Abstract: The article analyzes the shift of Corporate Social Responsibility (CSR) from a voluntary commitment to a legal requirement, aiming to balance economic interests with social and environmental responsibilities. This trend is reflected in the codification of CSR in many countries. In the European Union, CSR is regulated through Directive 2014/95/EU on non-financial disclosure. In the United States, CSR is integrated into laws such as the Sarbanes-Oxley Act (2002) and the Dodd-Frank Act (2010) to enhance financial transparency. Japan, South Korea, China, and India adopt a hybrid model combining legal regulations and incentive policies, notably the mandatory provisions in India’s Companies Act of 2013. Based on a study of international experiences, the article proposes improving Vietnam’s CSR regulations by codifying them into the national legal system, enhancing supervisory mechanisms, implementing incentive policies, and raising corporate awareness. These adjustments aim to promote sustainable development and strengthen Vietnam’s competitiveness in the context of global economic integration.
Keywords: Corporate Social Responsibility, CSR Legal Framework, International Experience, Recommendations for Vietnam
Introduction
In the context of globalization and international economic integration, Corporate Social Responsibility (CSR) is no longer confined to an ethical commitment but has become an important element of the legal systems of many countries. The trend of shifting CSR from a voluntary initiative to a normative requirement reflects an inevitable need to ensure corporate transparency, accountability, and the harmonization of economic interests with the demands of sustainable development[1]. This demonstrates the evolution of law in regulating the activities of economic actors to protect broader social interests while maintaining the long-term stability of the socio-economic system.
The diversity in approaches to the legalization of CSR across countries reflects the particular characteristics of each nation’s legal system, economic context, and policy orientation. In the European Union (EU), the legal framework on CSR focuses on mandatory disclosure of non-financial information and environmental responsibilities, exemplified by Directive 2014/95/EU of the European Parliament and the Council of the European Union[2]. In the United States, CSR is integrated into statutes such as the Sarbanes-Oxley Act (2002) and the Dodd-Frank Act (2010), aiming to enhance transparency in financial activities and corporate social accountability[3]. Meanwhile, Asian countries such as Japan, South Korea, and China adopt a hybrid model combining legal norms with incentive-based policies, under which enterprises are guided to comply with CSR standards through financial incentives and supporting policies[4]. In India, CSR has even become a legal obligation, as the Companies Act 2013 requires enterprises meeting certain revenue and profit thresholds to allocate at least 2% of their after-tax profits to social activities[5].
In Vietnam, CSR is addressed in various legal fields, including corporate law, labor law, environmental protection law, and related regulations. At present, international trade commitments—especially new-generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union–Vietnam Free Trade Agreement (EVFTA)—impose increasingly stringent CSR requirements. These agreements compel Vietnamese enterprises to comply with stricter international standards on labor, environment, and transparent governance. This creates an urgent need to improve the legal framework on CSR in order to establish a clear legal environment, enhance national competitiveness, promote sustainable development, and ensure a balance between economic, social, and environmental interests.
The incorporation of CSR provisions into the legal system raises the question of whether this process can be considered “legalization,” given that CSR has traditionally been understood as voluntary commitments exceeding minimum legal requirements. In this article, the concept of “legalization” of CSR is understood as the process of integrating some or all CSR principles into the national legal system through binding regulations or incentive policies that encourage corporate compliance. The legalization of CSR does not eliminate its inherent voluntary nature but seeks to establish a clear legal framework, create enforcement mechanisms, and promote more transparent and effective corporate social responsibility practices. Approaches to legalization may differ depending on each country’s legal system and socio-economic conditions. Based on a study of CSR legal models in selected jurisdictions, this article analyzes the global trend toward CSR legalization and proposes directions for improving Vietnam’s CSR legal framework to enhance the effectiveness and feasibility of this process.
1. Foundations of the Legalization of Corporate Social Responsibility
CSR has become an inevitable trend in modern business, reflecting the balance between economic interests and responsibilities toward society and the environment. Accordingly, CSR is not merely a business strategy but is gradually becoming a legal obligation in many countries. The construction of CSR rests on three main foundations: (i) the doctrine of corporate social obligation, (ii) stakeholder theory, and (iii) the principle of sustainable development. Each of these pillars not only shapes how enterprises fulfill social responsibilities but also provides a basis for legal regulation aimed at enhancing transparency, accountability, and sustainable governance in business activities.
