Lam Nguyen Hoang Thao, lawyer, Russin & Vecchi

This practice might attract eco-conscious customers who are willing to pay a premium for environmentally friendly products, thus providing businesses with a market advantage. In many countries, greenwashing is illegal and can result in severe penalties, loss of customer trust, and reputation damage.

Greenwashing scandals have shaken major corporations. In 2022, global fashion giant H&M faced a lawsuit in the US over its “Conscious Choice” collection, for misleading consumers with exaggerated sustainability claims that lacked credible evidence. Earlier this year, Clorox Australia was fined AUD8.25 million ($5.2 million) by the Australian Competition and Consumer Commission for falsely marketing its ocean-bound plastic recycled bags as eco-friendly, despite insufficient evidence.

Apple is also currently facing a lawsuit over its claim that two of its Apple Watch models are carbon-neutral. The claim is based on Apple’s contributions to afforestation projects in Kenya and China, which generate carbon credits to offset its emissions. However, serious doubts have been raised about whether these projects would have existed without Apple’s involvement. Even Singapore’s Changi Airport has been criticised for its “carbon-neutral” status linked to ineffective offset projects.

In Vietnam, where economic development must now align with environmental actions, these scandals should serve as a strong alert for Vietnamese businesses. They should take proactive steps to avoid such pitfalls.

To highlight their green efforts and commitment, businesses often label their products with consumer-appealing terms such as “eco-friendly”, “sustainable,”, “carbon-neutral,” or “net-zero”. These labels must be supported by proper evidence, otherwise, they risk becoming the basis for greenwashing. While Vietnam has yet to enact specific laws targeting greenwashing, existing regulations can serve as a foundation for legal actions against deceptive environmental claims.

Firms must be aware of these regulations to ensure compliance and avoid potential violations. Article 45 of the Competition Law 2018 bans unfair practices such as providing false or misleading information to attract customers. Violations can result in fines ranging $4,000-$8,000. The Vietnam Competition Commission enforces penalties for such competition offences.

Under the Law on Protection of Consumers’ Rights 2023, Article 21 mandates that companies provide accurate and complete details about product quality, utility, origin, and other attributes. Meanwhile, Article 10.1 prohibits deceiving or misleading consumers with false, incomplete, or inaccurate information about products or services. Overstating the environmental benefits of a product or service may be considered providing inaccurate information under this provision.

Articles 49 and 50 allow consumer protection associations to support consumers and report violations, and assist state agencies in addressing deceptive practices. Violations of these obligations are penalised with fines of $800-1,200, alongside a requirement to publicly retract the false claims. While current domestic penalties may seem modest compared to international fines, the reputational harm and corrective measures, such as forced public retractions or suspension of licences, can significantly impact businesses.

The Law on Advertisement 2012 also provides another layer of oversight. Article 8.9 prohibits advertising inaccurately about product quality, utility, or origin, as well as any claims that could cause confusion about a business’s capabilities, which can include misleading environmental claims. Violations carry fines of $2,400-3,200. Additional sanctions may include licence suspensions of 5-24 months, mandatory removal of deceptive advertisements, and public apology requirements. Finally, under the Commercial Law 2005, businesses are prohibited from engaging in deceptive practices. Article 109.7 bans false advertising about product attributes, and Article 123.5 forbids displaying goods that misrepresent their quality to mislead customers.

We can look at the international context on this issue. In Australia, the Australian Consumer Law regulates misleading or deceptive conduct and false representations about goods, with penalties reaching up to $31.47 million. In Europe, the 2024 Greenwashing Directive bans unverified eco-labels, exaggerated claims based on a single product or business aspect, and vague terms like green or sustainable unless supported by recognised standards. As for the United States, the FTC Act governs deceptive practices and environmental claims, with fines of up to $50,000 per violation.

As Vietnam undergoes an energy transition, businesses should take key steps to ensure their sustainability claims are credible. All environmental claims should be supported by solid evidence, such as verifiable data, third-party certifications, and comprehensive reports on carbon emission cuts, waste reduction, and more.

Transparency should be a priority. Firms should openly disclose both achievements and challenges in sustainability efforts, rather than making unverified carbon-neutral claims. If using carbon offsets, businesses should select carbon credits verified by highly reputable standards such as the Verra or GS, avoiding cheap but unreliable options. Companies should train their staff, especially marketing teams, to ensure that their marketing materials comply with international standards. The legal department should stay updated on new Vietnamese and international regulations, which will help businesses mitigate compliance risks and maintain credibility.

