Foreword from the Expert Team:
Over more than 5 years of accompanying hundreds of Vietnamese businesses on their green transition and ESG compliance journey, we – Carbon Credit Viet Nam Joint Stock Company – have observed a worrying reality: most businesses still do not clearly know whether they fall within the scope of mandatory ESG reporting, and if so, which regulations they must comply with.
The question “Which businesses are required to prepare ESG reports?” seems simple, but in practice it is extremely complex, as businesses must simultaneously contend with domestic regulations (Circular 96/2020/TT-BTC) and a host of international requirements such as the EU’s CSRD, the US SEC rules, and the ISSB standards now being widely adopted across Asia.
This article has been compiled to provide your business with a comprehensive, systematic picture, updated through February 2026, of ESG reporting obligations – from Vietnamese legal regulations to the international legal frameworks that directly affect exporters and businesses in global supply chains.
1. Overview: A rapidly changing ESG legal landscape
The 2025-2028 period is an important implementation phase for ESG legal frameworks worldwide. Requirements for preparing an ESG Report are also expanding across many markets. According to the IFRS Foundation (2025), 37 countries and territories have adopted or are preparing to adopt ISSB standards. Together, these markets account for around 60% of global GDP.
For Vietnamese businesses, ESG compliance pressure comes not only from domestic regulations but also from supply chain due diligence requirements – particularly the CSDDD Directive and the value chain reporting requirements under the EU’s CSRD, which compel European buyers to collect ESG data from their suppliers (PwC Vietnam, 2024).
2. Vietnamese regulations: Circular 96/2020/TT-BTC
2.1. Scope of application
Circular 96/2020/TT-BTC was issued by the Ministry of Finance on 16/11/2020, taking effect from 01/01/2021, replacing Circular 155/2015/TT-BTC with significantly expanded sustainability disclosure requirements (Ministry of Finance, 2020).
Under Article 2 of the Circular, the entities required to prepare sustainability reports include:
Public companies: Including both listed companies (HOSE, HNX) and unlisted public companies
Securities companies: All licensed securities companies
Fund management companies: All investment fund management companies
Bond issuers: Enterprises issuing bonds to the public
Large-scale public companies: Charter capital of VND 120 billion or more – subject to enhanced reporting obligations
Of note: Circular 68/2024/TT-BTC added an English-language disclosure requirement effective from 01/01/2025 for large-scale public companies (Slaughter and May, 2025).
2.2. Mandatory report content
Under Appendix IV Section II.6 of the Circular, sustainability reporting must cover several key areas. Environmental indicators include raw materials, energy, water and greenhouse gas emissions. Social indicators cover labor, occupational health and safety, and community matters. Governance indicators include governance structures and business ethics (Keslio, 2024).
Businesses may integrate their ESG Report into the annual report or prepare a standalone sustainability report. The Circular also encourages the use of recognized international standards. The GRI Standards are mentioned as a relevant reference framework (Green in Vietnam, 2024).
2.3. Filing deadlines and sanctions
The annual report (including the sustainability section) must be filed within 90 days from the end of the financial year – i.e., by 31/3 for companies whose financial year ends on 31/12. Under Decree 156/2020/ND-CP (as amended by Decree 128/2021/ND-CP), administrative fines in the securities sector are stipulated as follows (Mondaq, 2022):
| Violation | Penalty amount |
|---|---|
Late filing or failure to file reports | 70 – 100 million VND |
Disclosure of false or inaccurate information | 100 – 200 million VND |
The State Securities Commission has actively enforced these regulations, with numerous sanctioning decisions issued during 2024-2025 (Vietnam.vn, 2025).
3. International requirements: The EU, the US and global standards
3.1. The European Union’s CSRD Directive
The Corporate Sustainability Reporting Directive (CSRD – Directive 2022/2464) established an ambitious framework for sustainability reporting. It defines how affected businesses must disclose sustainability information in their ESG Report. However, the Omnibus I package adopted in December 2025 significantly narrowed its scope (European Commission, 2025).
Under the new rules, the applicability thresholds have been raised substantially. Businesses must have more than 1,000 employees and net turnover of at least EUR 450 million. Previously, the thresholds included 250 employees and EUR 50 million in turnover. These changes reduce the number of directly affected businesses by approximately 80-90%.
