Story: Xuan Loc
Photos: Xuan Loc, Shutterstock

As global fashion giants commit to greener and more sustainable production, Vietnamese textile businesses risk losing clients 

Vietnam is currently the second-largest garment exporter in the world, beaten only by China. Its export turnover reached 40 billion dollars in 2021. With over 6,000 manufacturers, the garment industry has created close to three million jobs, greatly contributing to the development of the local economy and society. However, these contributions are facing challenges, as Uniqlo, Zara, H&M, Puma, Nike, and hundreds of other global brands are pushing for a stronger commitment to sustainability and social responsibility, in order to satisfy consumers’ growing demands for green products. 

Although the country boasts high export turnovers, Vietnamese businesses mostly focus on made-to-order products for well-known global fashion brands. If those brands are committed to a cause, Vietnamese garment manufacturers will need to change their mode of production to keep purchases flowing in.

Green commitments 

During Uniqlo Vietnam’s Thank You Week event, which took place from the 10th to the 16th of June this year, the Japanese brand gifted every participant a special tote bag printed with a green Doraemon – their global ambassador for sustainable development. The bag was fashioned from 100% recycled polyester, equivalent to 2.5 used plastic bottles. The CO2 emission from producing this bag was only one-third of that from producing a regular plastic bag. 

This act spoke of Uniqlo’s commitment to making positive changes to Vietnamese society and showcased the sustainability goals of its parent company, Fast Retailing Co., Ltd. Fast Retailing has announced that it will focus more on the environmental impacts of its manufacturing, transportation, and distribution processes. To cut greenhouse gas emissions to a minimum, they will design a new manufacturing process with less environmental impact. With this new aim, the corporation will publicize all of their manufacturing partners and demand that they also comply with these environmental commitments. Vietnam is Fast Retailing’s second-largest manufacturer. The country houses 45 garment factories that partner with Uniqlo to fulfill domestic and international orders.

Also following a sustainable development strategy, H&M is taking a comprehensive look at its materials, designs, and manufacturing process to ensure that every product is as recyclable and reusable as possible. H&M works closely with Tier 1 manufacturers to help them build programs that let them use materials as efficiently as possible. The brand assists its partners in designing, building, and developing projects that use water and energy more efficiently; convert from fossil fuel to clean or sustainable energy; and better manage sewage and chemical wastes. In 2021, H&M owned 20 percent of the world’s manufacturing plants with solar array systems. The brand’s goal is to reach zero-carbon status by 2040 and reduce its greenhouse gas emissions to 56 percent by 2030. 

According to Mr. James Philips, President of TAL Apparel Vietnam, more than 250 fashion brands worldwide have released their standards and etiquette for environmental responsibility to their suppliers. These documents demand that suppliers’ manufacturing plants use energy and water efficiently; use eco-friendly materials; and have plans for social responsibility and environmental responsibility.

Vietnamese businesses’ primary concerns

As fashion brands around the world aim for “greener” and more eco-friendly production, the Vietnam Textile and Apparel Association (VITAS) is regularly organizing seminars about sustainable production to communicate new information to members and find more sustainable solutions.

According to Mr. Vu Duc Giang, Chairman of VITAS, most American, Japanese, European, and Chinese fashion brands are now implementing stricter standards for garment products. They ask that manufacturing partners use water sparingly, and they do not accept coal as fuel due to environmental concerns. 

These partners also demand that suppliers use green and recycled materials to meet consumer trends around the globe. If manufacturers wish to enter the global supply chain, they will have to restructure themselves for a more transparent manufacturing process to meet green development criteria. They must source materials from traceable points of origin as well.

Pushing toward a greener garment industry is not a new topic. Demands for “green” production processes have been put forward and fulfilled for years, but have become more pressing since the outbreak of the COVID-19 pandemic. In a notable recent development, at the COP26 conference, the Vietnamese Government committed to reaching a net-zero emission status by 2050. This has further incentivized the garment industry to push for greenification. 

To meet the requirement of fashion brands, manufacturers are investing in the restructuring of their assembly lines and their machinery, aiming to save more water and utilize solar energy. They are also looking for suppliers of green and recycled materials.

Mr. Nguyen Quyet Thang, Vice President of Agtex 28, revealed that, since 2021, Agtex 28 has amassed a huge budget to invest in human-replacement machinery, energy-saving equipment, and water circulation systems. For TCM, the company has complied with regulations regarding the environment, waste disposal, social and individual issues, and other topics. Recently, the company has installed and employed a solar array to save energy. 

“Green production is an inevitable trend that Vietnamese manufacturers must implement for sustainable development. In recent years, a lot of clients, especially American and European clients, have strict standards for this. If the supplier cannot meet their standards, there will be no deal,” said Mr. Tran Nhu Tung, President of TCM.

In reality, most suppliers for global industry giants have already implemented steps to meet “green” production requirements. These are critical criteria for gauging a business’s global competitiveness when it enters the global supply chain, so every manufacturer must adapt and comply. 

“Green garment manufacturers, or those with increasingly sustainable production processes, will be prioritized by VF for large and long-term orders,” said Ms. Tien Le, Senior Manager of Sustainable Operations at VF Corporation, which owns many worldwide fashion brands.

Switching to green production is particularly difficult for medium and small businesses, as it demands strong financial backing for new equipment, infrastructure, renewable energy, and human resources. These factors will considerably increase production costs, which will in turn reduce the competitiveness of Vietnam’s garment industry.