Hanoi (VNA) – Amidst increasingly complicated climate change, impact investment is emerging as a key driver for sustainable development. Strongly affirming this trend, the Vietnam Impact Investment Forum 2024, taking place on October 24, brought together more than 100 representatives who are leaders, experts, investors, and businessmen to discuss to create a more prosperous and equitable future for Vietnam.

Innovative investment approach

Themed “Driving impact investment for a sustainable future”, the forum was held by the Enterprise Development Institute under the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the Impact Investment Exchange (IIX) funded by the Global Affairs Canada (GAC).

Director of the VCCI’s Enterprise Development Institute Luong Minh Huan said that impact investment is a concept that has started to gain traction in Vietnam. It involves investing in projects aimed at generating positive social or environmental effects. This innovative approach seeks to enhance the contributions of the private sector to sustainable development.

In line with global trends, Vietnam has a vibrant and rapidly growing impact investing ecosystem. According to a report from the United Nations Development Programme (UNDP) and the Ministry of Planning and Investment, there are approximately 22,000 social impact enterprises in the country, with this number continuously increasing each year. Of these, 89% are classified as micro- or small-sized enterprises, and 72% have annual revenues below 5 billion VND (196,600 USD).

These businesses are primarily concentrated in sectors such as agriculture, fisheries, food processing, skills training and non-agricultural livelihoods, and business consulting and handicrafts.

With this rapidly developing impact investing ecosystem, Vietnam has an opportunity to become a leading impact investment hub in Southeast Asia, Huan stated, pointing to several challenges related to the legal framework and capital access.

Therefore, this forum created a platform for investors, businesses, and policymakers to build collaborative relationships, share ideas, and develop strategies to support enterprises that generate social impact, with focus on assisting vulnerable communities, particularly women, by helping social impact enterprises access investment capital, he added.

Vietnam among leading group of ASEAN

A highlight of the forum was the launch of the Report on Impact Investment Index (Orange Index) - A breakthrough measurement tool that helps assess countries' progress on the path to a sustainable, inclusive future. The index evaluates three main pillars: Community Impact - Gender Equality - Climate Protection with a scale of 1 to 100 (in which 100 is the highest rating of achievements).

According to the report, Vietnam Orange Index 2024 is 50 points, ranking among the leading countries in ASEAN and surpassing the global average of 41 points. Vietnam has made significant progress in the field of gender equality with 49 points, higher than the global average and surpassing the majority of the regional countries. This reflects the important role of social impact businesses in women’s empowerment through leadership and economic participation.

However, Vietnam has challenges in the field of environmental sustainability, with only 43 points. This reflects areas where specific interventions are needed, especially in waste management, water conservation and soil health.

According to Prof. Durreen Shahnaz, CEO and Founder of IIX, the 2024 Orange Index shows that Vietnam is an economy on track to lead the next wave of sustainable and inclusive growth in ASEAN .

Shawn Steil, Canadian Ambassador to Vietnam, emphasised his country's commitment to promoting impact investment in Vietnam. The Canadian development cooperation programme is helping attract private capital to support sustainable and inclusive development in Vietnam, and partnering with organisations such as the Impact Investment Exchange (IIX) and the VCCI.

ꦅ Canada is committed to supporting Vietnam's transition into an impact investing hub in Southeast Asia, promoting the country's progress toward achieving comprehensive development goals, the diplomat asserted./.