CSRD implementation timeline after the Omnibus I adjustments:
| Business group | Old timeline | New timeline |
|---|---|---|
Large listed companies (under the former NFRD) | FY2024 (report 2025) | Unchanged |
Other large companies (>1000 employees, >€450M) | FY2025 (report 2026) | FY2027 (report 2028) |
Listed SMEs | FY2026 (report 2027) | Removed from scope |
Non-EU companies (>€450M EU turnover) Non-EU companies (>€450M EU turnover) | FY2028 (report 2029) | Unchanged |
What matters most for Vietnamese businesses is the value chain reporting requirement. EU businesses subject to CSRD must disclose information about their entire supply chain, creating indirect pressure on Vietnamese suppliers to provide data on Scope 3 emissions, labor practices and human rights due diligence (Carbonfact, 2024).
3.2. The US SEC rules
The US Securities and Exchange Commission (SEC) adopted its climate disclosure rules on 06/03/2024; however, the rules have never taken effect due to immediate legal challenges (Harvard Law School Forum, 2025).
The SEC voluntarily stayed the rules on 04/04/2024 pending judicial review in Iowa v. SEC. By March 2025, the SEC had voted to withdraw its defense of the rules. As of early 2026, the Eighth Circuit Court of Appeals has held the case in abeyance and the SEC has stated it has no intention of revisiting the rules (ESG Dive, 2025).
Practical status: Although technically still on the books, the SEC’s climate rules are unlikely to be enforced under the current leadership. However, alternative legal frameworks remain in effect, including California’s SB 253 Act, which requires reporting from August 2026 for large companies operating in California (White & Case, 2024).
3.3. The ISSB Standards (IFRS S1 and S2)
The International Sustainability Standards Board (ISSB) issued IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures) on 26/06/2023, effective for annual reporting periods beginning on or after 01/01/2024. Following IOSCO’s endorsement on 25/07/2023, adoption has progressed rapidly across major markets (IFRS Foundation, 2023). As of September 2025, 37 countries and territories, representing approximately 60% of global GDP and 40% of global market capitalization, have decided to use or are taking steps to adopt the ISSB standards (S&P Global, 2025).
ISSB adoption status in key markets:
| Country | Scope of application | Mandatory effective date |
|---|---|---|
| Singapore | Scope 1&2 mandatory for all listed companies; Scope 3 for STI | FY2025 / FY2026 |
| Hong Kong | Hang Seng LargeCap fully mandatory | FY2026 |
Japan | Companies with market cap ≥3 trillion JPY | FY ending 3/2027 |
| Malaysia | Companies with market cap ≥RM 2 billion | FY ending 31/12/2025 |
Taiwan | All listed companies | 2025 |
| Brazil | Listed companies (first country to legislate ISSB) | 01/01/2026 |
4. Impact on Vietnamese businesses
4.1. Pressure from international supply chains
The impact of international ESG legal frameworks on Vietnamese businesses operates mainly through supply chain mechanisms rather than direct legal obligations. A VCCI survey in October 2024 found that nearly 60% of Vietnamese businesses exporting to the EU had never heard of CSDDD, while fewer than half had knowledge of CSRD requirements (Vietnam Investment Review, 2024).
The EU’s CSDDD Directive (published on 05/07/2024, with member states required to transpose it by 26/07/2026) requires EU businesses to conduct human rights and environmental due diligence across their entire value chains. By 2029, companies with more than 1,000 employees and 450 million EUR in turnover must integrate due diligence into their policies, identify adverse impacts, and develop preventive action plans. These requirements will be passed down to Vietnamese suppliers through commercial contracts. Fines can reach up to 5% of global net turnover (SGS Vietnam, 2024).
4.2. Textiles and electronics hit hardest
The US Uyghur Forced Labor Prevention Act (UFLPA) has had a significant impact on Vietnamese exports. Between October 2023 and May 2024, 950 shipments from Vietnam were detained with a total value of USD 520 million, with Vietnam-based entities accounting for 36% of shipments linked to entities newly added to the UFLPA list (Lexology, 2024).