The doctrine of corporate social obligation emphasizes that enterprises should not operate solely to maximize profits but must also bear responsibility for society and the environment[6]. This view contrasts with Milton Friedman’s argument that the sole responsibility of business is to generate profit for shareholders within the boundaries of the law[7]. However, subsequent studies have pointed out that enterprises must play an active role in protecting workers’ rights, safeguarding the environment, and fostering community development[8]. The expansion of corporate responsibilities has driven the development and refinement of legal regulations on CSR in many legal systems worldwide, such as the European Union’s Directive 2014/95/EU, which requires large enterprises to publicly disclose non-financial reports concerning social and environmental responsibilities[9].
The Stakeholder Theory, developed by Edward Freeman, transformed the understanding of CSR. According to this theory, enterprises cannot operate in isolation and must consider the impact of their activities on stakeholders such as shareholders, employees, customers, communities, and governments[10]. This shift in corporate governance thinking toward valuing the interests of multiple groups has led countries to progressively legalize CSR to ensure fairness and sustainability in business operations. For example, in the European Union, Directive 2014/95/EU requires large enterprises to disclose Environmental, Social, and Governance (ESG) reports to increase transparency regarding environmental and social impacts[11].
The principle of sustainable development, established in the United Nations’ Brundtland Report (1987), laid the foundation for the regulation of CSR in many national legal systems[12]. This principle calls on enterprises to harmonize three main pillars—economic growth, environmental protection, and social responsibility—to ensure sustainable development for present and future generations. The evolution of key international legal instruments such as the Rio Declaration on Environment and Development (1992), the OECD Guidelines for Multinational Enterprises (2011), and the United Nations Sustainable Development Goals (SDGs) of 2015 has contributed to transforming CSR from a voluntary obligation into an integral part of binding legal systems in many countries[13].
The trend toward CSR legalization has become increasingly widespread worldwide. India pioneered this movement by making CSR a mandatory legal obligation under the Companies Act 2013, which requires companies exceeding certain profit thresholds to allocate at least 2% of after-tax profits to social activities[14]. The European Union has also promulgated Directive 2014/95/EU, mandating that large enterprises disclose CSR reports to strengthen accountability[15]. At the same time, the EU’s Directive 2014/95/EU explicitly requires large enterprises to publish CSR reports to enhance accountability and transparency in business operations.
2. The Legal Framework on Corporate Social Responsibility Worldwide
2.1. International Standards
CSR has increasingly become an inevitable trend in global corporate governance, shaped by international standards of broad influence. These standards not only help enterprises establish codes of conduct and ensure transparent reporting but also provide a basis for national legal systems to codify regulations on human rights, labor standards, and environmental protection[16]. International standards may take a “voluntary” form as practice guidelines or a “mandatory” form when incorporated into national legislation.
One of the most important reference frameworks is the OECD Guidelines for Multinational Enterprises, which emphasize the obligation of businesses to respect human rights and comply with labor, safety, and environmental standards[17]. These Guidelines recommend that enterprises not only avoid causing negative impacts but also proactively contribute to sustainable development by creating jobs, supporting responsible business practices, and enhancing transparency. This is among the most widely influential sets of rules for global CSR policies, serving as a foundation for many countries in establishing their legal frameworks on corporate responsibility[18].
In addition, the United Nations Global Compact (UNGC), launched in 2000, is a highly influential initiative promoting CSR. The Compact sets forth ten core principles relating to human rights, labor, the environment, and anti-corruption, encouraging enterprises to operate sustainably[19]. Although it is not legally binding and is generally classified as “soft law,” the UNGC has created an important platform for businesses and non-governmental organizations to exchange and share experiences in implementing CSR. Notably, since 2015 the Compact has been adjusted to align with the United Nations Sustainable Development Goals (SDGs), guiding enterprises toward 17 goals such as poverty reduction, environmental protection, and social equity[20].
