence obligations (CSDDD) requires businesses to examine social responsibility in their supply chains. Vietnam could learn from and apply this approach by promoting transparency and accountability, addressing violations, and supporting small and medium-sized enterprises in conducting ESG due diligence…

The EU also encourages businesses to integrate ESG to enhance competitiveness. Vietnam should offer similar incentives by developing supportive policies, promoting green investment and green finance, and strengthening ESG awareness and training… “The EU’s ESG legal framework offers valuable lessons to help Vietnam improve its policies, enhance competitiveness, and promote sustainable development,” emphasized Assoc. Prof. Dr. Do Phu Hai.

Nguyen Thi Thanh Huyen, Hung Thinh Law Company Limited, presents a paper on European Union legislative trends in regulating ESG in labor and lessons for Vietnam.

Assoc. Prof. Dr. Tran Van Nam, Faculty of Law, NEU, presents a paper examining automaker Volkswagen’s violations of the Clean Air Act and their implications for the need to use early mediation in ESG-related disputes.

Representing more than 20 authors from the College of Economics and Public Management, NEU, Assoc. Prof. Dr. Tran Van Nam presented a paper on the Volkswagen (Germany) emissions scandal and its consequences for the automaker in terms of financial and reputational damage. The paper analyzed the impact of Volkswagen’s fraudulent conduct, which also adversely affected supply chains associated with its diesel engines, causing revenue losses and diminished standing within the industry.

Assoc. Prof. Dr. Tran Van Nam emphasized that businesses should learn lessons from Dieselgate when managing crises. Volkswagen’s concealment and lack of transparency in explaining the incident made the situation worse. This also offers an important lesson for other businesses in developing transparent and consistent communication strategies. Dieselgate involved not only legal violations but also negative environmental impacts caused by emissions exceeding permitted standards. The paper highlighted the effects of NOx emissions on human health and the environment, helping the community better understand the serious consequences of fraudulent conduct. In Vietnam, where in-depth ESG knowledge is not yet widespread and the concepts of ESG and early mediation remain new to many businesses, early mediation procedures need to be specifically regulated. Existing legislation needs to support early mediation in ESG disputes, for example by recognizing and enforcing early mediation outcomes outside litigation or conventional commercial mediation procedures. In the coming period, Vietnam needs to codify early mediation regulations, expand ESG training programs and conferences, and encourage business associations and international organizations to share knowledge and practical experience to raise awareness.

Delegates exchange views and discuss issues at the conference

With 34 research papers accepted for publication in its peer-reviewed scientific proceedings, the conference provided a comprehensive overview of ESG principles and the evolution from voluntary standards to mandatory regulations, highlighting recent legal developments such as Germany’s Supply Chain Act and the EU’s Corporate Sustainability Directive. Drawing out ESG lessons for Vietnam was an important contribution by the authors and speakers who submitted papers and participated in this timely and practical event.

Additional photos from the conference:

Article and photos: Department of Communications

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