Explore Vietnam’s ESG and CBAM requirements and their impact on exporters. Learn how businesses can adapt to global sustainability standards.
I. Vietnam’s ESG Landscape and Government Policy
In recent years, Vietnam has positioned ESG as a strategic pillar for national sustainable development. This orientation is reflected in major government frameworks, including the National Green Growth Strategy 2021–2030 and the Prime Minister’s commitment to achieving Net Zero by 2050. ESG is no longer viewed as a voluntary corporate initiative but as a core driver of economic transformation, global competitiveness, and integration into high-standard international value chains.
Government ministries — including the Ministry of Industry and Trade (MOIT), Ministry of Natural Resources and Environment (MONRE), and Ministry of Planning and Investment (MPI) — have launched comprehensive programs on sustainable governance, low-carbon transition, energy efficiency, and mandatory greenhouse gas (GHG) reporting. These programs aim to build capacity for Vietnamese enterprises, helping them align with international standards and avoid risks associated with non-compliance (Bao Chinh Phu).
The government also emphasizes ESG as a strategic branding asset. Companies that adopt ESG practices effectively often experience enhanced corporate reputation, improved investor confidence, easier access to export markets, and higher resilience in global supply chains. As sustainability expectations rise globally, Vietnamese firms applying ESG early can position themselves as preferred partners for multinational buyers pursuing low-carbon and socially responsible sourcing (Thuong Hieu Quoc Gia).
II. CBAM: Implications for Vietnamese Exporters
The EU’s Carbon Border Adjustment Mechanism (CBAM) is reshaping the global trade landscape by introducing a carbon pricing requirement on imports with high embedded emissions — including steel, cement, aluminum, fertilizers, electricity, and hydrogen.
During the transition phase (2023–2025), exporters must submit detailed quarterly reports on emissions embedded in their products. From 2026 onward, EU importers will be required to purchase CBAM certificates, making accurate emissions data critical for market access.
Experts view CBAM as both a climate policy instrument and a form of “green technical barrier.” Without credible emissions measurement and low-carbon production, exporters risk higher compliance costs and potential loss of competitiveness. Vietnam must therefore strengthen its national monitoring systems, improve data transparency, and encourage enterprises to modernize production processes. (Tap Chi Cong Thuong).
Authorities in Ho Chi Minh City and other industrial hubs stress that complying with CBAM is no longer optional. Exporters must be prepared to disclose emissions across their entire supply chain — from raw materials and manufacturing to logistics — while simultaneously transitioning to cleaner energy sources. Companies that fail to adapt will face increasing difficulty entering the EU market, where sustainability requirements are tightening every year. (HCMC Government Portal).
As a result, CBAM is accelerating Vietnam’s shift toward sustainable manufacturing, reinforcing ESG as both a strategic priority and an operational requirement for long-term export viability.
III. How Vietnamese Businesses Can Comply with ESG–CBAM
1. Establish a greenhouse gas inventory and measurement system
A standardized GHG inventory is the foundation for CBAM reporting and Vietnamese regulatory compliance (e.g., Decree 06/2022). Companies need to create reliable measurement systems that track energy use, fuel consumption, process emissions, and indirect emissions in line with national guidelines and global frameworks such as ISO 14064 or the GHG Protocol.
Accurate data is essential for verifying emission factors, developing reduction strategies, and ensuring consistency with EU reporting templates.
2. Integrate ESG into corporate strategy and governance
Adopting ESG is not just about environmental indicators — it encompasses social responsibility, governance integrity, and long-term risk management. Vietnamese enterprises should embed ESG principles within corporate strategy, management structure, and performance evaluation systems.
The trend toward mandatory sustainability reporting under ISSB/IFRS standards means that transparent disclosure will soon become expected from large enterprises and publicly listed companies. Early adoption will give businesses an advantage as reporting obligations expand.
3. Reduce emissions through technology upgrades and renewable energy
Technology modernization is one of the most effective ways to reduce Scope 1 and Scope 2 emissions. High-impact actions include:
- Upgrading boilers, furnaces, and industrial machinery;
- Implementing energy-efficient production lines;
- Optimizing processes through digitalization and automation;
- Adopting on-site renewable energy such as rooftop solar.
These measures directly support CBAM compliance while strengthening ESG ratings and improving competitiveness across global supply chains.
4. Engage early with Vietnam’s emerging carbon market
Vietnam is preparing to pilot a domestic carbon market by 2025 and fully implement it by 2028. Early participation will help companies understand carbon pricing, explore carbon credit trading, and optimize compliance costs.
Engagement in carbon markets also prepares businesses for international mechanisms, enabling them to align more quickly with global buyers who increasingly require verified carbon-neutral or low-carbon supply chains.
Conclusion
ESG and CBAM are redefining global trade dynamics and corporate responsibilities. With clear policy direction from the Vietnamese government, businesses must transition from awareness to action — building emissions inventories, modernizing technology, adopting clean energy, and integrating ESG into long-term strategy.
Early adaptation will not only reduce regulatory exposure but also enhance global competitiveness, strengthen brand value, and secure Vietnam’s position in the future of sustainable international trade.
