Information transparency is a foundation of carbon management, but more comprehensive reporting does not necessarily mean a more effective green transition. A study of Chinese firms raises an important question: in responding to CBAM requirements, how can businesses link information disclosure with investment in improvements and tangible emissions reductions?
1. CBAM links emissions data to trade requirements
The European Union’s Carbon Border Adjustment Mechanism (CBAM) aims to limit carbon leakage by applying a carbon cost to emissions embedded in certain imported goods. CBAM covers specified goods in six sectors: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Its definitive regime began on 1 January 2026.[2]
The obligations to submit CBAM declarations and purchase and surrender CBAM certificates rest with authorised CBAM declarants in the EU. Producers outside the EU provide emissions data to help their customers fulfil these obligations. The first deadline for submitting declarations and surrendering certificates for goods imported in 2026 is 30 September 2027. Where actual emissions data are used, they must be verified in accordance with CBAM requirements.[3]
In this context, the ability to provide reliable data and demonstrate emissions reductions is becoming increasingly important in supply relationships. Businesses need to connect reporting with production management and investment planning, using data to identify improvement opportunities and monitor results.
2. Disclosure increases, but green innovation lags behind
A study by Quan Yuan, Tiao Li, Tale Mi and Yipeng Jin, published in 2026 in the International Review of Economics and Finance, uses annual data from 4,193 Chinese listed firms over the period 2013–2024, comprising 29,996 observations. The authors compare changes between firms exposed to CBAM policy signals and a control group, using the policy announcement in late 2019 as the reference point for analysing firms’ responses.[1]
The results indicate that CBAM policy signals encourage exposed firms to increase their environmental disclosure relative to the control group.
Meanwhile, the green innovation indicator, measured as the share of green patent applications in total patent applications, shows a relative decline compared with the control group in the research model.
The authors describe this as “disclosure–innovation decoupling”. The findings suggest that businesses may prioritise immediate information requirements, while investment in innovation demands more resources, time and willingness to accept risk.
3. Why is there a gap between disclosure and green innovation?
The authors’ analysis suggests three mechanisms that help explain this gap.[1]
Financial constraints: Pressure to meet policy requirements and business risks may make financing more difficult, prompting firms to postpone innovation projects with long payback periods.
Precautionary cash holdings: Faced with uncertainty over costs and markets, firms tend to increase their cash reserves and become more cautious about long-term investments from which capital is difficult to recover when needed.
Competition for resources: Prioritising staff and funding for immediate requirements may reduce the resources available for research, development and long-term improvements. Businesses therefore need to balance resources to sustain both information disclosure and investment in innovation.
The study also finds that digital transformation may help narrow the gap between disclosure and green innovation by improving resource allocation. The practical implication is that businesses need to connect digital technology with process improvements and data management; investing in software alone does not guarantee emissions reductions.
4. Practical suggestions for Vietnamese businesses
The findings from China need to be considered in the Vietnamese context and in light of each business’s circumstances. They suggest several courses of action to connect data requirements with production improvements and emissions reduction.
Clarify requirements and coordination responsibilities
Businesses should review their products, commodity codes and relevant CBAM requirements, and agree with EU customers on the data to be provided, reporting periods, deadlines and contact persons. Clarifying these matters at the outset helps prevent omissions and reduces repeated revisions and requests for additional documentation.
Build reliable, traceable data
Data should be collected from records and actual measurements of fuel, electricity, material inputs, production output and other relevant parameters. Businesses should assign responsibility for recording and checking data, and establish procedures for retaining evidence and resolving discrepancies. Calculations must follow the CBAM methodology applicable to the product; general environmental or sustainability reports do not replace the data required under CBAM.[4]
Use data to select improvement measures
Reliable data help businesses identify production stages with high energy and material consumption and high emissions, and select measures to reduce losses, optimise operations or upgrade technology. Each measure should be assessed in terms of cost, expected benefits, implementation time and emissions reduction potential, with indicators to track results.
Balance short-term and long-term resources
CBAM response plans should allocate resources to data collection, calculations, coordination of verification and production improvements. Businesses can prioritise low-cost operational measures with clear benefits while maintaining an investment roadmap for long-term technology projects.
Link digitalisation to processes and data quality
Businesses can begin by standardising templates, assigning data update permissions and checking figures regularly, then progressively connecting measurement, production and management data as needed. Digital tools should reduce duplicate data entry, detect discrepancies and support decision-making.
Support environmental claims with evidence
When reporting emissions reductions, businesses should clearly state the scope, comparison period, calculation method and supporting data. They need to distinguish reductions in total emissions from reductions in emissions intensity per unit of output, so that the information accurately reflects the results achieved.
5. From information transparency to stronger management capabilities
The study highlights an important management issue: businesses need to balance resources between immediate requirements and long-term investment. Well-organised data can support explanations to customers, control of resource consumption and evaluation of improvement outcomes.
For Vietnamese businesses, a practical approach is to maintain a continuous cycle: collect reliable data, identify emissions reduction opportunities, implement improvements and verify results. Reporting can then become an integral part of production management and support investment decisions.
