HCMC Meet & Greet Event Recap: ‘Navigating the requirements of CBAM and Vietnam’s Carbon Trading Market’
At our most recent event in Ho Chi Minh City, brands and suppliers spanning a variety of sectors — from Footwear to Food & Beverage, Engineering, Procurement and Construction — joined us to discuss the Carbon Border Adjustment Mechanism (CBAM) and Vietnam’s upcoming Carbon Trading Market. Forty people were in attendance, representing global brands including companies like Adidas, Decathlon, Lululemon, Vinamilk, SourceByNet and many more.
CBAM at a glance
Regulatory compliance is taking centre stage in the efforts by countries to curb carbon emissions. The EU’s Carbon Border Adjustment Mechanism (CBAM) is a key example and works as a carbon tax on import goods to the EU, requiring companies to measure their emissions (Scope 1, 2 and 3) and drive decarbonization efforts to comply with the requirements.
Naturally, the topic generated significant interest among participants in Vietnam, particularly from businesses involved in exporting goods to Europe. After all, those that mostly swiftly comply with regulations will come out on top, both in terms of competitive advantage and sustainability success.
Being able to react and respond to CBAM will be critical for supplier groups across multiple sectors in Asia including Companies in Vietnam.
Vietnam’s Carbon Trading Market: Emission measurement & reduction in focus
In addition to CBAM, Vietnam’s planned Carbon Trading Market is expected to affect companies operating in the country, especially heavy emitters. Accordingly, conversation at the event centred around emission measurement and reduction efforts; participants raised concerns about efficient data collection and verification, an issue which commonly arises from suppliers’ inaccurate reporting. This poses a huge sustainability impact and reputational risk for brands, whose outcomes can fall short of their commitments as a result.
Brands also sought practical guidance on how to help their suppliers set effective Science-Based Targets in response to these challenges, a topic which is gaining increasing traction across the decarbonization landscape.
Additional Q&A Insights
How can we ensure that the data collected during GHG inventory of the company/factory/organization is accurate?
Companies should follow standards such as GHG protocol /ISO14064 to prepare the GHG inventory. Necessary quality control measures at the time of GHG activity data collection process should be considered and audited by an internal team, with a focus on data handling, documentation, and emission calculations. Companies seeking greater credibility can also consider external verification via an accredited GHG auditor.
How can we, as brands, effectively assist suppliers in setting science-based targets while many of them face challenges in terms of scale, finances, and regulations?
Brands must undertake an emission mapping exercise to identify strategic suppliers (on the basis of their respective contributions in scope 3 GHG inventory). Depending on the resources available, brands can employ internal teams or external advisors to focus on the development of organization wide GHG inventory, target development and action planning. A low-carbon roadmap should be an integral part of the engagement strategy. It should not only develop the targets but also inform suppliers how they can achieve their operational targets, and at what cost. A clear plan instils confidence in suppliers and empowers them to take ownership and responsibility of their decarbonization journey. Encouraging suppliers with incentives doesn’t hurt either.
Companies that demonstrate compliance can remain resilient and enhance their business competitiveness and appeal to responsible buyers, clients, and investors. If your organisation needs help navigating the complexities of CBAM, get in touch with our team for support.
get in touch
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