Vietnam’s SMEs Could Leapfrog the Competition by Going Green First

By Kekeletso Nkele, small.news Assistant

(small.news) — Green transition and ESG (Environmental, Social and Governance) compliance, once reserved for major corporations, may now represent a pivotal opportunity for Vietnam’s small and medium-sized enterprises (SMEs) to overtake larger competitors, reports Asia News Network.

Experts told a seminar in Ho Chi Minh City on May 12 that embracing sustainability could enable SMEs to leapfrog industry leaders and accelerate integration into global supply chains.

Speakers at the “Industry Talk: Green Transformation in Industrial Manufacturing amid New Challenges” forum highlighted a crucial shift: companies are now judged by green standards rather than size, fundamentally redrawing the competitive landscape. For Vietnamese SMEs, meeting global sustainability criteria, such as traceability and emission reductions, is increasingly essential to enter markets such as Europe and North America.

Pressure Is Coming from Every Direction

Phạm Hoài Trung, vice chairman and head of the ESG/Net Zero and Science & Technology Committee of the Vietnam Green Transformation Association, said companies now face pressure from international buyers, financial institutions, and new carbon tax rules.

Industry practices are already shifting. Nguyễn Xuân Hòa, general secretary of the Vietnam Paint and Printing Ink Association, noted that multinational firms now require inks free of banned substances and sourced from renewable resources. Nguyễn Đình Quyền, founder of ESG Education & Business, said the EU’s Carbon Border Adjustment Mechanism increases pressure on steel and aluminum, and unprepared companies risk exclusion from supply chains.

Why Smaller Businesses May Actually Have the Edge

Seminar experts argued that, contrary to expectations, SMEs are uniquely positioned to gain a competitive edge if they move quickly—by taking the lead in the green transition.

Smaller businesses are more flexible, making it easier to adjust structures, processes, and operations to market changes. Large corporations often take much longer to shift.

Quyền argued that SMEs ready to secure green certifications, ensure transparency, and implement ESG standards will be able to win major clients and stable contracts before larger, slower competitors. By taking the initiative, SMEs can capture new markets, attract financing, and solidify long-term positions in supply chains.

The financial benefits are already real. Buyers pay premium prices for greener goods. Quyền cited a rubber firm that boosted product value by proving sustainability and lower emissions.

The Mindset Problem Holding Businesses Back

Despite significant potential, a key barrier remains: many SMEs have not yet recognized that the green transition is a business imperative, not just a branding exercise.

Many SMEs still view ESG as a symbolic branding exercise rather than a core business strategy, while multinational corporations lead the trend, and many Vietnamese businesses remain unclear about the practical requirements of ESG.

Hòa said companies will not be convinced by environmental ideals alone; they want visible financial returns. He stressed the effective communication of ESG’s real benefits, such as cost savings and efficiency, so firms see results and act.

Skills Gaps and Green Finance Remain Stubborn Obstacles

Beyond mindset, structural obstacles add difficulty. Quyền cited a shortage of ESG experts and limited green finance. ESG demands skills across finance, tech, manufacturing, and governance. Green capital in Vietnam mainly targets renewable energy.

Many SMEs still rely on traditional loans. To secure funding, they must treat ESG as an investment demonstrating profitability, payback, and financial efficiency to appeal to lenders.

Where to Begin: A Practical Starting Point

For those unsure where to start, the seminar offered practical advice. Quyền said sustainable development is about stable, not rapid, growth, reducing long-term disruption risks. Businesses should start by reducing electricity and water use, optimizing the use of raw materials, reducing waste, and improving data governance.

Businesses should focus on the highest-cost or highest-emission areas and invest there, rather than spreading resources thinly.

The Next Five Years Will Be Decisive

The forum’s main message was urgent: SMEs that prepare for green transition in the next five years can gain critical market and supply chain advantages, while those who delay risk losing competitiveness both abroad and at home.

Hòa emphasized that green transition is now becoming a requirement, not an option, for businesses wanting to compete, join global supply chains, and grow sustainably.

An Industry Platform on the Horizon

The seminar took place before the industrial exhibitions at the Saigon Exhibition and Convention Center, June 10-12. Over 400 brands from 16 countries and 8,000 visitors will attend, showcasing products and technology in materials, coatings, rubber, plastics, paper, packaging, recycling, and sustainability solutions.