Navigating the Green Transformation in Vietnam’s Electronics Sector

Amid complex global geopolitical tensions, including trade disputes and regional conflicts, the global supply chain is undergoing significant disruption. Vietnam, recognized as a key electronics manufacturing hub, is not exempt from these challenges. To sustain their pivotal role in the global supply chain, Vietnamese electronics companies must pursue a green transformation that encompasses innovative production models, the adoption of energy-saving technologies, and the establishment of transparent environmental, social, and governance (ESG) management systems.

Pressure from Green Shift

At a recent seminar titled “Electronics transformation under geopolitical pressure: Developing green and sustainable supply chains,” organized by the Vietnam Electronic Industries Association (VEIA), Vinexad, and Green In, industry leaders highlighted the pressing need for adherence to international green standards. Ms. Do Thi Thuy Huong, Vice President of the Vietnam Association of Supporting Industries (VASI), emphasized that major export markets—such as the EU, the US, and Japan—are tightening their green regulations. Key legislative frameworks, including the EU’s Carbon Border Adjustment Mechanism (CBAM) and the net-zero commitments of global giants like Apple, Samsung, and Intel, underscore the urgency for Vietnamese companies to innovate.

Without a committed approach to green transformation, Ms. Huong cautioned that Vietnamese electronics firms may find themselves sidelined in the global marketplace. Companies must act swiftly to evolve their production models, integrating energy-saving technologies and building transparent ESG management systems to maintain competitiveness.

Increasingly Stringent International Standards

Ms. Nguy Thi Giang, Chairwoman and CEO of Green In, further elaborated on the challenges posed by escalating international green standards. For instance, the Electronic Product Environmental Assessment Tool (EPEAT), managed by the Global Electronics Council, applies globally across various electronic products. It encourages manufacturers to minimize greenhouse gas emissions, design energy-efficient products, and improve recycling practices.

Moreover, Vietnamese products exported to Europe must adhere to the Restriction of Hazardous Substances (RoHS) standards, which mitigate toxic chemical pollution and safeguard worker health. The EU’s Waste Electrical and Electronic Equipment (WEEE) directive aims to decrease electronic waste through reuse and recycling initiatives, while European standards ensure products meet stringent quality, safety, and eco-design benchmarks.

A noteworthy upcoming requirement is the Digital Product Passport (DPP), mandated under the EU’s Ecodesign for Sustainable Products Regulation (ESPR). Between 2026 and 2030, many products, including electronics, sold within the EU must carry a DPP that allows for comprehensive traceability.

Domestic Government Signals

The Vietnamese government is signaling that green transformation is becoming the “new rules of the game” in global trade. Economic growth must align with sustainable practices, focusing on circular economy principles, resource efficiency, emission reductions, and environmental protection. This evolving landscape creates strong incentives for companies to invest in research and development (R&D)—an essential component of sustainable transformation.

Driven by Tech Giants

Vietnamese electronics companies can look to successful international models of green transformation for inspiration. For instance, Samsung Electronics has committed to achieving net-zero emissions across its operations by 2050, with an ambitious target of reaching this goal by 2030 for its Device eXperience Division, which includes consumer electronics.

To meet these goals, Samsung is making a phased transition to renewable energy and implementing programs aimed at reducing emissions throughout its operations. The company’s commitment to a circular economy is illustrated through its recycling initiatives and the publication of annual sustainability reports.

Sony has developed its global “Road to Zero” plan, which aims for a zero environmental footprint by 2050. This approach breaks down initiatives into four environmental dimensions and six lifecycle stages, ensuring transparent progress updates.

Similarly, companies like Panasonic are setting ambitious targets, such as achieving a 300-million-ton reduction in cumulative CO₂ emissions by 2050. Panasonic’s strategy encompasses everything from its own operations to societal impact through innovative technologies.

With goals of deep emission reductions across its product lifecycle, Apple is also leading the charge by building a supplier network powered by renewable energy and enhancing the use of recycled materials.

Intel’s “People-Sustainability-Technology” framework integrates emission reductions, sustainable water use, and enhanced product energy efficiency. Dell’s roadmap emphasizes pillars like driving sustainability and fostering inclusion, underscoring the importance of measurement systems and regular reporting.

Key Steps Towards Transformation

As Vietnamese electronics firms pursue green transformation, they encounter several challenges. Currently, a staggering 95% of the sector’s export value stems from foreign direct investment (FDI), leaving domestic content at a mere 5-10%. Of the 2,000 companies in the electronics sector, a majority are small and medium-sized enterprises focusing on achieving compliance with international standards.

To navigate this transformation effectively, Dr. Bui Thanh Minh from the Office of the Research and Development Board for the Private Economic Sector (Board IV) outlines three essential recommendations.

First, companies must develop comprehensive systems for emissions tracking and carbon management. This includes setting reduction targets and implementing regular monitoring across all scopes of greenhouse gas emissions.

Second, the adoption of green technology and renewable energy must focus on maximizing efficiency. Companies should aim to replace high-energy equipment with higher-efficiency alternatives, optimize production processes, electrify operations when feasible, and invest in waste treatment solutions, especially for electronic waste.

Lastly, a step toward digital transformation is crucial for enhancing transparency and traceability within operations. Companies should digitize processes through the integration of enterprise resource planning (ERP) and manufacturing execution systems (MES), alongside utilizing big data analytics for real-time monitoring of resources and emissions.

Financing Challenges

However, despite these clear pathways for transformation, financing remains a significant hurdle. Dr. Minh emphasizes the necessity for green credit policies, tax incentives, and technical support aimed at enabling small and medium-sized enterprises to participate sustainably in the global supply chain.

In an era defined by heightened environmental standards and geopolitical pressures, the future of Vietnam’s electronics industry hinges on its ability to adapt and innovate. As companies harness green technologies and practices, they not only enhance their competitiveness but contribute to a more sustainable global supply chain.