The 2024 Vietnam Impact Investment Forum offered a roadmap for accelerating progress on social and environmental fronts. By introducing the Orange Index, Vietnam has set a precedent for inclusive development while acknowledging areas that require urgent attention.
HÀ NỘI — A groundbreaking tool to assess Vietnam’s strides towards sustainable and inclusive development was unveiled on Thursday during the 2024 Vietnam Impact Investment Forum in Hà Nội. Hosted by the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with Global Affairs Canada (GAC), the forum gathered over a hundred influential stakeholders from Vietnam’s regional and domestic impact investment ecosystem. The event aimed to discuss and advance sustainable growth initiatives and strategies.
RELEVANT SUSTAINABLE GOALS
What is the Orange Index?
The highlight of the forum was the introduction of the Orange Index, a new metric developed by the Singapore-based Impact Investment Exchange (IIX). The index aims to provide a comprehensive assessment of a country’s development by focusing on three critical pillars: community impact, gender equality, and environmental sustainability.
With a scoring range from 1 to 100, where 100 represents the highest level of achievement, the Orange Index leverages data collected by IIX from hundreds of sustainable micro, small, and medium enterprises (MSMEs). The tool’s ultimate goal is to drive more impactful investments while keeping track of Vietnam’s progress on key social and environmental issues.
Vietnam’s Performance: Surpassing the Global Average
In its inaugural report for 2023-2024, Vietnam achieved an Orange Index score of 50, surpassing the global average of 41 and placing the nation among the leaders in the ASEAN region. Notably, the country made significant strides in gender equality, earning a score of 49. This impressive achievement reflects targeted efforts in empowering women and gender minorities, outpacing many of its regional counterparts.
However, the report highlighted challenges in environmental sustainability, where Vietnam received a score of 43, signaling a pressing need for targeted interventions in waste management, water conservation, and soil health.
“Vietnam’s social impact businesses are playing a crucial role in advancing both social and environmental goals,” said Lương Minh Huân, Director of VCCI’s Enterprise Development Foundation. “While we celebrate the progress reflected in the Orange Index, the lower score in the environmental pillar emphasizes the need for continuous investment and policy reform to enhance sustainability and long-term resilience.”
A report by the United Nations Development Program (UNDP) and the Ministry of Planning and Investment reveals that Vietnam is home to around 22,000 social impact enterprises. Notably, 89% of these businesses fall into the micro or small-sized category, and 72% generate annual revenues of less than VND 5 billion ($196,600).
A Call for Action: The Orange Movement
The Orange Index Report is the result of four years of tracking and analyzing Vietnam’s evolving impact investment ecosystem. According to the United Nations Development Programme, impact investing involves channeling funds into projects that generate a positive social or environmental impact, alongside financial returns. It aims to harness the private sector’s power to advance a nation’s sustainable development goals.
During the forum, discussions centered around gender-focused impact investing, gender lens investing, and the unique challenges women-led businesses face in Vietnam. While MSMEs make up 97 percent of Vietnam’s enterprises, only 22 percent are led by women, many of whom face barriers such as limited financial literacy and access to capital.
IIX CEO and founder Durreen Shahnaz expressed her optimism about the initiative, saying, “We are excited to introduce the Orange Index in Vietnam, an economy on the cusp of leading ASEAN’s next wave of sustainable, inclusive growth. We are committed to advancing the Orange Movement, unlocking the full potential of Vietnam’s dynamic social impact ecosystem. This initiative goes beyond investment; it reflects our unwavering dedication to a future where gender equality and sustainability drive meaningful progress for all.
The Orange Movement aligns with the fifth United Nations Sustainable Development Goal (SDG) of achieving gender equality. It aims to mobilize USD 10 billion by 2030 to empower 100 million women, girls, and gender minorities. The movement is set to amplify the impact of Vietnam’s social and environmental initiatives by fostering greater collaboration and investment in equitable and sustainable growth.
Lead image courtesy of Quyển Phạm Xuân from Pexels
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