Newly developed industrial parks (IPs) are designed following the models of eco-industrial parks, circular parks, and smart parks… with the goal of aligning with ESG standards. So, what is the appropriate path for IPs that have been in operation for decades and whose infrastructure is nearly fully depreciated?
The ESG Trend Industrial Parks Around the World Are Moving Toward
Eco-industrial park models in many developed countries-such as green IPs in Singapore, smart industrial parks in South Korea and Japan - are all actively working to reduce emissions, conserve energy, optimize management, and foster high-quality labor communities. These are the ESG models that industrial parks globally are aiming for.
According to the United States Agency for International Development (USAID), ESG is a set of standards used to measure factors related to sustainable development and the impact of enterprises on three main aspects: Environmental, Social, and Governance. Specifically, in the Environmental (E) aspect: it involves controlling emissions and waste, managing energy and clean water use, materials, and biodiversity. In the Social (S) aspect: it ensures working conditions, occupational health, equality and workers' rights, as well as the level of impact on the local community. In terms of Governance (G): it emphasizes ethical standards, transparency, effective management, investor protection, and stakeholder engagement.
ESG is no longer just an option-it has become a necessary standard for sustainable development. It is a comprehensive framework for assessing sustainability and social responsibility of the organizations/enterprises that are IP investors. The benefits of ESG go beyond minimizing environmental risks, opening access to green capital sources, attracting international investment, enhancing labor productivity, and boosting competitiveness.
International organizations such as IFC, GRI, and SASB have issued detailed ESG standards to guide enterprises and industrial parks in implementing ESG in a systematic way.
Challenges for Long-Established Industrial Parks in Vietnam When Moving Toward ESG
Most of the industrial parks that were developed long ago in Vietnam face difficulties in meeting ESG criteria. The main reasons include aging infrastructure that has now fully depreciated; lack of integrated environmental monitoring mechanisms; limited social services; and inconsistent awareness of ESG across the business community.
While new industrial parks can be designed from the outset as eco or smart models, long-established IPs must grapple with the challenge of “operating while renovating and transitioning—requiring a strategic investment plan divided into phases and aligned with budget capabilities. Export-import enterprises need green certifications to access and maintain international markets, especially demanding ones such as the EU, the US, and Japan.
ESG-oriented industrial parks in Vietnam are still in their early stages of development, facing great potential but also significant challenges. First, there is pressure from businesses already operating within the parks in terms of management capacity and high environmental exposure in industries such as heavy metals, textiles and dyeing, paper production, mining, oil and gas, electricity utilities, and food production. Second, 80% of businesses in Vietnam have committed or intend to commit to ESG goals in the next 2–4 years, with foreign enterprises showing very strong commitments. These realities are pushing IPs to urgently transition in order to meet customer demands and address the broader market challenge.
Currently, several IPs in Vietnam managed and operated by IMC have found solutions to the problem of transitioning old industrial parks into eco-industrial or smart parks.
Accordingly, the IP management and operation units have implemented renovation measures in alignment with ESG, including: road systems, lighting systems, greenery systems, stormwater drainage systems, wastewater drainage systems, etc. It should be noted that IMC has practical experience in managing and operating more than 10 IP projects, with the oldest project having been in operation for nearly 30 years. IMC has calculated the replacement and renovation of these systems with the aim of saving energy, reducing emissions, optimizing maintenance costs, and meeting environmental requirements. For example, the lighting system in the IP has been fully converted to LED lights, contributing to energy savings and emissions reduction; the old concrete wastewater pipes have been replaced with HDPE pipes, alongside the new investment in wastewater treatment plants to meet environmental standards.
By doing so, ESG elements have been integrated directly into the infrastructure. The difficulty has shifted toward balancing the renovation and repair budget for IP infrastructure with the revenue from operation management services (specifically, finding appropriate solutions to upgrade various components to meet ESG trends instead of pursuing full eco- or smart-park models as done in the developed countries mentioned earlier).
In reality, meeting ESG standards requires an investment of about 15% of total annual revenue into infrastructure. Although this is a significant investment, it will, in the long run, help increase operational efficiency, extend infrastructure lifespan, and attract potential investors thanks to a sustainable development image. For large-scale industrial parks, the investment does not need to be made all at once—IMC has solutions to divide it into phases according to a clear roadmap.
Successfully solving the transition challenge will help Vietnam's industrial parks attract higher-quality investment, increase international competitiveness, and contribute to sustainable development. These realities show that operating industrial parks aligned with ESG standards comes with many challenges and cannot be achieved “overnight. It requires prioritization, a well-planned investment strategy, and long-term phased implementation.