FPT IS and EuroCham introduce Vietnamese enterprises to the latest green transformation orientation

Recently, FPT IS and EuroCham co-chaired a breakfast briefing titled “From ESG Framework to Decarbonisation Plan”. At the event, experts discussed the current landscape, practical experience, and technological solutions to help Vietnamese enterprises accelerate green transformation, proactively optimize production processes and deploy emission reduction solutions, aiming to achieve the Net Zero goal in accordance with international ESG standards.

ESG experts at the event

The breakfast briefing brought together speakers who are top ESG experts and more than 50 leading corporate leaders in Vietnam in transportation, manufacturing, and others.

Opening the event, Mr. Torben Minko, Vice-chair of the European Chamber of Commerce in Vietnam (EuroCham) stated: “To achieve the Net Zero target by 2050, Vietnam needs both national efforts and contributions from industries and enterprises through proactively improving production processes, implementing carbon footprint reduction initiatives… Responding to this demand, EuroCham and FPT IS co-host this breakfast briefing to provide an overview of the current landscape and how we can jointly prepare a clear emission reduction roadmap to obtain the target with an integrated strategy”.

Green Transformation Practices – Sustainable Business Strategies

Addressing the overall landscape and international regulations on emission reduction, Mr. Dennis Quennet, Director of Sustainable Economic Development at GIZ Vietnam expressed: “According to the European Parliament, the EU is committed to reducing greenhouse gas (GHG) emissions by 55% by 2030 and achieving carbon neutrality by 2050. This commitment will directly impact European enterprises and those with exposure to the European market, creating a mandatory shift for businesses in ESG compliance and reporting starting from 2025 or 2026. Accordingly, companies, including those from Vietnam, will have to familiarize themselves with ESG due to supply chain relationships.”

Mr. Dennis Quennet, Director of Sustainable Economic Development at GIZ Vietnam, speaking at the event.

Talking about enterprises’ interests, Mr. Dennis Quennet emphasized that great opportunities are exposing to companies to create breakthroughs: “In the medium and long term, enterprises will enormously benefit from ESG investing, especially those that take early steps. In addition to the readiness to meet green transition regulations, well-prepared businesses also gain competitive advantages by enhanced transparency and reputation, improved risk management and reduced production costs in the long run.”

In Vietnam, the Government has issued documents on strategic orientations, action plans, and action programs at the national and sectoral levels, which align with international commitments on sustainable development throughout the period from 2017 to present. Mr. Nguyen Viet Long, Partner, Consulting at Ernst & Young Vietnam Limited (EY Vietnam), a company with more than 20 years of experience in delivering consulting services on sustainable development, said that specific mechanisms, policies and support programs from state management agencies are necessary to promote and encourage businesses to implement green and sustainable production models. Mr. Long has been an advisor to various Vietnamese ministries, including the Ministry of Transport, the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development, and others, on such matters. Additionally, digital transformation is expected to be the driving force for green transformation, which in turn realizes green growth and sustainable development goals at both the corporate and national levels.

Mr. Nguyen Viet Long, Partner, Consulting at EY Vietnam, talking about green transformation

Addressing the shift towards green growth required for enterprises, Mr. Than Minh Ngoc, Senior Vice President & Deputy Director of the Enterprise Sector at FPT IS, highlighted three major challenges faced by Vietnamese companies during the implementation of sustainable practices, according to the report on “Enterprises’ readiness and difficulties in green transformation” conducted by Vietnam’s Private Economic Development Research Board (Board IV) at the end of July.

First, in terms of budget, businesses’ major concerns and considerations lie at balancing the cost of investment in green transformation and corporate profits. Second, in terms of human resources, up to 46.8% of Vietnamese enterprises are in short of personnel with expertise in emission reduction and green transformation while regulations and standards in Vietnam and the world are changing rapidly. Third, in terms of solutions and tools, up to 44.2% of businesses have not yet found suitable technological solutions. Many Vietnamese companies are performing manual measurement, leading to errors, fraud, and lack of data transparency.

Technology addresses the cost-benefit divide, charting a course for effective emission reduction practices

To tackle the above-mentioned problems, Mr. Pham Tuan, Co-founder of VertZéro solution at FPT IS, stated that businesses need to answer key questions about the following issues: Current status of emission reduction in enterprises; Plans and goals with specific timelines; Determination of financial impacts on emission reduction scenarios to prioritize appropriate investment options; How to cooperate with suppliers to find emission reduction solutions suitable for businesses.

Technology and data, according to Mr. Tuan, would be the solution as companies are currently using MS Excel to calculate and monitor their carbon emissions, which leads to errors and fraud. Without actual monitoring, corporate emissions reduction efforts will be nothing more than greenwashing – making false claims and reports that mislead consumers and customers without actually taking green practices.

Mr. Pham Tuan, Co-founder of VertZéro solution at FPT IS, sharing initiatives to help businesses make green transformation

Mr. Tuan’s recommendations were to apply the SBTi and MACC standards-based ESG implementation methods. The SBTi was an initiative formed between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF), providing science-based emission reduction targets for businesses and organizations. Setting science-based targets has become part of companies’ annual reporting and databases for institutional investors through the adoption of CDP questionnaires. SBTi is currently used by over 20,000 companies worldwide, to help align current business information with Net Zero goals, flexibly meeting emission standards for each industry and region.

Marginal Abatement Cost Curves (MACC) is an economic analysis tool that helps identify the measures to reduce greenhouse gas emissions at the lowest cost. MACC is a popular model used by the World Bank and other major banks. Leveraging the benefits of MACC, FPT IS has researched and launched the VertZéro solution – the first carbon accounting tool in Vietnam using MACC.

VertZéro enables enterprises to define boundaries and measure emissions in three scopes, disaggregate multidimensional emissions, and access global emissions factors. Accordingly, basis are formed for businesses to set emission reduction targets and monitor actual emissions. Once information is made transparent, the solution helps companies prepare GHG inventory reports in accordance with Decree 06/2022/ND-CP, ISO 14064, GHG Protocol, IPCC and other regulations. With VertZéro, organizations are holding the key to carbon accounting automation: Comply with regulations and standards; Update emission factors; Connect data from suppliers; Automatically generate reports.

Green transformation experts answering questions from businesses.

At the end of the event, corporate leaders expressed their interest and raised multi-dimensional questions related to the roadmap, methods and technologies supporting green transformation in fields such as petrochemicals, iron, steel, transportation, and others, which are in urgent need of green practices in Vietnam.

With the commitment and support from FPT IS, EuroCham, EY Vietnam and GIZ Vietnam, Vietnamese enterprises are empowered to make rapid steps toward the Net Zero goal, create breakthroughs in business, and play its part in fostering the sustainable development of the country and the world.

Learn more about the VertZéro carbon accounting solution here.