ESG strategy for small and medium enterprises: From compliance pressure to growth opportunity

DNHN - Amid digital transformation and increasing demands for sustainable development, small and medium enterprises (SMEs) in Vietnam are facing mounting pressure to adapt swiftly or risk being left behind.

Amid digital transformation and increasing demands for sustainable development, small and medium enterprises (SMEs) in Vietnam are facing mounting pressure to adapt swiftly or risk being left behind. In an interview with the Business and Integration Magazine, Mr. Ren Varma, Regional Director of ACCA for Mainland Southeast Asia, emphasized that adopting ESG standards and enhancing accounting capabilities is not just a trend but a survival strategy. According to him, these efforts are crucial for SMEs to strengthen resilience, attract resources, and achieve sustainable growth in the new era.

How do you assess the importance of the strategic partnership between ACCA and FPT in promoting training and enhancing the capabilities of accountants in Vietnam, especially in the context of digital transformation and sustainable development?

Mr. Ren Varma: The strategic partnership between ACCA and FPT is both timely and transformative. It reflects our shared commitment to future-proof the finance and accounting profession in Vietnam, equipping it with world-class competencies to thrive in an era defined by digital acceleration and sustainability imperatives.

By aligning ACCA’s globally recognised qualifications and thought leadership with FPT’s leadership in technology and innovation, we are co-creating a powerful ecosystem for capacity building. This collaboration empowers accountants in Vietnam to develop critical expertise in areas such as digital finance, ESG reporting, and sustainability assurance - skills that are increasingly essential in today’s evolving business landscape.

Importantly, this partnership directly contributes to Vietnam’s national priorities in digital transformation and sustainable development. As stakeholder expectations rise around transparency, accountability and responsible business increase, our joint initiatives ensure that Vietnamese finance professionals are not only keeping pace with change but actively shaping a resilient and sustainable future.

In April 2024, ACCA announced a strategy to lead the accounting and auditing profession in responding to global changes, particularly in sustainability reporting and ESG. What specific recommendations does ACCA have for Vietnam and the Asia-Pacific region?

Mr. Ren Varma: ACCA’s global strategy positions the profession as a catalyst for inclusive and sustainable progress. We believe that professional accountants must be equipped to respond to today’s complex global challenges, particularly around climate change, responsible governance, and ethical leadership.

For Vietnam and the wider Asia-Pacific region, we recommend a three-fold approach:

First, embrace globally aligned sustainability disclosure standards such as IFRS S1 and S2 to ensure transparency and comparability.

Second, invest in upskilling the profession through accessible, sustainability-focused education and assurance programmes.

Third, foster policy coherence by aligning national regulatory frameworks with the UN Sustainable Development Goals (SDGs), creating an enabling environment for businesses to contribute meaningfully to long-term value creation.

We also advocate for deeper cross-sectoral collaboration - government, academia, business, and professional bodies - to build a future-ready ecosystem that champions innovation, resilience and sustainable impact.

As Vietnam commits to achieving Net Zero by 2050, the collection and reporting of environmental and green data impose increasing demands on the accounting profession. In your opinion, what key skills and standards should accountants be equipped with to adapt and maximize their role in this transition?

Mr. Ren Varma: Professional accountants are uniquely positioned to bridge the gap between sustainability ambition and execution. Their role is critical in integrating financial performance with environmental and social value, and in enabling data-driven decision-making. 

To navigate this transition effectively, accountants must develop a robust understanding of sustainability reporting frameworks, including IFRS S2, as well as carbon accounting and ESG data analysis. Equally important are broader capabilities — ethical leadership, systems thinking, and stakeholder communication — that allow professionals to offer trusted insights in complex, multi-stakeholder environments.

To support this, ACCA has introduced the Professional Diploma in Sustainability, a globally accessible qualification designed to equip professionals with practical knowledge and skills in sustainability reporting, strategy, and assurance. This qualification empowers accountants to lead with confidence in delivering Vietnam’s Net Zero ambitions and advancing the nation’s green growth agenda.

Technology is playing an increasingly significant role in sustainability reporting, but it also poses challenges regarding data accuracy and transparency. What is your perspective on the risks and opportunities of digital innovation in the finance and accounting sector in driving sustainable development?

Mr. Ren Varma: Digital innovation is a powerful enabler of sustainable development. Emerging technologies such as AI, cloud-based accounting platforms, and blockchain are revolutionising the way we collect, verify and report ESG data – making it more accurate, timely and accessible. These tools can help organisations embed sustainability into their operational and financial DNA.

However, with opportunity comes responsibility. The profession must be alert to challenges including data privacy, cybersecurity risks, and algorithmic biases. Trust, transparency, and ethical governance must remain at the heart of how we deploy and manage digital tools.

At ACCA, we envision the accountant of the future as a digitally fluent, values-driven professional who is capable of interpreting complex data, managing ESG risks and opportunities, and contributing strategic insights that drive sustainable value creation.

As sustainability and ESG reporting requirements continue to grow, what advice would you offer to small and medium-sized enterprises (SMEs) in Vietnam on gradually adopting these standards, leveraging technology, and strengthening their accounting capabilities while considering their limited resources and scale? 

Mr. Ren Varma: SMEs are the backbone of Vietnam’s economy and essential players in global supply chains. Embracing ESG principles is no longer optional, it’s a vital pathway to resilience, competitiveness, and long-term success.

Our advice to SMEs is to start small, stay focused, and build progressively. Begin with what matters most – such as monitoring energy use, reducing waste, or embedding basic governance practices. These small steps can yield meaningful insights and lay the foundation for more structured reporting over time.

Leveraging cost-effective digital solutions and partnering with trusted advisers, particularly small and medium-sized accounting practices (SMPs), can significantly ease the transition. ACCA supports this journey through a range of practical guidance, tools, and the Professional Diploma in Sustainability – which offers accessible, flexible learning for SME leaders and finance teams. 

By adopting ESG standards gradually and thoughtfully, SMEs can unlock new market opportunities, attract sustainable finance, and build stronger, future-ready business models.  The key is to begin the journey now, because every step forward strengthens your ability to adapt and thrive in the future economy. 

Thank you for your valuable insights!

Lan Nguyen - An Thao