3.1. Overview of low-carbon emission strategies in Vietnam and over the world
Climate change and environmental degradation are considered the major challenges for the development and existence of humanity in the 21st century. According to the assessment of the Intergovernmental Panel on Climate Change (IPCC), the main cause of global climate change is due to excessive greenhouse gas emissions from human socioeconomic development activities. CO2 accounts for 93% to 95% of total greenhouse gas emissions, the remaining 5% -7% consist of other gases such as nitrogen oxides (NOX) and different sulfur compounds. To deal with greenhouse gas emissions and limit the increase in the average temperature of the Earth, the United Nations Framework Convention on Climate Change (UNFCCC) was signed by 155 countries at the United Nations Conference on the Environment and Development at Rio de Janeiro in 1992 with the goal of stabilising greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate. Since then, reducing greenhouse gas emissions has always been the main topic of negotiations at the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP).
Along with the development of the economy, Vietnam is becoming a significant greenhouse gas emission centre. Although Vietnam’s absolute emissions are still small compared to developed countries, this volume is growing rapidly, even too fast for the size of the economy. Vietnam is the 13th largest carbon-emitting economy in the world, measured by emissions per GDP, and ranks 4th among low-middle income countries in East Asia.
As one of the countries most affected by climate change and realising the importance of reducing carbon emissions, Vietnam always shows responsibility and proactively implements international commitments. Many policies, solutions, research, and practical actions to respond to climate change have been developed and implemented synchronously. Vietnam has supported the United Nations Framework Convention on Climate Change and actively participated in legal agreements related to climate change mitigation, specifically Vietnam signed the 1992 Climate Convention, ratified in 1994; signed the Kyoto Protocol in 1998 and ratified it in 2002; established a National Steering Committee for the Implementation of the Climate Convention and the Kyoto Protocol; Vietnam submitted the Intended Nationally Determined Contributions (INDC) in 2015; signed and approved the 2016 Paris Agreement. Following the approval of the Paris Agreement, Vietnam’s INDC has become a required contribution and is responsible for implementation. On 28 October 2016, the Prime Minister issued the Plan to implement the Paris Agreement with 68 important tasks assigned to ministries, branches, localities, and businesses to implement by 2030.
3.2. Current application of low-carbon measures of LSPs in Vietnam
As mentioned in the methodology, we classify the low carbon emission operation in Vietnam into four groups: freight transportation, warehousing, packaging, and information system. By measuring the application of each group in both Vietnam companies and foreign companies, this section focuses on comparing and pointing out the different levels of action to reduce carbon emissions applied in that two types of companies. Some causes will be discussed accordingly. Data from the applied measurement are displayed in four figures, according to four groups of low carbon emission. Besides,
Appendix A will be used as an additional source to show the gap between means of adopted level of each activity in foreign and nonforeign invested companies: gap indexes highlighted in red belong to the highest gap group, data in orange is the second group, and pink is the lowest one. Green data dedicate that the gap is negative, meaning Vietnamese LSPs are more active than foreign in applying that initiative.
In general,
Figure 1 shows that foreign-invested companies are more likely to adopt operations in freight transportation to reduce carbon emissions than non-foreign-invested companies, with positive mean gaps that are almost ranked from 0.3 to 1 and 50% of those data are marked in red—highest gap’s group (
Appendix B). On the one hand, optimising transportation load and minimizing the ‘zero’ truckload are the most common activities used in both types of companies, 100% foreign LSPs and 88.8% Vietnam LSPs applied respectively. Although the act of replacing roads with waterways and rail transport is rarely used. On the other hand, regardless having foreign investment or not, almost standard deviations are higher than one and there is very insignificant difference between those two groups of companies. Hence, there is a strong view that the applied levels are spread among different companies. It can be explained by the variety of company sizes and total income, as mentioned before.
Respondents from companies which invested by foreigners point out that they have higher adoption of reducing carbon emission operation in warehouse, in comparison with those which received capital from Vietnamese only. The average means of Vietnam LSPs is 3.22 while the average means of foreign invested companies is 3.67 with 8 out of 9 indexes higher. In addition, warehouse is the sectors which have the most remarkable differ of adopted levels between two types of companies: 4 out of 9 indexes belong to highest gap group (0.65-1) and highlighted in red (Appendix 2). Furthermore, based on the survey results, almost foreign invested LSPs are likely to apply low-carbon warehouse activities with 6 out of 9 standard deviations lower than one. However, the adopted levels in non-foreign invested companies are more diverse with all standard deviations being higher than 1, in specific, most of the indexes being higher than 1.2. In general, it is clear that low carbon emission operations are both limited and uneven applied in the warehousing sector of domestic LSPs.