Another key standard in the labor field is the International Labour Organization (ILO) Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. First adopted in 1977 and updated in 2017, this declaration provides guidance for enterprises on employment, working conditions, training, social security, and occupational safety[21]. It calls on enterprises of all sizes and origins to contribute positively to the economy and society by ensuring sustainable employment, eliminating forced and child labor, and protecting workers’ rights. Many countries have used this declaration as a basis for enacting legal regulations on social responsibility in labor relations, such as the United States’ Fair Labor Standards Act and European Union regulations on worker protection[22]. Other important legal instruments shaping global CSR rules include ISO 26000 on Social Responsibility, the United Nations Guiding Principles on Business and Human Rights (UNGPs), and the Equator Principles (EPs)[23]. ISO 26000 provides comprehensive guidance on how enterprises can integrate social responsibility into their operations. The Equator Principles, a voluntary standard applied in the financial sector, require financial institutions to assess environmental and social risks before financing major investment projects[24].
These standards not only help build an international legal framework but also provide a foundation for many countries to codify CSR requirements. This trend is evident in the enactment of laws mandating CSR reporting, such as the European Union’s Directive 2014/95/EU and India’s Companies Act 2013[25]. International standards thus play an increasingly important role in encouraging enterprises not only to comply with the law but also to enhance their responsibility toward the community and the environment.
2.2. CSR Legislation in Selected European Countries
In Europe, CSR has evolved from a voluntary model to a mandatory mechanism, with increasingly strict legal provisions to ensure that enterprises fulfill their social and environmental responsibilities. The European Union (EU) not only possesses more than 300 directives and regulations on the environment but also laid the foundation for CSR through the Green Paper issued by the European Commission in 2001. Although the Green Paper declared CSR a voluntary tool, it emphasized the necessity for enterprises to comply with standards on human rights, labor, and environmental protection. The Green Paper played a key role in the codification of CSR by integrating many international initiatives—such as the UN Global Compact, the ILO Declaration on Multinational Enterprises, and the OECD Guidelines—into the EU’s legal and policy framework[26].
Since 2011, the EU has shifted from voluntary CSR toward mandatory obligations and strengthened the supervisory role of public authorities. One of the most important instruments is Directive 2014/95/EU on Non-Financial Reporting (NFRD), which requires large companies to disclose information on environmental impacts, social responsibility, human rights, and anti-corruption measures in their annual reports. However, due to limitations in its scope, this directive has been replaced by the Corporate Sustainability Reporting Directive (CSRD) of 2022, which expands the range of applicable entities and enhances transparency in CSR reporting. CSRD requires all companies listed on EU stock exchanges, as well as non-EU companies with revenue exceeding EUR 150 million within the EU, to publish sustainability reports in accordance with the European Sustainability Reporting Standards (ESRS)[27]. The EU has also introduced the Eco-Management and Audit Scheme (EMAS), an environmental management standard higher than ISO 14001, which obliges enterprises to regularly assess environmental impacts and ensure employee participation in environmental monitoring[28]. These measures form part of the EU’s Green Finance strategy toward achieving carbon neutrality by 2050.
At the national level, France is one of the pioneers in legislating CSR. The Nouvelles Régulations Économiques (NRE) Law of 2001 required listed companies to disclose their environmental and social impacts. However, this regulation primarily mandated disclosure without specifying mandatory content or concrete enforcement mechanisms. The lack of effective monitoring initially limited compliance. This highlighted the need to clearly identify responsible supervisory entities—whether government agencies, independent organizations, or civil society—and to clarify the scope of monitoring, whether limited to disclosure or extending to comprehensive supervision of CSR performance. Clarifying these aspects helps improve the effectiveness of law enforcement and strengthen corporate accountability. To address these issues, France enacted the Loi de Vigilance (Duty of Vigilance Law) in 2017, obliging large companies to oversee their entire supply chains to prevent human rights violations, forced labor, and negative environmental impacts[29]. Some critics argue that requiring large companies to monitor their supply chains may lead to the “transfer of responsibility” to smaller suppliers without truly resolving the root causes of CSR issues. Compliance can place enterprises in a difficult position as they attempt to control thousands of suppliers and partners without guaranteeing transparency or the effectiveness of the entire monitoring process. In practice, many companies have reported that complying with these regulations results in high management and inspection costs, which sometimes yield limited social and environmental benefits. While the Duty of Vigilance Law is considered a positive step in preventing violations, concerns remain regarding the feasibility of its enforcement and oversight. Because companies must self-monitor and report violations, there is a risk of inadequate transparency, as enterprises may disclose only favorable information while omitting sensitive or challenging issues.
