ESG Tentacles Could Strangle Growth in ASEAN Countries

By Vijay Jayaraj

It is well known that green enthusiasts in government and big business are seeking to divert financing away from the use of fossil fuels in the U.S. and other developed countries. However, the draconian pressures of this movement are now being applied in Vietnam and other members of the Association of Southeast Asian Nations (ASEAN) whose economies can ill afford impediments to growth.

The U.S. Agency for International Development (USAID) is working with partner banks abroad to implement policies of ESG (environmental, social and governance), an investment rating system that requires the incorporation of political ideologies into government spending and the operations of businesses, including banks.

Both amorphous and wide ranging, ESG criteria can include subjects such as employment quotas based on race and ethnicity and an organization’s commitment to the climate industrial complex’s fantasy of a global economy free of carbon dioxide emissions. The ESG insistence on advancing technologies such as wind and solar energy over the use of coal, oil and natural gas is perhaps the most direct threat to alleviating poverty in poorer nations.

Under ESG, businesses that do not comply with approved criteria are punished financially, undermining capitalism and centralizing power to a few “experts.” Neither scientifically valid nor helpful to the people it purportedly seeks to benefit, ESG could usher in an era of darkness for economic systems that would otherwise thrive on intensive energy use and free markets.

Vietnam, for example, is a country that has undergone significant economic progress in recent decades. However, despite this progress, poverty remains a significant issue. According to the World Bank, around nine percent of the population lived below the poverty line in 2019.  

One of the main drivers of economic growth in Vietnam has been the country’s rapidly expanding export sector comprising textiles, footwear and other manufactured goods. In 2021, Vietnam industry contributed 2.68 thousand trillion Vietnamese Dong ($113 million) to the gross domestic product (GDP) – the largest contribution among all sectors, according to Statista.

In order to continue economic growth and reduce poverty, Vietnam must depend on its carbon-intensive industries. A stable energy supply decides the rate at which the country’s people prosper. Only fossil fuels – supported by nuclear and hydro – can provide industrial-scale energy that is affordable, reliable and abundant.

Vietnam National Coal and Mineral Industries Group says there will be a six percent growth in the National coal demand between 2022 and 2025. Four main industries – cement, fertilizers, metal and power generation – are expected to retain over 90 percent of the combined share of domestic consumption.

Though the reasons for Vietnam’s reliance on hydrocarbons are obvious and understandable, the country’s use of them is now under threat.

“USAID Green Invest Asia has entered into agreements with four of Vietnam’s largest banks to provide bespoke technical assistance to improve ESG systems, including developing relevant policies, defining lending criteria, and building environmental and social risk management/reporting capacity,” the agency reports in language only a bureaucracy can create.

The deputy director of USAID with Vietnam says, “Financing the planet’s transition to net zero is creating a growing investment opportunity for banks worldwide and Vietnam is no exception…I applaud the government of Vietnam for going beyond recommending green growth or green credit to taking action on it.”

In other words, USAID wants Vietnam to achieve net zero, the irrational and destructive concept of living without fossil fuels. Vietnam’s top banks are likely to use ESG rating for lending. This will likely reduce the growth of an economy that was traditionally reliant on coal, oil, and gas – the only affordable and reliable energy sources readily available to it.

The current U.S. administration has been dedicated to this disruption of developing economies from its inception, announcing from the beginning that U.S. foreign aid for fossil fuel projects would be terminated.

Lawmakers in the U.S. must address this issue before the tentacles of ESG strangle Third World development.

This commentary was first published at BizPac Review, March 30, 2023, and can be accessed here.

Vijay Jayaraj is a Research Associate at the CO2 Coalition, Arlington, Virginia. He holds a master’s degree in environmental sciences from the University of East Anglia, UK and resides in India.

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Stephen Wilde
April 10, 2023 12:08 am

Those policies will turn developing nations away from the West and towards the BRICS nations who will then streak ahead whilst the West declines.

