Embracing Sustainability: Vinatex’s Commitment to ESG and the Circular Economy

On June 7, at a seminar co-hosted by VnEconomy/Vietnam Economic Times and the Ministry of Natural Resources and Environment, Mr. Le Tien Truong, Chairman of the Vietnam National Textile and Garment Group (Vinatex), shared the company’s ambitious plans for a green transition towards a sustainable economy. His insights reflect a growing awareness and urgency within the garment and textile industry to adopt practices that not only foster economic growth but also protect our planet.

The Need for Institutional Change

Mr. Truong emphasized the necessity to institutionalize Environmental, Social, and Governance (ESG) practices and the circular economy within the garment and textile sector. A clearly defined roadmap and specific goals are essential for businesses to thrive in green production. The shift towards sustainability isn’t merely beneficial; it is becoming indispensable as global environmental concerns mount.

Policy Support for Sustainable Growth

To facilitate this transition, Mr. Truong advocated for supportive policies designed to encourage enterprises. He suggested implementing tools such as tax incentives, improved access to credit, and assistance with land procurement. These measures are crucial to motivate businesses to invest in sustainable practices, ensuring that the transformation is both effective and widespread.

Tackling Environmental Challenges

The garment and textile industry is one of the largest contributors to global waste, generating approximately 100 million tons of solid waste annually. With China alone accounting for 30 million tons and the U.S. contributing around 20 million, the magnitude of the issue is staggering. Furthermore, the production process for a single textile product consumes about 20 cubic meters of water, translating to an immense global demand of 2 trillion cubic meters for 100 billion products each year.

Commitment to Carbon Footprint Reduction

In response to these challenges, Vinatex has taken significant strides toward measuring and reducing carbon emissions through a comprehensive lifecycle assessment of its products. Mr. Truong reported that member companies have achieved a 2% reduction in electricity consumption per product since 2022. Notably, rooftop solar power installations within Vinatex reached over 17.1 million kilowatts, while hazardous waste generation has declined by an impressive 84%.

Infrastructure Developments

On the infrastructure front, Vinatex recently completed Wastewater Treatment Plant No. 2, which meets stringent national environmental standards. This step underscores the group’s commitment to responsible water management and pollution control, crucial components of sustainable operations.

Navigating Regulatory Challenges

Despite these advancements, Mr. Truong acknowledged that the journey toward fully embracing ESG practices and the circular economy remains fraught with challenges. The current legal framework in Vietnam offers limited guidance, and the absence of specific policies focused on the circular economy and ESG practices is a barrier to progress. Furthermore, the implementation of regulations concerning greenhouse gas inventories and carbon taxes is lagging behind international standards.

Financial Hurdles

The financial landscape also presents obstacles for sustainable development. Current systems for funding green projects are nascent, leaving many enterprises struggling to secure the necessary resources for implementing circular economy initiatives. This lack of financial support is particularly challenging for small and medium-sized enterprises (SMEs), which often face significant capital constraints.

Technological and Cultural Barriers

Investing in ESG and the circular economy requires a long-term commitment, and for many SMEs, financial difficulties can hinder this process. A skilled workforce is also necessary for applying advanced technology and practices, but a shortage of qualified professionals poses yet another challenge. Additionally, ingrained business habits and cultural norms impede transformation; while there is a high awareness of the benefits of sustainable products, their often higher prices deter consumers.

Addressing Material Supply Chain Issues

Another pressing concern is the availability of sustainable materials for production. Green materials tend to be costlier, typically around 30% more expensive than conventional options, which can deter manufacturers from adopting eco-friendly practices. This price disparity creates a significant hurdle in achieving a fully sustainable supply chain.

Recommendations for Progress

To navigate these multifaceted challenges, Mr. Truong proposed several actionable strategies. He called for specific guidance and technology transfer initiatives aimed at businesses to enhance their capacity for adopting sustainable practices. Increased cooperation in research and development (R&D) is vital for mastering the necessary technologies and creating effective green financial tools.

Promoting Green Consumption

An essential aspect of encouraging sustainability lies in fostering a culture of green consumption. Mr. Truong highlighted the need for awareness campaigns to inform consumers about the importance of choosing sustainable products. Building this culture will not only benefit manufacturers but will also contribute significantly to environmental conservation.

By addressing these elements, Vinatex aims to lead the garment and textile industry toward a more sustainable future, demonstrating that economic growth and environmental responsibility can coexist harmoniously.