Vietnam’s textile and garment industry, with export turnover of approximately USD 44 billion in 2024 and the EU as its second-largest export market, is facing growing compliance pressure. EU buyers now require suppliers to provide data on carbon emissions, raw material origins and labor conditions (Vietnam Briefing, 2024).
4.3. Requirements from the banking sector
ESG requirements from Vietnam’s banking sector are becoming increasingly important. Circular 17/2022/TT-NHNN requires credit institutions to integrate ESG factors into their credit appraisal processes. An ESG Report can therefore help businesses organize and provide relevant sustainability information when required.
Green credit outstanding reached VND 742.8 trillion (USD 28.17 billion) by Q3/2024. This represented around 4.3-4.4% of total outstanding loans. The targets were 10% by 2025 and 25% by 2030 (VietnamPlus, 2024).
Decision 1408/QD-NHNN requires all domestic lending institutions to have internal regulations on environmental risk management by the end of 2025 (Green Central Banking, 2024).
4.4. Vietnam’s carbon market
The development of Vietnam’s carbon market is progressing rapidly under Decision 232/QD-TTg (January 2025). The ETS pilot will be launched from August 2025 with power plants as the first participants, before expanding to steel/iron and cement production facilities. The target is full operation by 2029, with 2,166 facilities required to conduct mandatory greenhouse gas inventories under Decision 13/2024/QD-TTg (B-Company, 2024).
5. Summary: Which businesses are required to prepare ESG reports?
Based on a comprehensive analysis of domestic and international regulations, we summarize the groups of businesses subject to mandatory ESG reporting obligations as follows:
| Business group | Legal basis | Deadline |
|---|---|---|
Vietnamese public and listed companies | Circular 96/2020/TT-BTC | Annually (31/3) |
Businesses exporting to the EU (supply chain) | CSRD, CSDDD (indirect) | 2026-2029 |
Large emitting facilities (2,166 businesses) | Decision 13/2024/QD-TTg | From 3/2025 |
Businesses borrowing green capital | Circular 17/2022/TT-NHNN | Per bank requirements |
6. Conclusion and Recommendations
The global ESG legal landscape is entering a period of expansion and convergence. The EU narrowed the scope of CSRD in December 2025. The US SEC rules also remain stayed due to litigation. However, mandatory climate and sustainability disclosure continues to develop across many markets. ISSB standards are also emerging as an important global baseline. Several Asian markets are implementing these requirements on relatively rapid timelines.
For Vietnamese businesses, compliance pressure mainly comes through international supply chain requirements. Businesses should therefore proactively prepare an ESG Report and establish the necessary data systems. One important step is Scope 1 and 2 emissions measurement. Businesses should also document labor practices and human rights due diligence. Relevant certifications, including GOTS, OEKO-TEX and GlobalG.A.P., should also be considered. These measures can help businesses maintain access to the EU and US markets.
Vietnam’s carbon market and mandatory greenhouse gas inventory requirements are accelerating the country’s ESG transition. ESG is therefore moving from voluntary participation toward more specific regulatory requirements. Businesses that prepare early can turn compliance requirements into opportunities to strengthen their competitiveness. This will become increasingly important as international ESG frameworks continue to evolve.
A message from the ESG Expert Team – Carbon Credit Viet Nam Joint Stock Company
Over many years of accompanying businesses on their ESG journey, we have found that proactivity always creates a competitive advantage. Businesses that start building ESG data systems early not only avoid compliance risks but also unlock access to green capital, secure their export orders, and build a sustainable brand image.
We understand that reading and interpreting complex legal regulations from multiple legal systems is no small challenge. That is why this article was compiled with the goal of “simplifying complexity” – giving your business the clearest possible overview of its obligations amid a rapidly changing ESG legal landscape.
If your business needs support with ESG status assessments, building data collection systems, preparing international-standard sustainability reports, or conducting greenhouse gas inventories under the GHG Protocol, our team of experts is always ready to accompany you.
Respectfully,
ESG Expert Team – Carbon Credit Viet Nam Joint Stock Company
Reference List
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Disclaimer:
This article has been compiled for the purpose of providing general guidance and information and does not constitute legal or professional advice. Legal regulations may be updated. Businesses should consult experts before implementation.
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