PA Dutchman
Reply to  Stephen Wilde
April 10, 2023 5:24 am

Just another piece of the plan.

Peta of Newark
April 10, 2023 1:07 am

When it comes to Climate ##, being strangled is looking like the just one of myriad mortal hazards:
## ‘climate’ effectively being = A Religion

Headline:Surge in Hindu vigilante mobs who ‘attack and kill’ beef-eating Muslims

On slightly similar lines: Lurpak is locked up in security nets
The Daily Fail

Thanks Boris

April 10, 2023 1:18 am

One good thing about ESG, is it has people talking about the contents of the contracts governments sign with the Banksters. For decades we have been labouring under the so-called “Good Governance” contracts. Good governance prohibits spending on social projects, demands spending on guns and guards for the wealthy, and forces the ‘client state’ to sign over mineral rights as collateral. Not minerals, but the actual rights of exploitation, from which said client state receives but a token pittance, never enough to offset the cost of the usurious loan.
ESG is just another form of this blackmail, hitherto disguised as High Finance and Development Aid.
Funny how the financial experts never discuss this in public… but ESG is forcing it into the open, viva ESG!

Mike McMillan
Reply to  cilo
April 10, 2023 3:11 am


April 10, 2023 3:07 am

‘a growing investment opportunity for banks worldwide’. How well did that turn out for Enron? Has anything really changed? Margaret Thatcher had the answer, based on running out of other people’s money.

I’ve got important news for today’s banks: they are about to run out of other people’s money – again.

Trouble is, every so often there is a completely new generation of bankers who know nothing at all of the lessons learned by previous generations. The same black hole grows in full view in front of them, they have the same inability to see it, and then they fall into it just like the previous generations. Unfortunately, they take down a lot of innocent people with them.

It doesnot add up
Reply to  Mike Jonas
April 10, 2023 3:30 am

One of Enron’s biggest losses in Asia was the Dabhol LNG fired power station. I took a look at it when Enron was going bankrupt, but the difference between high cost LNG and the prices at which Maharashta State wanted to sell to its poor was not bridgeable. Coal would have been rather more fungible.

Izaak Walton
Reply to  Mike Jonas
April 10, 2023 4:32 pm

‘a growing investment opportunity for banks worldwide’. How well did that turn out for Enron? ”

Given that Enron was not a bank and it went bankrupt due to massive sustained fraud I am not sure what the connection between Enron and worldwide investment opportunities for banks is.

Joseph Zorzin
April 10, 2023 4:53 am

wow, it’s ironic pushing revolutionary ESG onto a still communist regine like Viet Nam

Dave Andrews
April 10, 2023 7:13 am

According to the IEA coal provides over 50% of Vietnam’s energy, with oil that rises to 75% and with gas as well to just over 80%.

Can’t see these ESG fanatics changing that much in the near future

AGW is Not Science
Reply to  Dave Andrews
April 10, 2023 10:19 am

The good news is if ASEAN countries (rightly) thumb their noses at ESG bullshit, that will be one less sinkhole for American tax dollars spent not in the US but for “foreign aid.”

We’re in debt far enough that those dollars should be used to reduce our national debt, let foreign nations fund their own “development,” and do it from the growth of their own economies. “Investing” in “renewables” in foreign countries (and in the US, for that matter) is just more money flushed down the toilet.

Reply to  AGW is Not Science
April 10, 2023 7:16 pm

We’re in debt far enough that those dollars should be used to reduce our national debt buy more votes.
AS they say around here, fixed that for you.,

April 10, 2023 7:45 pm

Stephen Wilde already talked about what I am going to say, good job Stephen. Terry Etam had an article a few days ago about the worrisome trend of more nations joining BRICS. My comment on Terry’s article was how can anyone be surprised that nations are lining up to join BRICS? More and more nations are going to tell the west to take a hike and we deserve it. How can we be so damn stupid? We need to boot our leaders now we are clearly headed in the wrong direction.

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