Greenwashing has become a serious legal and ethical issue with real consequences. To avoid risks, firms should ensure their sustainability claims are honest, clear, and backed by evidence. By learning from international lessons, we can turn sustainability into a true advantage while avoiding the costly pitfalls of greenwashing.

John Robert Cotton, senior programme manager Southeast Asia Energy Transition Partnership

As Vietnam moves towards piloting Emissions Trading System (ETS) from 2025, followed by full implementation in 2029 and eventual integration with international carbon markets in 2030, continued training and capacity-building efforts will be essential. Several strategies can be pursued to sustain its impact.

One of the most significant initiatives supporting this transition has been the ETS Training and Simulation Programme, implemented through the Southeast Asia Energy Transition Partnership (ETP) under the United Nations Office for Project Services (UNOPS). This has enhanced the capacity of key stakeholders, raising awareness and providing practical experience in emissions trading mechanisms.

At the forefront of Vietnam’s efforts to develop its carbon market is the Department of Climate Change under the Ministry of Agriculture and Environment. Responsible for designing climate change policies and overseeing carbon market development, the department plays a pivotal role in shaping the country’s climate action strategy.

The UNOPS and ETP are providing technical support and capacity-building initiatives to help Vietnam develop its carbon market and achieve its climate goals. This partnership is strengthening institutional readiness and aligning Vietnam’s framework with best practices.

An ETS operates on a cap-and-trade principle, where a limit is set on total emissions allowed from specific sectors or industries. Companies receive or purchase emission allowances, which they can trade with others depending on their emission levels. This market-based approach provides a financial incentive for industries to reduce their emissions in the most cost-effective way.

By setting a progressively declining cap, an ETS ensures a gradual reduction in emissions over time, supporting national climate goals. To date, more than 30 ETSs have been implemented worldwide, covering major economies such as the European Union, China, and South Korea. Vietnam is following a phased approach to developing its ETS, beginning with a pilot phase from 2025 to 2028, leading to full implementation in 2029 and international market integration by 2030.

The ETS Training and Simulation Programme in Vietnam has exceeded expectations in terms of reach and impact. Initially planned for four training sessions, the high demand and success of the early sessions led to an expansion to six sessions in Hanoi and Ho Chi Minh City in 2024. In total, 657 participants from various sectors engaged in the initiative. Over 80 per cent of attendees rated the training as highly beneficial, particularly valuing the interactive components and hands-on CarbonSim simulation exercises.

Through this training, participants gained essential skills and knowledge in understanding ETS principles, carbon pricing mechanisms, and emissions trading strategies. They also developed expertise in mastering key regulatory requirements for compliance with Vietnam’s forthcoming carbon market and learned how to participate in carbon trading, including cap setting, allowance allocation, and market transactions.

Furthermore, the training provided participants with strategic decision-making skills to optimise emissions reduction costs while ensuring regulatory compliance.

The programme played a crucial role in strengthening ETS readiness across various agencies, organisations, and businesses in Vietnam. Before the training, knowledge gaps existed among many stakeholders, particularly regarding market mechanisms and regulatory frameworks. Surveys conducted before and after training showed significant improvements in participants’ understanding.

Confidence in explaining carbon pricing increased considerably, and awareness of trading mechanisms, including auctions and over-the-counter markets, also improved significantly. The perception of ETS as essential for Vietnam’s climate goals grew stronger among participants.

A highlight of the training was the use of the CarbonSim tool, which allowed participants to engage in a realistic trading environment. These simulations effectively modelled core components such as cap setting, allowance allocation, trading mechanisms, and compliance requirements. The training helped stakeholders improve their understanding of the carbon market and ETS in both theoretical and practical aspects.

The programme successfully met its objectives of enhancing ETS literacy, strengthening institutional capacity, and preparing stakeholders for the upcoming carbon market. Increased recognition as a cost-effective emissions reduction tool was evident, and stronger confidence among stakeholders to navigate its compliance frameworks and trading strategies was observed.

Developing a network of trained professionals who can serve as future trainers will be instrumental in expanding the programme’s reach. Leveraging international partnerships and collaborating with established ETS markets will ensure that Vietnam remains aligned with global best practices. Encouraging government agencies to integrate such training into broader climate policy initiatives will further ensure long-term sustainability.