Table 3.
The level of low carbon operation in warehousing applied at non-foreign invested and foreign invested LSPs in Vietnam.
Table 3.
The level of low carbon operation in warehousing applied at non-foreign invested and foreign invested LSPs in Vietnam.
Code |
Description |
Foreign invested company |
Non-foreign invested companies |
Mean |
Std.Dev |
Mean |
Std.Dev |
WH1 |
Using solar energy system at warehouse |
2.91 |
1.59 |
2.26 |
1.35 |
WH2 |
Using energy-saving lighting equipment |
3.55 |
1.09 |
3.62 |
1.22 |
WH3 |
Using environmentally friendly fuel in loading and unloading vehicles |
3.09 |
0.91 |
2.93 |
1.32 |
WH4 |
Controlling energy consumption in the warehouse |
4.00 |
1.22 |
3.57 |
1.30 |
WH5 |
Using automatic equipment at the warehouse |
3.45 |
0.79 |
3.21 |
1.32 |
WH6 |
Using a combination of multiple energy sources in the operation of the warehouse |
3.64 |
0.99 |
2.95 |
1.26 |
WH6 |
Using recycled/environmentally friendly materials in building the warehouse |
3.64 |
0.90 |
2.95 |
1.03 |
WH8 |
Warehouses are located at convenient traffic areas |
4.45 |
0.79 |
3.90 |
1.16 |
WH9 |
Warehouses are located far from residential areas |
4.27 |
0.76 |
3.60 |
1.20 |
In packaging sectors, the general adoption level of the company that received capital from oversea sources is still higher than that of domestic firms, a common trend. However, the low-carbon operation in packaging is recorded as the group that has the most consistent adopted measurement in comparison between foreign invested and domestics firms. The gap between means of those two types of company is nearly all marked in pink—the lowest group, with almost figures lower than 0.2. Moreover, the standard deviations of both foreign and non-foreign invested firms are all lower than one for PA1, PA4, and PA5 while higher than one for PA2, PA3, and PA4. Hence, nearly all low-carbon activities in packaging sector are applied under a similar diversity in both types of companies. On the other hand, according to the survey, there are only 3% of 159 companies, which never applied any operation to reduce carbon emission in packaging. There are nearly 60% of the respondents, who use environmentally friendly operations more often in packaging. Therefore, packaging is considered an easy group to adopt low carbon emission operations.
Table 4.
The level of low carbon operation in packaging applied at non-foreign invested and foreign invested LSPs in Vietnam.
Table 4.
The level of low carbon operation in packaging applied at non-foreign invested and foreign invested LSPs in Vietnam.
Code |
Description |
Foreign invested company |
Non-foreign invested companies |
Mean |
Std. Dev |
Mean |
Std. Dev |
PA1 |
Using reusable packaging |
4.00 |
0.75 |
3.60 |
0.88 |
PA2 |
Using recyclable packaging |
3.55 |
1.09 |
3.50 |
1.01 |
PA3 |
Using biodegradable and biodegradable packaging |
3.27 |
1.07 |
3.12 |
1.08 |
PA4 |
Asking partners to use eco-friendly packaging |
3.09 |
1.10 |
2.88 |
1.08 |
PA5 |
Optimizing the amount of goods contained in each package |
4.00 |
0.75 |
3.88 |
0.88 |
PA6 |
Managing used packaging |
3.82 |
0.85 |
3.76 |
1.16 |
Compared with the other three groups of low carbon emission, technology has the highest average mean of adoption level in both types of firm: 4.62 for oversea invested companies and 4.33 for domestic companies. On the scale of 5, nearly all foreign invested LSPs have the application level at 4 or 5, there is only 9.1% of respondents who are often (score 3) applied low carbon emission operation, use electronic invoices and vouchers in specific. For companies, which are invested by Vietnamese only, the mean data are lower, but mostly still higher than 4.3. When comparing the means of applied level of each activity in the technology group, there are no data marked in yellow. It means that the applied level in companies which have capital from foreigners domestic only is similar as in every kind of technology operation. It is reasonable because technology serves as a means to improve the overall effectiveness and efficiency of the logistics system, not only simplifying tasks but also saving time, costs, and reducing the labour required for operations. (Bhandari, 2014). Furthermore, the applied level of reducing carbon emission reduction applied in technology is remarkable consistent among companies. Based on the survey, the standard deviations of Vietnamese companies are all less than 0.84 while the similar indexes of foreign invested companies are even lower than 0.67. Hence, technology is the only one out of four mentioned groups has 100% standard deviation lower than one. All data strongly show that technology is applied widely in reducing carbon emissions, regardless types of business, company size, or history of development.
