Kenno Team Takes Part in Vietnam Access Days Conference: Insights and Market Outlook
Last week (Feb 28 – March 3), the Kenno team participated in the premier investment conference in Vietnam, Vietnam Access Days, organized by Vietnam’s leading investment bank, Viet Capital Securities. The conference brought together nearly 400 participants, including domestic fund managers, high-net-worth individuals, and foreign investors from various regions such as South Africa, Australia, the US, Canada, and Europe.
The 2023 edition was notable, given it featured an augural session on environmental, social, and governance (ESG) factors in Vietnam. This is an important step forward and a sign that the investment climate in the country is changing.
“More broadly, the conference set the tone for the rest of the year. While on the ground, it was a terrific opportunity for our team to meet with peers, gain strategic insights into the market and hear different viewpoints,” says Mikael Nastamo, CEO of Kenno.
Kenno’s team lined up 21 small group meetings with various companies ahead of the conference. These 45-minute discussions with the chief executives and chief finance officers of local businesses provided valuable insights into market trends and challenges.
Sink or Swim Session: Navigating Vietnam in 2023
During the conference, Kenno had the opportunity to attend the Sink or Swim panel discussion, which is an annual highlight of Vietnam Access Days. The session featured leading fund managers who shared their insights on the Vietnamese economy, including their views on recent market events and predictions for the future. “As observers, we gained valuable insights from the discussion and learned more about how other players view the market and the points on which they agree or disagree,” notes Mikael.
One of the key takeaways from the Sink or Swim session was the strength of the Vietnamese economy. The panelists discussed a range of positive developments that have taken place in recent years, and many agreed that this is an attractive time to invest in Vietnam – probably the best in the last decade!
ESG Session: Understanding Environmental, Social, and Governance Issues in Vietnam
“ESG awareness, adoption, and action are gaining traction in frontier markets, and we believe the next few years will see ESG adoption improving in high growth markets such as Vietnam,” remarks Giang Nguyen, Head of Investments at Kenno. “Therefore, our team was excited to participate in the ESG in Vietnam Session organized by PwC to learn more about recent developments and understand the mindset of local companies when it comes to reporting ESG matters,” she continues.
Although Vietnamese legislation currently does not require disclosure on sustainability practices, Kenno remains committed to reporting these to its investors. As a company incorporated in the European Union, we follow the EU’s Sustainable Finance Disclosure Regulation (SFDR).
The good news is that according to session host PwC’s report From Ambition to Impact local companies are increasingly recognizing the importance of environmental stewardship and social responsibility, even if local regulations are not yet in place. Driven by consumers, employees, and investors alike, 80% of companies have already made ESG commitments or plan to do so soon. Governance is leading their strategy for sustainability.
However, according to the report, success in achieving sustainability goals relies on a company’s ability to create a practical governance framework and empower senior leadership. While regulators are tasked with providing the necessary guidance for reporting requirements, Vietnamese companies must seek third-party assurance that their ESG disclosures will remain trustworthy.
The Importance of ESG Criteria in Investment Decision-Making: A Global Perspective
New financial industry requirements relating to ESG reporting and transparency are beginning to emerge and will affect the industry around the globe. For instance, the EU’s Sustainable Finance Disclosure Regulation (SFDR) comes into force later this year. Under the new regulation, funds will be required to report on a range of ESG criteria, including their carbon footprint and their approach to climate-related risks and opportunities. In addition, funds will also need to report on their Scope 3 emissions – indirect emissions that occur in a company’s value or supply chain – within their portfolios. While it may be challenging to comply with these regulations, fund managers must accept that this is the direction of travel.
“At Kenno, we have a clear goal and plan in place vis-à-vis ESG reporting in 2023,” explains Mikael. Kenno aims to lead rather than follow and to show investors precisely what they are doing and objectively measure the results. By doing so, the team believes that they can ultimately deliver stronger returns for their investors. “A sustainability-driven corporate mindset can help deliver healthier profits in the short term and create more value over a longer timeframe,” he concludes.
The Vietnamese market is also putting more emphasis on ESG matters, especially as Vietnam is becoming known as the factory of the world. The new taxonomy rules in Europe require companies to audit their supply chains more rigorously, which will likely have an impact on Vietnamese suppliers to European companies. It’s an important step forward that Vietnam is committed to advancing sustainability, with the government leading the charge to promote ethical objectives. By creating relevant policies that galvanize businesses into action, they are helping to achieve meaningful national commitments related to ESG goals.
Kenno’s Commitment to Sustainable Investing and Active Ownership
Kenno has always integrated ethical criteria into its processes since the Asia Top Picks Fund’s inception, and it’s a fundamental aspect of the company’s DNA, passed down from their days as part of a family office. By putting a greater emphasis on the ethical practices of portfolio companies, Kenno is convinced that it can provide more significant returns to its investors.
Kenno’s team is determined to learn what their responsibilities are within the business ecosystem and educate companies on the importance of ESG factors. This is what the active ownership approach is all about – working with companies to help them identify areas where they can improve and providing guidance on best practices.
As one of the leading investment managers in the region, Kenno takes its role in promoting sustainable development seriously. By investing in companies that share its values and supporting sustainable business practices, Kenno aims to contribute to a better future for Vietnam and its people.
Creating a Culture of Responsibility: How Kenno’s Team is Making a Difference
Looking ahead, the Kenno team sees a bright future for the Vietnamese economy. “While there are certainly challenges to overcome, such as infrastructure bottlenecks and a shortage of skilled labor, we firmly believe that the country is on the right track,” clarifies Giang. The government’s dedication to economic reform, along with the growing middle class and thriving entrepreneurial scene, indicates a promising future for Vietnam.
“At Kenno, we are excited to be part of this journey,” continues Giang. “By investing in high-quality companies that are committed to sustainable growth, we believe that we can generate attractive returns for our investors while making a positive impact on society and the environment,” she concludes.
At Kenno, we are excited to have participated in the Vietnam Access Days 2023 conference, which provided our team with valuable insights into the Vietnamese market and the latest trends shaping it, as well as an opportunity to reconnect and network with relevant stakeholders in the market. As we continue our efforts in the region to build a more sustainable and prosperous future, we invite investors to join us in exploring the fantastic opportunities that the growing Vietnamese market provides. If you are interested in learning more, please contact us at Kenno to discover how we can help you get involved.