The report titled “Vietnam Country Report: Macroeconomic, Socioeconomic, and Industry Analysis” provides an in-depth look at Vietnam’s economic and industrial landscape.
It is the first of a series that integrates insights from Cascale’s sustainability assessment tool, Higg Facility Environment Module (FEM), exclusively featured on Worldly.
An analysis of over 1,200 verified Higg FEM submissions from 2023 reveals a significant carbon footprint due to coal usage, with 12% of facilities directly using coal and 94% dependent on Vietnam’s coal-heavy electricity grid.
Despite this, renewable energy makes up less than 2% of energy consumption within the sector, presenting a substantial opportunity for transitioning to greener practices as outlined in the Industry Decarbonization Roadmap (IDR) by Cascale and Aii.
As per the report, Vietnam’s economic forecast shows a promising 6.5% growth rate by 2025, surpassing its regional counterparts.
The manufacturing industry remains a cornerstone of this growth, accounting for nearly 23.88% of GDP in 2023. Foreign Direct Investment (FDI) also reflects strong investor confidence, with $31.4bn recorded in the initial 11 months of 2024.
The apparel and footwear industry generates three million workers and was estimated to contribute $71bn in export revenues for Vietnam in 2024.
However, it also confronts serious sustainability issues, such as high energy use and carbon emissions.
Vietnam has pledged to enhance its renewable energy usage by 65-70% by 2045, aiming to cut greenhouse gas emissions by approximately 70-80%, demonstrating its commitment to supply chain decarbonisation aligned with the IDR.
The IDR ensures that resources are allocated effectively, enabling the realisation of low-carbon sourcing and additional advantages. This involves concentrating efforts on the critical 10% of sites within the textile and apparel supply chain, some of which are located in Vietnam, as these are responsible for more than 80% of the worldwide manufacturing emissions.
The report recommends prioritising the uptake of renewable energy and the implementation of circular economy practices.
It urges brands to cultivate enduring partnerships with their supply chain collaborators, which will promote fairness and catalyse reformative business methods. There is an emphasis on investing in the enhancement of employee skills, especially in areas related to sustainability and environmentally friendly technologies.
The report also recommended staying informed about changes in Vietnam’s regulatory landscape to guarantee adherence to regulations and to take advantage of emerging market prospects.