Germany has adopted a similar approach through the Supply Chain Due Diligence Act (SCDDA) of 2021, which requires enterprises to monitor their entire supply chains to ensure compliance with labor rights and environmental standards. The law applies to all companies with more than 3,000 employees (from 2023) and more than 1,000 employees (from 2024), with penalties of up to 2% of global turnover for violations[30].
In the Nordic countries, CSR policies tend to be progressive and sustainable. Sweden established the Global Responsibility Partnership in 2002 to encourage enterprises to comply with the OECD Guidelines and the UN Global Compact. Denmark, meanwhile, enacted the CSR Act in 2008, requiring all state-owned and publicly listed companies to disclose CSR reports in their annual financial statements[31].
Despite the positive objectives of the SCDDA, its implementation faces several challenges. One of the biggest issues is the ability of companies to effectively monitor and inspect their supply chains. For multinational companies with complex supply networks spanning multiple countries, verifying compliance with labor and environmental standards can be extremely difficult. Furthermore, although strict penalties may motivate compliance, many experts worry that such regulations may result in companies conducting only superficial checks rather than genuinely improving working conditions or environmental impacts. This could lead to “greenwashing” or “social washing,” where companies focus on demonstrating compliance instead of achieving real improvements.
2.3. CSR Legislation in Selected Asian Countries
Asian countries have adopted diverse approaches to CSR, influenced by their levels of economic development, global integration, and unique business models. Early studies by Western scholars observed that, compared with developed nations, Asian countries show uneven attention to CSR and a lack of consistency in their approaches[32]. This view stems from significant differences in development stages, the degree of globalization, and corporate governance models across the region. However, in practice, many Asian economies are increasingly embracing CSR through varied legal models, including mandatory mechanisms and incentive-based policies.
In Japan, CSR is closely linked to corporate strategy and sustainable governance. Japan adopts a strategic approach to CSR that combines legal regulations with business practices. The Corporate Disclosure Act requires listed companies to disclose environmental, social, and governance (ESG) information in their financial reports[33]. In addition, the Japanese Industrial Standards (JIS) have issued CSR guidelines aligned with ISO 26000, emphasizing business ethics, transparency, and accountability. The Japanese government has also enacted the Sustainable Investment Promotion Act, which obliges companies to disclose ESG policies in their annual reports and to apply green finance standards to reduce environmental impact[34]. Major conglomerates such as Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Financial Group have adopted comprehensive CSR strategies focusing on green finance, support for small businesses, and improvement of labor conditions.
Some critics argue that although large corporations have developed clear CSR strategies, a significant gap remains between policy and practice. In some cases, major enterprises focus primarily on using CSR strategies to enhance their public image rather than making substantive changes to their operations for sustainability. While green finance policies and small-business support programs are positive steps, they are sometimes criticized as impractical and beyond the reach of small and medium-sized enterprises (SMEs). Moreover, the requirement to disclose ESG information in financial reports can be burdensome for smaller companies lacking sufficient resources, resulting in uneven implementation between large and small businesses. Critics caution that, while these regulations may improve transparency, they can impose heavy financial and human-resource burdens on firms with limited capacity to fulfill such obligations.
In China, CSR regulations are tightening, particularly in the state-owned enterprise (SOE) sector, to ensure corporate compliance with social and environmental standards. The Company Law Amendment 2018 mandates that companies fulfill their social responsibilities in business operations[35]. The State-owned Assets Supervision and Administration Commission (SASAC) has also issued CSR guidelines for SOEs, requiring them to contribute to sustainable development through labor and environmental policies.
China Tightens CSR in the State-Owned Enterprise Sector.
China has increasingly strengthened regulations on CSR to ensure that enterprises comply with social and environmental standards. The Company Law Amendment 2018 requires companies to fulfill their social responsibilities in business operations[35]. The State-owned Assets Supervision and Administration Commission (SASAC) has also issued CSR guidelines for state-owned enterprises (SOEs), mandating that these companies contribute to sustainable development through labor and environmental policies.
