Investing in ESG shapes the energy transition process.

Singapore's Ambassador to Vietnam, Jaya Ratnam, believes that ESG investments can play a catalytic role in Vietnam's energy transition process in three ways...

The renewable energy sector is one of the fastest-growing industries in the world, creating millions of jobs and driving innovation.

ASEAN is facing significant challenges in meeting the increasing energy demand of a growing population and rapid economic growth while still pursuing ambitious carbon neutrality commitments and climate goals. Vietnam, as one of the fastest-growing economies in Southeast Asia, is leading this major ongoing transition.

THE ENERGY TRANSITION PROCESS REQUIRES SIGNIFICANT INVESTMENTS IN FINANCE AND TECHNOLOGY

At the conference "How ESG Investment is shaping the Transition process" organized by VIETSTAR Consulting and Training Joint Stock Company and Singapore Management University (SMU) on the morning of October 12, Singapore Ambassador to Vietnam “Vietnam has experienced rapid economic growth in the past decades, which naturally leads to an increase in energy demand,” said Nam Jaya Ratnam.

Accordingly, Vietnam has set ambitious goals to transition to renewable energy sources. By 2030, Vietnam aims to increase the proportion of renewable energy, such as wind, solar, and hydroelectric power, while reducing dependence on coal - achieving net zero emissions by 2050.

Ambassador Jaya Ratnam said that ESG investments can act as a catalyst for Vietnam's energy transition.

According to Ambassador Jaya Ratnam, across Southeast Asia, governments are facing a gap between aspirations and reality. On the path to achieving Net Zero, promoting energy efficiency, implementing carbon pricing, investing in energy transition and renewable energy are crucial. New technologies and solutions such as carbon capture, utilization, and storage also play a significant role.

“This transition will require significant financial and technological investment – ​​and this is where ESG frameworks come into play,” said Ambassador Jaya Ratnam, noting that ESG investments can act as catalysts for Vietnam's energy transition process in three ways.

Firstly, ESG-driven investments prioritize renewable energy projects, promote carbon emissions reduction, and support Vietnam's climate goals. This includes investing in large-scale solar energy farms, offshore wind projects, and energy-saving technologies.

Secondly, ESG investors are focusing on the social aspect, ensuring that energy projects benefit the local community by creating jobs, developing skills, and ensuring access to energy for rural areas and underserved regions.

Thirdly, ESG frameworks encourage corporate governance, transparency, and better accountability in the energy sector. This is crucial for attracting international capital, as investors seek to collaborate with companies and governments committed to ethical practices and sound governance.

Ms. Pham Thi Thu Hang, Director of the Vietnam-Singapore Business Forum (VSBF) and CEO of VIETSTAR, mentions that ASEAN countries including Singapore, the Philippines, and Vietnam are implementing strong energy transition strategies. An example is Vietnam's Hydrogen Energy Development Strategy effective from February 7, 2024, supporting sustainable development goals, expanding electricity capacity, and reducing carbon emissions.

"This will attract the interest of international investors, R&D entities, and technology stakeholders, while also driving ESG investments in the energy sector," Pham Thi Thu Hang stated.

Professor Hao Liang, Co-Director of the Singapore Center for Green Finance, shared about the benefits of ESG in energy transition, stating that ESG is not only about managing non-financial risks but also about creating long-term value through sustainable business activities. Enhancing trust with stakeholders and compliance also play a crucial role.

To achieve sustainable development, we need to consider the benefits of stakeholders and outcomes measured based on ESG indicators," Professor Hao Liang said.

COUNTRIES AND BUSINESSES EMBRACING CHANGE WILL LEAD GLOBALLY

Mr.Eddie Tritton, Managing Director of the Executive Development Programme Office at Singapore Management University (SMU) and Co-Director of the Vietnam-Singapore Business Forum (VSBF), believes that the energy transition process is not only a necessity but also an opportunity.

A shift towards cleaner, more sustainable energy sources such as solar, wind, hydro, and bioenergy brings a brighter future.

"But this transition is not just about shifting energy sources; it's about rethinking how we produce, distribute, and consume energy, requiring collective efforts from governments, businesses, and individuals," Eddie Tritton said.

"In addition to mandatory environmental requirements, the energy transition process is also an economic opportunity. The renewable energy sector is one of the fastest-growing industries globally, creating millions of jobs and driving innovation."

According to him, countries and companies that accept this transition will be the ones leading the global economy of the future. This transition will not come without challenges. It will require significant investments in infrastructure, new regulatory frameworks and, most importantly, a focus on equity.

"The energy transition process must also ensure that no community is left behind, whether it's coal miners in traditional energy sectors or rural areas still lacking access to modern energy systems. We must ensure that the benefits of this new energy economy are shared by everyone," emphasized Eddie Tritton.

Ambassador Jaya Ratnam believes that Singapore can support Vietnam's energy transition in three ways. Firstly, through regional cooperation. Singapore is a leading financial center in Asia, and its role as a conduit for green finance is crucial. Singapore is also facilitating favorable conditions for cooperation among ASEAN countries to enhance energy security and sustainability in the region, especially through the ASEAN Power Grid.

The second way is through technology transfer and innovation support. Singapore is a hub for advanced technologies in energy efficiency, smart grids, and renewable energy systems. Through partnerships with Vietnamese companies, Singapore can accelerate the adoption of clean energy technologies.

Companies based in Singapore can provide solutions in areas such as solar energy integration, grid optimization, and energy storage—all essential for Vietnam's renewable energy sector to scale up effectively.

The third aspect is capacity building and skill development. According to the ambassador, Singapore is well-positioned to provide technical expertise and training for Vietnamese experts in the energy sector. This includes knowledge sharing, collaborative research, and developing a skilled workforce capable of managing and operating Vietnam's future energy systems.

By leveraging its expertise in clean energy and sustainable urban planning, Singapore can assist Vietnam in creating greener energy infrastructure.

Within the framework of the event, Singapore Management University (SMU) and VIETSTAR Consulting and Training Joint Stock Company have collaborated to develop and launch the ASEAN 1-Year Sustainable Energy Development Scholarship Program. The program, implemented over 12 months in Vietnam, Singapore, and South Korea, with the support of energy corporations such as Semcorp Industries, SK Group, GE Vernova, aims to equip Vietnamese leaders with the knowledge, skills, and tools necessary for the energy transition process.

Source: vneconomy.vn