In Vietnam, the rapid expansion of the e-commerce sector within the Courier, Express, and Parcel (CEP) industry is reshaping the market. While accelerating convenience and reach, this growth brings to light environmental implications, particularly in greenhouse gas (GHG) emissions, making it increasingly clear that adopting sustainable practices for e-commerce businesses isn't just beneficial — it's imperative. In this blog, we explore the pivotal reasons for this shift, highlighting how the adoption of eco-friendly strategies is becoming a common aspect of the longevity and success of e-commerce operations in a sustainability-focused future.
1. Rising greenhouse gas emissions
Vietnam's e-commerce boom, powered by the CEP industry, has been a catalyst for economic growth. However, this expansion comes with significant environmental costs, notably in the form of escalating GHG emissions. The CEP industry, crucial for e-commerce logistics, is at the forefront of this surge. According to McKinsey, predictions indicate that Vietnam's total GHG emissions might approach 1.5 billion tons of CO2 equivalent by 2050, highlighting the urgent need for sustainable interventions. A substantial portion of these emissions, approximately 19.3%, according to Vietnam Briefing, is attributed to transportation activities and work integral to e-commerce — from parcel transit between customer homes and warehouses to shipments destined for airports. This stark data emphasises the environmental implications of the CEP industry's growth and the critical role of adopting sustainable practices within the e-commerce sector to mitigate these impacts.
2. Aligning with global sustainability trends
The consumer shift towards eco-consciousness has redefined market preferences, making sustainability an essential factor for differentiation. For e-commerce businesses aiming to distinguish themselves in a competitive landscape and build enduring trust, aligning with global sustainability trends is crucial. Adopting green practices such as eco-friendly packaging and transparent sustainability reporting, for example, not only boosts a brand's global appeal but also underscores its commitment to environmental stewardship. This approach responds to the increasing demand for responsible brands, setting companies apart from their competitors and fostering consumer trust. Furthermore, it supports global environmental objectives, showcasing a brand's dedication to sustainability. This commitment enhances customer loyalty and positions sustainability as a strategic advantage for growth across local and international markets.
3. Contributing to national and global environmental goals
E-commerce businesses in Vietnam embracing sustainable practices are not just enhancing their operational efficiency but are also playing a pivotal role in the country's environmental sustainability strategy. By implementing best measures such as reducing packaging waste, optimising logistics to lower fuel consumption, and investing in carbon offset programmes, these businesses directly contribute to lowering Vietnam's GHG emissions. Such initiatives align with the country’s ambitious commitment to achieving net-zero emissions by 2050, which mirrors global efforts to combat climate change.
Moreover, sustainability reporting allows e-commerce companies to share their progress and impact on environmental goals transparently, encouraging a culture of accountability and continuous improvement while fostering investor confidence and enhancing market competitiveness. This supports Vietnam's national environmental objectives and contributes to the broader global agenda of sustainable development.
4. Future-proofing against regulatory changes
Adapting to the evolving environmental regulatory landscape is increasingly becoming a cornerstone for the long-term viability of businesses. As governments worldwide intensify efforts to combat climate change, compliance with emerging sustainability standards is about adherence and strategic foresight. E-commerce businesses that proactively integrate sustainable practices and commit to comprehensive Environmental, Social, and Governance (ESG) reporting place themselves at the forefront of this transition. This proactive approach mitigates the risk of future regulatory hurdles and ensures that operations are resilient and adaptable to the changing legal frameworks around environmental conservation. By future-proofing their operations with sustainability at the core, businesses safeguard their growth and continuity against potential regulatory challenges, securing a competitive edge in an ever-greening economy.
5. Reaping financial benefits of going green
Vietnam's commitment to sustainable development, underlined by its National Green Growth Strategy for 2021-2030, has opened a gateway for e-commerce businesses to leverage financial incentives to foster green practices. The strategy, endorsed by Deputy Prime Minister Le Van Thanh, emphasises a transition towards a low-carbon economy and has attracted attention from international financial institutions and governments worldwide, including the European Union and the World Bank. These entities offer a variety of financial incentives, ranging from tax breaks and grants to rebates, particularly for investments in renewable energy, energy-efficient technologies, and electric vehicle adoption.
For Vietnamese e-commerce businesses, this represents an opportunity to mitigate the initial costs of transitioning to greener operations. By aligning with the country's environmental goals, businesses can contribute to reducing Vietnam's GHG emissions and tap into the economic viability of sustainable business practices and models. These incentives highlight the dual benefits of adopting eco-friendly practices: advancing environmental sustainability and enhancing economic performance.