Furthermore, the Environmental Protection Law 2015 obliges companies to disclose information on greenhouse gas emissions and imposes legal liability for violations of environmental protection rules[36]. This represents a significant step toward reducing negative environmental impacts. However, monitoring and enforcement remain challenging. Many enterprises, particularly small and medium-sized ones, lack the capacity to implement proper environmental safeguards or to provide transparent reports. To address these issues, China is developing Green Finance Standards, requiring banks and credit institutions to fund only environmentally friendly projects. Although these standards have great potential to promote sustainable development, enforcement faces difficulties due to inconsistent definitions of what qualifies as a “green” project, creating ambiguity and complicating project classification.
In South Korea, CSR focuses on labor rights protection and sustainable development. The Sustainable Development Act 2007 requires enterprises to contribute to socio-economic development and to comply with labor and environmental standards[37]. In 2019, the government enacted the Corporate Social Responsibility Disclosure Act, mandating listed companies to report in detail their social and environmental impacts. Additionally, the Labor Rights Act sets labor protection standards, prohibits exploitation, and requires companies to ensure safe and fair working conditions[38]. Despite these strict regulations, some studies indicate that enforcement of labor standards remains imperfect, particularly among SMEs that struggle to meet requirements for employee rights and safe working conditions due to limited resources and insufficient understanding of legal obligations.
In India, CSR has become a mandatory legal obligation. Before CSR was made compulsory, the Indian government pursued a long-term plan to integrate CSR into corporate practice. The Ministry of Corporate Affairs issued voluntary CSR guidelines in 2009, encouraging companies to develop specific CSR strategies. In 2011, these guidelines were updated with more detailed principles emphasizing business ethics, transparency, and accountability[39]. India became the first country in the world to make CSR a legal duty. Section 135 of the Companies Act 2013 requires companies exceeding specified revenue or profit thresholds to allocate at least 2% of their after-tax profits to CSR activities[40]. However, the transition from voluntary to mandatory CSR raises questions about the effectiveness and feasibility of enforcement.
Although India’s mandatory CSR regime represents a major step forward, it also presents practical challenges. Large enterprises may implement CSR effectively, while smaller firms face difficulties due to limited resources. Moreover, weak monitoring and a lack of transparency in CSR fund allocation can lead to superficial CSR projects or initiatives with little long-term impact. The regulation may also create opportunities for corruption and collusion between businesses and government officials, undermining the original goal of promoting genuine CSR. To ensure that CSR truly benefits communities and is not misused, the Indian government needs to strengthen oversight mechanisms, improve transparency in CSR fund management, and enable participation by businesses of all sizes in social initiatives.
Vietnam is moving toward codifying CSR. Vietnam currently lacks a comprehensive legal instrument dedicated solely to CSR. The Law on Enterprises 2020 mentions CSR but does not specify detailed content, scope, or implementation mechanisms. CSR-related obligations are scattered across various statutes, including the Law on Environmental Protection 2020, the Labor Code 2019, and the Law on Protection of Consumer Rights 2010. In addition, several policies encourage voluntary CSR practices. The Ministry of Industry and Trade, for example, has established reward mechanisms for enterprises that excel in CSR and encourages annual CSR reporting[41]. In the context of economic integration and sustainable development, Vietnam is likely to continue improving its legal framework on CSR to align more closely with international standards.
Despite Vietnam’s progress in incorporating CSR into policies and legislation, the absence of a dedicated and comprehensive legal framework makes CSR implementation challenging. Enterprises mainly conduct CSR on a voluntary basis, lacking mandatory rules and robust monitoring mechanisms. This results in uneven CSR enforcement and allows some companies to engage in purely symbolic CSR activities without producing meaningful social or environmental impacts. To promote effective and sustainable CSR, Vietnam needs to develop a clear and coherent legal framework with strict monitoring mechanisms to ensure that businesses of all sizes take CSR obligations seriously and participate in socially responsible activities in a substantive and impactful manner.
3. The trend of codifying corporate social responsibility (CSR) regulations and issues for Vietnam
3.1. The trend of codifying corporate social responsibility regulations
Initially, CSR was voluntary, reflecting the ethical responsibility of enterprises toward the community and the environment. However, in recent decades, the rapid development of economic globalization and the influence of multinational enterprises (MNEs) have created a need for stricter regulations on CSR to protect the rights and interests of stakeholders. This has become particularly urgent after a series of environmental scandals, violations of labor standards, and the increasing demand for transparency in corporate governance[42].
