The Climate Business Index (CBI) is an innovative joint initiative of Viet Nam Ministry of Planning and Investment and UNDP Viet Nam, to support the implementation of Viet Nam’s Nationally Determined Contribution (NDC). The Climate Business Index provides a platform for companies to collaborate, log their contribution to reduce greenhouse gas emissions and address climate change impacts by bridging the gap between the government’s NDC stock-take process and corporate sustainability reporting. The platform has inspired a number of special initiatives, including on green micro-mobility and plastics.
Viet Nam has an urgent need to mobilize resources while ensuring that both public and private sectors maintain the ambition and capacity to implement accelerated climate action at scale. However, the lack of transparency and climate-related data from companies has discouraged investments not only from governments but also from private investors in climate-friendly projects. As Viet Nam faces pressure to address emissions and rising climate impacts, companies need to better understand climate change and its implications on their businesses to serve both themselves and the nation towards sustainable development goals.
What does CBI do?
- Companies can take a self-test and figure out what action needs to be taken in the future.
- Climate Smart Operations - Check if your company’s operation aspects are responsive to climate change?
- Climate Smart Products - Check if your company’s products and services contribute to climate change adaptation?
- Companies can promote their climate smart activities or products and attract investment
- Enjoy a long-term partnership with UNDP and contribute to Vietnam’s climate change goals
- Companies do more voluntary climate change actions and helps establish preventive actions to reduce the impact of climate change.
- Government identify private sector’s voluntary activities and achieve the national climate change target with private sector action.
- Investors understand the status of Vietnamese companies in response to climate change.
How does it work?
CBI, which is run by UNDP Vietnam, is a voluntary platform with an awards-based incentive comprising three levels of achievement (Climate Aware Company, Climate Action Takers and Climate Leader). Companies register at the CBI free of charge. Their climate commitments are then evaluated based on the three-level assessment framework to determine the level of achievement.
All sectors, levels and sizes of companies doing business in Viet Nam and desire to improve their capacity of climate change mitigation and adaptation
• Small and Medium Enterprise
• Big company
• Multi-national company
A manual was developed to guide companies with the application process.
Bridging a critical gap - the role of the NDC Support Programme
The Climate Business Index, an innovative joint initiative between the Ministry of Planning and Investment and UNDP Viet Nam, has been developed under the UNDP’s NDC Support Programme. One of the NDC Support Programme’s contributions has been to establish a private sector platform to promote technology transfer and track contributions to Viet Nam’s climate targets and the Sustainable Development Goals (SDGs). The Climate Business Index is developed to meet this objective since corporate sustainability reporting has not been widely practiced in Viet Nam and there has been very limited climate-related performance data reported by companies. To build capacity of companies’ climate-related reporting and address the lack of data from the private sector, the CBI fills a critical gap between the government’s NDC stock-take process and the corporate sustainability reporting programs, in terms of information needs, features of their approaches, and challenges of each type of reporting.
In practice, the NDC Support Programme has supported the development of the CBI website as a platform where companies can conveniently share their environmentally friendly practices and climate actions. The support has also enabled CBI to partner with the Viet Nam Chamber of Commerce and Industry (VCCI), a national organization which assembles and represents the private sector. The partnership has strengthened CBI’s networks with the business community through participation of networking events organized by VCCI.
The CBI was launched on 26th of June 2020 and despite the ongoing pandemic, CBI has achieved critical milestones and inspired new projects. The CBI has piqued the interest of many stakeholders such as enterprises, investors, and government agencies. Around 220 companies operating in sectors as diverse as agriculture, wholesales, construction, and energy are participating in the initiative to date, and the CBI will continue moving forward to benchmark and log companies’ contributions to address climate change, highlight good practices, speed up technology transfer, and leverage and upscale private investment by 2021.
Activities and Milestones of the CBI
Since its launch in June 2020, the CBI has inspired a number of new initiatives and activities.
1. Creating public-private partnership: Green E-Transportation Initiative
The CBI spurred a new project: the Green E-Transportation Initiative, a public-private project on e-mobility, was launched in September 2020. It promotes green technology and is fully funded by MBI Motors, a private e-mobility company (maximum USD 3 million for pilot testing and around USD 25,000 for the activities of UNDP). To date, this initiative has led UNDP to attract private investment of approximately USD 700,000 in e-mobility in Vietnam. As of December 2020, the pilot had recorded more than 4,792 users that have taken 26,217 trips on the e-bikes, with over 81,990 kilometers of total travel distance. The participants have been giving positive feedback about the services. In total, the pilot scheme has already saved approximately 5,115 kg of CO2.
