Project Details
Project Description
The Vietnamese government has set a target of achieving net zero emissions by 2050 at COP26. Corporate transition plays an important role in contributing to the country achieving its emission reduction targets. Our preliminary calculation of energy usage from Vietnam’s largest 3000+ companies estimates that companies’ scope 1 and 2 represented a significant proportion of Vietnam’s total energy and industrial emissions in Vietnam’s 2022 NDC.
Vietnam's corporate sector presents a multifaceted picture when it comes to readiness for the net-zero transition by 2050. Businesses in Vietnam have started showing interest in energy transition and lowering their carbon footprint, especially big corporations with international exposure. However, most of the companies in Vietnam are in a very preliminary stage when it comes to decarbonisation pathways and transition plans, including the financial and banking sector. Major banks and corporations also lack a structured approach to measuring their carbon footprint, have not reported on climate metrics, and have not set their Greenhouse gas
emission targets (PwC, 2021).
International agreements and treaties such as the Carbon Border Adjustment Mechanism (CBAM) and the EU Strategy for Sustainable and Circular Textiles are putting pressure on Vietnamese business to decarbonise. The former puts a price on the carbon emissions embedded in goods exported to the EU, especially on four main industries: iron and steel, cement, fertilizer and aluminium, while the latter influences Vietnam’s textile industry to adopt more environmentally-friendly practices. In addition, Vietnam’s national policies such as the
National Strategy for Climate Change to 2050, National Energy Master Plan for 2021 - 2030, National Electricity Development Plan for 2021 - 2030, with a vision to 2050 and related policies all set out a long-term vision for a low-carbon economy and decarbonise the main economic sectors.
However, there are limited levers for Vietnamese corporations to decarbonise at scale. Compliance measures and policy incentives through regulatory frameworks are not available to trigger action from the business community. At the same time, there are significant knowledge gaps in terms of understanding what good looks like and what are industry best practices.
This lack of preparedness of the business community poses a threat to Vietnam to achieve its climate target. At the same time, it can negatively impact Vietnam's economic and trade competitiveness. Vietnam's heavy reliance on exports makes its businesses vulnerable to tightening environmental and climate standards and regulations set out by their trading partners. As the EU, US, UK and Australia seek to implement stronger climate measures globally, Vietnamese companies are at risk of losing their competitiveness in these important markets.
It is critical to take actions now to help businesses better prepare for their corporate transition plans to support Vietnam in achieving its national emission reduction targets, while at the same time help Vietnamese companies to respond to emerging global climate requirements.
Climateworks Centre plans to work with the Vietnam Chamber of Commerce and Industry (VCCI), a national organisation which represents the business community and is crucial in helping businesses with their transition plans. Our plan is to partner with VCCI to support the business sectors in their decarbonisation pathways in a multi-year program, introduce new concepts such as Net Zero Hub (NZH), provide training and share good practices with Vietnamese stakeholders. This partnership can leverage VCCI’s extensive business
network, market guidance, and government connection to better promote policy changes along the process. VCCI also has its own branch and affiliated network across the country, which enables the project to engage with targeted sectors at sub-national levels as well.
Vietnam's corporate sector presents a multifaceted picture when it comes to readiness for the net-zero transition by 2050. Businesses in Vietnam have started showing interest in energy transition and lowering their carbon footprint, especially big corporations with international exposure. However, most of the companies in Vietnam are in a very preliminary stage when it comes to decarbonisation pathways and transition plans, including the financial and banking sector. Major banks and corporations also lack a structured approach to measuring their carbon footprint, have not reported on climate metrics, and have not set their Greenhouse gas
emission targets (PwC, 2021).
International agreements and treaties such as the Carbon Border Adjustment Mechanism (CBAM) and the EU Strategy for Sustainable and Circular Textiles are putting pressure on Vietnamese business to decarbonise. The former puts a price on the carbon emissions embedded in goods exported to the EU, especially on four main industries: iron and steel, cement, fertilizer and aluminium, while the latter influences Vietnam’s textile industry to adopt more environmentally-friendly practices. In addition, Vietnam’s national policies such as the
National Strategy for Climate Change to 2050, National Energy Master Plan for 2021 - 2030, National Electricity Development Plan for 2021 - 2030, with a vision to 2050 and related policies all set out a long-term vision for a low-carbon economy and decarbonise the main economic sectors.
However, there are limited levers for Vietnamese corporations to decarbonise at scale. Compliance measures and policy incentives through regulatory frameworks are not available to trigger action from the business community. At the same time, there are significant knowledge gaps in terms of understanding what good looks like and what are industry best practices.
This lack of preparedness of the business community poses a threat to Vietnam to achieve its climate target. At the same time, it can negatively impact Vietnam's economic and trade competitiveness. Vietnam's heavy reliance on exports makes its businesses vulnerable to tightening environmental and climate standards and regulations set out by their trading partners. As the EU, US, UK and Australia seek to implement stronger climate measures globally, Vietnamese companies are at risk of losing their competitiveness in these important markets.
It is critical to take actions now to help businesses better prepare for their corporate transition plans to support Vietnam in achieving its national emission reduction targets, while at the same time help Vietnamese companies to respond to emerging global climate requirements.
Climateworks Centre plans to work with the Vietnam Chamber of Commerce and Industry (VCCI), a national organisation which represents the business community and is crucial in helping businesses with their transition plans. Our plan is to partner with VCCI to support the business sectors in their decarbonisation pathways in a multi-year program, introduce new concepts such as Net Zero Hub (NZH), provide training and share good practices with Vietnamese stakeholders. This partnership can leverage VCCI’s extensive business
network, market guidance, and government connection to better promote policy changes along the process. VCCI also has its own branch and affiliated network across the country, which enables the project to engage with targeted sectors at sub-national levels as well.
| Status | Active |
|---|---|
| Effective start/end date | 1/10/24 → 30/09/25 |
Keywords
- SDG 13
- Net Zero Emissions