The participation of enterprises, regardless of size, in socially responsible business activities has become an important principle in the sustainable economic development policies of many countries[43]. Under growing social pressure, many countries have shifted the CSR model from a voluntary approach to a mandatory one, transforming CSR into a legal obligation through state-enacted regulations. Some opinions express concerns that imposing CSR obligations may limit corporate creativity, increase compliance costs, and negatively affect profits[44]. However, numerous studies have shown that codifying CSR can achieve a dual objective: on the one hand, binding the private sector to support sustainable development programs, and on the other, enabling businesses to gain long-term benefits through social recognition, commercial advantages, and tax incentives[45].The process of codifying CSR is unfolding vigorously on a global scale, extending beyond developed economies to developing countries. This process can be carried out through two main approaches:
(i) incorporating international standards into national legal systems (such as the European Union Directive on non-financial reporting);
(ii) formulating domestic regulations tailored to the specific socio-economic conditions of each country.
The codification of CSR not only enhances corporate responsibility but also generates significant impacts on the economy. Legal provisions guide corporate activities toward greater transparency and accountability, thereby increasing the trust of investors, customers, and the community[46]. Requiring companies to disclose non-financial information improves corporate governance and contributes to sustainable development. Nevertheless, codifying CSR also poses challenges for small and medium-sized enterprises (SMEs). Requirements for ESG reporting, compliance with environmental regulations, or financial contributions can impose significant cost and resource pressures, affecting the competitiveness of SMEs compared with large corporations[47].
3.2. Observations and recommendations for Vietnam
In Vietnam, CSR has not yet been codified in a single dedicated law, but related obligations are scattered across various legal documents. The Law on Environmental Protection 2020 requires enterprises to take responsibility for environmental protection, apply clean technologies, comply with emission standards, and conduct environmental impact assessments. The Labor Code 2019 sets out employee rights, safe working conditions, social insurance, and the responsibility of enterprises to protect employee interests. The Law on Protection of Consumer Rights 2010 obliges enterprises to provide transparent product information, protect consumer rights, and ensure the quality of goods and services. Although these regulations cover some aspects of CSR, their fragmented approach leads to unsystematic and inconsistent implementation. The absence of a comprehensive legal framework also makes it difficult to monitor, assess compliance, and enforce CSR policies. Given the trend of international integration and pressure from new-generation free trade agreements such as the CPTPP and EVFTA, codifying CSR in Vietnam is necessary to enhance corporate competitiveness and ensure sustainable development. Key policy directions may include:
First, improving the legal framework on CSR
Improving the legal framework on CSR in Vietnam is essential in the context of deepening economic integration and the strong influence of international standards, particularly those relating to environment, society, and governance (ESG). However, when determining the method of implementing CSR regulations, careful consideration is required between enacting a standalone CSR law and integrating CSR provisions into existing laws. This caution stems from the nature of CSR, which is not merely a separate legal element but is connected to all areas and business practices of enterprises, and therefore must be incorporated flexibly and consistently into the current legal system. The rationale for caution in enacting a standalone CSR law can be observed in the practices of countries pioneering CSR codification. Nations such as India, France, the United States, China, and EU member states have not promulgated independent CSR laws but have instead incorporated CSR requirements into other legal instruments, such as labor law, corporate governance, securities, taxation, finance, and credit regulations. This approach maintains the coherence of the legal system and helps enterprises adapt without creating additional legal burdens. In practice, integrating CSR into other legal areas has proven to be an effective method of promoting corporate social responsibility without complicating the legal system or creating unnecessary administrative barriers.
Accordingly, for Vietnam, a more feasible and practical option is to integrate CSR regulations into existing laws, including the Law on Enterprises, the Law on Environmental Protection, the Labor Code, and other relevant legislation. This approach not only ensures the consistency and effectiveness of the regulations but also reduces compliance costs for businesses, particularly SMEs. Integrated provisions could include requirements for enterprises to publicly report CSR in accordance with international standards such as the OECD Guidelines for Multinational Enterprises, the UN Global Compact, ISO 26000, and other ESG standards, while obliging them to adhere to environmental protection and labor rights commitments based on international norms. A clear and consistent legal framework on CSR, especially by embedding CSR requirements into existing laws, would serve as an important tool to steer Vietnam toward a more sustainable, equitable, and responsible economy.
