Energy - The main factor causing greenhouse gases in Vietnam

For companies that have conducted research and taken actions toward green transition, the factor of greenhouse gas emissions from energy is no longer unfamiliar to them. Although the company is gradually integrating the ESG (environment - society - governance) model or reducing emissions to achieve carbon neutrality, the energy pillar contributes significantly up to 70% of the success in this journey of the company. Energy provides indispensable power and development for the global 4.0 economy, but it is also the greatest threat to climate change. Energy has a wide coverage, in addition to common energies such as electricity, heat and chemicals, fossil fuels such as oil, coal or natural energies such as firewood and steam are also within the scope of energy.

In Vietnam, greenhouse gas emissions from the energy factor also accounted for the largest proportion, according to the Ministry of Natural Resources and Environment, energy emissions accounted for 65% of the country's total greenhouse gas emissions in 2016, about 205 million tons of CO2 equivalent (CO2e). In the distribution of energy-related emission items in Vietnam, energy used in industry and construction accounted for 18.6% and transportation accounted for 17.4%, which are closely related to businesses.

Recognizing the country's actual situation, at the 28th Conference of the Parties to the UNFCCC (COP28), the largest in history which took place in early December 2023 in the UAE, Prime Minister Pham Minh Chinh shared a bold action plan to implement Vietnam's commitments, affirming the credibility and image of a country that "does what it says". Within the framework of the event, efforts to respond to climate change and step up diplomacy were rewarded with an initial USD 15.5 billion in funding from the group of international partner countries. Vietnam's plan to mobilize resources to implement the Just Energy Transition Partnership (JETP) at COP28 opens up opportunities for renewable energy development and promotes a "green" energy transition. As the third country in the world to implement JETP (after South Africa and Indonesia), Vietnam is currently leading the green transition trend in Southeast Asia and serves as a role model for developing countries.

Understanding the trends of the country and major emission sources is the foundation for companies' green transition journey. Without energy usage data, establishing a sustainable ESG development strategy for businesses will become extremely difficult.

Energy is closely related to most of the company's greenhouse gas emissions, according to the World Business Council for Sustainable Development (WBCSD), which surveyed over 200 of its members in 2015, the results showed that energy was responsible for up to 75% of total scope 1 and 2 emissions. It is also the lifeblood of business operations, while shifting it seems difficult, it promises many opportunities for sustainable development, achieving carbon neutrality and reducing operating costs.