Table 5.
The level of low carbon operation in technology applied at non-foreign invested and foreign invested LSPs in Vietnam.
Table 5.
The level of low carbon operation in technology applied at non-foreign invested and foreign invested LSPs in Vietnam.
Code |
Description |
Foreign invested company |
Non-foreign invested companies |
Mean |
Std. Dev |
Mean |
Std. Dev |
TE1 |
Replacing paper invoices and vouchers by electronic invoices and vouchers |
4.55 |
0.67 |
4.48 |
0.80 |
TE2 |
Digitizing documents & internal data systems |
4.55 |
0.51 |
4.36 |
0.75 |
TE3 |
Using information technology to manage orders |
4.73 |
0.45 |
4.38 |
0.69 |
TE4 |
Using information technology to plan order fulfillment |
4.73 |
0.45 |
4.29 |
0.63 |
TE5 |
Using information technology to design logistics networks |
4.55 |
0.51 |
4.14 |
0.84 |
By calculating the gap of 26 indexes of collected adoption levels in foreign and non-foreign invested companies, it can be seen that there are only two negative gaps while the 24 other figures are higher than zero. In general, nearly all companies that received capital from foreigner are applied low carbon emission operation more widely than those that only got domestic investment. In this case, the largest gaps belong to activities, which require significant budget for investment in properties, such as means of transportation, control system, friendly environmental systems, or other kind of long term changing like fuels. In addition, the smallest gaps are about optimising usage of companies owned subjects or low-value things such as lighting equipment.
Figure 2.
Gap between low-carbon initiatives adoption of surveyed LSPs.
Figure 2.
Gap between low-carbon initiatives adoption of surveyed LSPs.
The first reason could be explained the difference between two types of companies in adoption of low carbon emission operation is capital background. According to the Vietnam Logistics Report 2019, the financial potential of Vietnamese logistics companies is limited with 80% of established enterprises have a registered capital less than two billion VND. Within the limitation of financial resources, Vietnam LSPs are extremely difficult to be affordable for updating new technology, transferring transportation means, and investing in facilities to enhance effectiveness and reduce greenhouse accordingly.
Figure 3.
Means of adoption level of low-carbon emissions of surveyed LSPs.
Figure 3.
Means of adoption level of low-carbon emissions of surveyed LSPs.
Some strong opinions believe that the gap of acknowledgement and effort to cut down carbon emission between developed and developing countries. According to Delgado (2021): “The Paris Agreement acknowledges that efforts toward reducing carbon emissions will be common but not equal among developed and developing countries. The fairness of these contributions will be determined by national circumstances so that there will be equity in the responses and responsibilities to address climate change.’ It means that developing countries will continue to emit more carbon until they are developed enough and independent from the carbon-intensive industry. In addition, Younis (2015) states that developing countries still lack of knowledge about the consequences of emissions and their pursuit of profit and economic growth prevents leaders from making ethical decision to protect the environment. While most of the foreign invested LSPs in Vietnam come from developed countries like Denmark (Maersk), Japan (Yusen), Germany (DHL, DB Schenker), and so on. It is obvious that their awareness of environmental protection is more comprehensive than that of companies originating from developing countries like Vietnam. Consequently, to reduce carbon emissions for each operation group, foreign-invested companies always have higher adoption levels than Vietnam’s government owned ones.
Finally, the dominance of LSPs invested by oversea resources is also considered as one of the most important factors to explain why foreigner invested firms applied a more low carbon emission operation. Logistics experts commented that the number of foreign-invested LSP in Vietnam is quite small compared with total logistics services provider in Vietnam, 25 firms for specific, but they accounted 75%-80% market share (Pham, 2019). Moreover, almost foreigner-invested firms in Vietnam are operating globally. Therefore, foreign companies invested in Vietnam have extraordinary backgrounds, experience, significant financial and a human resources, and comprehensive understanding of the environment. At the same time, worldwide operation also requires that those firms comply with the environmental regulation of each country and area, especially in the cases of countries that signed the Kyoto Protocol. In particular, those countries set goals to reduce C02 by commitment periods: parties committed to reduce GHG emissions by at least 18 percent below 1990 levels in the eight-year period from 2013 to 2020. In order to achieve that goal, nearly all participating countries set up related regulation to low carbon emission accordingly, such as the US released National GHG emission standards for light trucks, The Safer Affordable Fuel Efficient Vehicles (SAFE) for Model Years 2021-2026. (United States Environmental Protection Agency, 2021). Consequently, these regulations force all international LSPs to apply low carbon emission and, obviously, foreigner invested LSPs in Vietnam cannot resist while they are operating as a part of global logistics systems.