Second, strengthening monitoring mechanisms and enforcement measures
Enhancing monitoring mechanisms and enforcement measures is necessary to ensure the substantive implementation of CSR and to avoid situations where CSR remains superficial or merely voluntary. At present, Vietnam lacks an effective monitoring system and sufficiently strong sanctions to compel enterprises to comply with CSR obligations. Establishing an independent monitoring system with the participation of social organizations, business associations, and independent auditing bodies would ensure transparency and objectivity, helping to prevent perfunctory CSR reporting. CSR monitoring should be conducted periodically, requiring enterprises to publicly report according to international standards such as those of the OECD, UN Global Compact, ISO 26000, or ESG reporting standards. This not only standardizes monitoring methods but also ensures that enterprises fulfill their sustainable development commitments. To enhance deterrence, strong sanctions should be applied to CSR violations, such as administrative fines, suspension of operations, or exclusion from bidding on public projects. Some countries, such as France and Germany, have adopted CSR rating systems to encourage enterprises to proactively fulfill their social responsibilities, thereby enhancing their reputation and competitiveness. Implementing a CSR rating system in Vietnam would raise awareness within the business community and promote the substantive execution of CSR. Combining independent monitoring, strong sanctions, and a CSR rating system will create an effective enforcement mechanism that drives sustainable development and strengthens corporate accountability to the community and the environment.
Third, implementing incentive policies to encourage CSR
Introducing incentive policies for enterprises that fulfill CSR is a crucial solution to promote effective and sustainable social responsibility. One effective incentive is to grant tax exemptions or reductions for enterprises with strong CSR performance, particularly in environmental protection and labor rights. This policy has been successful in many countries, such as France, Germany, and Japan, where enterprises complying with CSR receive tax incentives or deductions for green initiatives. In addition to tax incentives, green credit is also an important measure. Banks can offer preferential credit packages to enterprises that comply with international CSR standards such as ESG, similar to models in Singapore and South Korea. This enables businesses to access funding more easily for sustainable projects. Vietnam should also strengthen international cooperation with organizations such as the UNDP, IFC, and ADB to support enterprises in training and financing CSR activities. These incentive policies not only motivate enterprises to fulfill CSR but also foster sustainable development and enhance the competitiveness of Vietnamese businesses in the context of global integration.
Fourth, raising awareness and capacity for CSR implementation
Enhancing awareness and capacity for CSR implementation is key to integrating CSR into the sustainable development strategies of enterprises. Although CSR is gaining increasing attention, many enterprises, particularly SMEs, still face difficulties in understanding its benefits and implementing it effectively. Therefore, specific measures are needed to raise awareness and improve CSR implementation capacity in the business community. First, specialized training programs on CSR should be organized to help enterprises clearly understand the economic, social, and environmental benefits of CSR and provide guidance on implementation suitable to each industry and enterprise size. These training programs can be jointly organized by government agencies, business associations, and international organizations such as the UNDP, IFC, and ADB to ensure quality and practical relevance. Some countries have successfully adopted this model, such as Japan, which has implemented CSR training programs for SMEs, and the EU, which requires large companies to establish dedicated CSR departments. In addition to training, sector-specific codes of business ethics should be developed to guide enterprises in complying with ethical standards, thereby enhancing brand reputation and creating a transparent, healthy business environment. These codes can be based on international standards such as the OECD Guidelines, UN Global Compact, ISO 26000, or Vietnamese industry standards, such as the Equator Principles in banking or ISO 14001 in manufacturing to reduce environmental impact. A combination of training, ethical codes, and communication will help raise awareness and strengthen CSR implementation capacity within the business community, laying a solid foundation for the development of CSR in Vietnam in the future.
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* Assoc. Prof. Dr. Banh Quoc Tuan, Head of the Graduate Training Management Department, Thu Dau Mot University.
Approved for publication on May 16, 2025.
Email: quoctuan178@yahoo.com
**Master’s degree Nguyen Hoang Anh, Faculty of Fundamental Sciences, Dong Nai University of Technology.
[1] Porter, M. E., & Kramer, M. R., Creating shared value, Harvard Business Review, 89(1/2), 62-77 (2011)
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