COP26 net zero commitment gives investors a key role to play in the country’s ESG history

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The carbon footprint of the trust portfolio is 32% lower than the benchmark of the Vietnam All Share national stock market (VNAS)

VietNam Holding Ltd (LSE: VNH) said it will engage closely with its holding companies in the Southeast Asian country on climate change after Prime Minister Pham Minh Chinh committed to phasing out coal and committing to achieving a net zero carbon footprint. emissions by 2050.

The investment trust, which invests in high-growth companies in Vietnam, said it will step up work with boards and senior management on how to measure and report on sustainability by offering a training and encouraging them to adopt internationally accepted accounting standards.

“Vietnam has quickly become a key country in global supply chains, and local business leaders know that they will not only be held accountable for sustainability and their carbon reduction strategies, but also to take more action to ensure that they meet their objectives and respond to stakeholder demands. “the trust said in its monthly report to investors.

Earlier this year, VNH’s board of directors pledged its own allegiance to the Paris Agreement and commitment to the Climate-Related Financial Disclosures Task Force (TCFD) in addition to becoming a member of Asia. Investor Group for Climate Change (AIGCC).

Although Vietnam is still primarily a coal-fired country, it is the largest renewable energy market in the region and the government has been proactive in directing investments towards a greater mix of clean sources.

The carbon footprint of the trust’s portfolio is 32% lower than the benchmark of the Vietnam All Share national stock market (VNAS), said VNH, due to the active management style of the investment manager Dynam. Capital in sector allocation and company selection.

“VNH is agile and can navigate businesses large and small and maintain a high level of engagement with issuers to advance their own ESG journeys as well,” the company added.

“Foreign multinationals have continued to gain a foothold in the country in part because of its strategic location at the crossroads of Southeast and Northeast Asia and as the government continues its process of privatization and liberation of the country. state capital.

“Foreign investors can also play an increasingly essential role in Vietnam’s ESG history, which now accounts for 30% of the MSCI Frontier Market.

“As Vietnamese listed companies start to step up their game on sustainability reporting and other issues, and capital market reforms continue to be implemented, the prospect of possible inclusion in the MSCI Emerging Market Index could whet the appetite further. “

The company also noted that the VNAS index set a new record in October as cities in the country’s southern provinces gradually began to reopen and nearly 60% of the population had now received at least one jab.

VNH continued its outperformance of the VNAS index with NAV up 7.3% for October, with gains coming mainly from owned real estate companies as well as steelmaker HPG, IT group FPT and brokerage firm VND.

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