During the pilot testing, UNDP ran a campaign with the aim to raise awareness about the important role of green transportation for addressing climate change and air quality issues in Viet Nam. The campaign via Facebook CBI's fan page was successful with a total reach of more than 120,000 and total reactions of more than 2,000. The Tiktok challenge on the UNDP Viet Nam Climate Change and Environment Unit account resulted in 10,300 views. The campaign’s online survey received more than 1,200 responses – an analysis will be included in the final report with support from UNDP Global Singapore center’s e-mobility experts. Next steps for 2021 include growing partnerships with the aim to expand the Green E-Transportation initiative to multiple locations. In addition, UNDP is engaging in further discussions with various Universities and Industrial Zones in Ha Noi to participate in the initiative.
2. Creating public-private partnership: Plastic and waste management
The CBI - in cooperation with the UNDP Global Environment Facility (GEF) Green chemistry experts - provided a training for agro-business companies on how to convert plastic containers into eco-friendly containers and recycle them. After the training, the CBI plans to further develop a demonstration initiative related to the recycling of plastic containers in 2021 based on joint private funding with agro-business companies.
3. Introducing new financing options to green businesses
The CBI, together with the Asian Development Bank and a UNDP regional program, the Climate Finance Network, organized a regional webinar on green bonds in September 2020. This was UNDP Viet Nam’s first activity on green bonds and attracted more than 300 participants from 14 countries. Participants included not only CBI companies, but also representatives from key government ministries such as the Ministry of Planning and Investment, the Ministry of Finance, and State Bank of Vietnam, local governments, and major companies such as the Vin group. The event was a great opportunity to introduce new green financing options to key stakeholders and CBI companies, and further discussions with potential issuers are being continued.
4. Connecting green business with investors, donors or supply chains
The CBI also enhances companies’ connections with investors. The CBI is currently working to establish a long-term partnership with two different types of investors: one is venture capital (Smilegate), the other one is social impact investors (Tundra Fonders). In the second quarter of 2021, CBI will share the list of participating companies with the investors as to foster a connection between them.
CBI supports companies’ capacity building also through a financial support partnership scheme by connecting companies with UNDP’s other support programs. For example, CBI linked AYA Cup with UNDP’s regional Ending Plastic Pollution Challenge (EPPIC). Aya Cup is now one of the finalists of the program. In addition, CBI is connecting three of its ecofriendly companies with a big domestic retail platform, BIG C, to provide their ecofriendly products to the supply chain.
Insights and lessons learned
The CBI has piqued the interest of many stakeholders such as enterprises, investors, and government agencies. Around 220 companies operating in sectors as diverse as agriculture, wholesales, construction, and energy are participating in the initiative to date, and the CBI will continue moving forward to benchmark and log companies’ contributions to address climate change, highlight good practices, speed up technology transfer, and leverage and upscale private investment by 2021.
The COVID-19 pandemic, which has been causing considerable difficulties for enterprises in Viet Nam over the past few months, has created both challenges and opportunities for the project. The pandemic has made it more difficult in getting companies to participate to the CBI since the major concern has been about health rather than environment and climate change. The CBI is, however, well-placed to promote a green recovery. Thanks to a strategy comprising promotion through social media channels, direct outreach to companies and networking events, the number of companies signing up to participate in CBI has been on a steady rise. The CBI is now looking for additional funding to further upscale its activities for 2021.
- Promotion: The CBI is actively promoting the project with the plan to reach 300 registered companies focusing more on mid and large size companies by the end of quarter I 2021
- Implementation of support programms: the CBI is going to conducting support programmes (a training scheme and an access-to-finance scheme by connecting companies with investors), and creating/expanding further public-private initiatives.
- The CBI will establish long-term partnerships with investors and connect them with companies participating to CBI during the second quarter of 2021
- During the first quarter, CBI will expand partnerships with an aim to expand its sub-initiative, the Green E-Transportation to multiple locations.
- Share the results of CBI: In Q1-Q2 2021, annual results will be analyzed and shared with the government and the public, and a ceremony will be held to provide green badge certificates to successful companies.
- Attracting further investment: The CBI initiative, which is getting very much attention by the Vietnamese government, hopes to be implemented in 2021, and is looking for additional funding options for this. In addition, CBI is also seeking funding to develop permanent mechanisms to support green recovery and public-private partnerships in the long run.
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