June 09, 2024 | 08:05 GMT+7

Vinatex Chairman: Institutionalization of practices needed for ESG and the circular economy

Vũ Khuê -

The garment and textile industry is viewed as a sector responsible for the largest proportion of emissions around the world, Vinatex Chairman tells VnEconomy seminar.

Speaking at a June 7 seminar held by VnEconomy / Vietnam Economic Times in collaboration with agencies from the Ministry of Natural Resources and Environment and with the theme “Pioneering Enterprises in Implementing ESG and the Circular Economy”, Chairman of the Vietnam National Textile and Garment Group (Vinatex), Mr. Le Tien Truong, spoke about his group’s efforts in green transition towards a sustainable economy.

Institutionalizing environmental, social, governance (ESG) practices and the circular economy in the garment and textile industry, with a specific roadmap and goals, has become necessary to help businesses promote green production.

Mr. Truong emphasized that it is also necessary to introduce policies to support and motivate enterprises through tools such as tax relief, better credit access, and land assistance.

He remarked that the garment and textile industry is seen as a sector in the world producing large levels of emissions. On average, it generates about 100 million tons of solid waste annually from discarded clothing. China generates 30 million tons of waste a year, while the US generates approximately 20 million tons.

The production of one standard textile product, from growing the cotton to the production process, consumes about 20 cu m of water, and it is estimated that the production of 100 billion textile products will use up 2 trillion cu m of water globally every year, he explained.

As a result, the sector has the most regulations and standards relating to the circular economy and the green economy of all industries globally.

To reduce carbon emissions, Vinatex has measured the carbon footprint in a product lifecycle and built a green and circular production strategy, according to Mr. Truong.

As a result, the amount of electricity used per product by its member companies has now fallen by 2 per cent compared to 2022.

The total amount of rooftop solar power installed by its member companies stands at over 17.1 million kW. The proportion of hazardous waste generated has come down by 84 per cent since 2022.

Vinatex has completed the construction of its Wastewater Treatment Plant No. 2, which meets national standards on environmental protection.

However, Mr. Truong noted that challenges remain in embracing ESG practices and the circular economy. The domestic legal framework is limited, while there are no specific policies or regulations on the circular economy, the green economy, or ESG practices for the garment and textile industry.

Regulations on greenhouse gas inventories and carbon taxes are being issued at a slower rate than the international application roadmap requires.

Meanwhile, the financial system for the development of the circular economy and the green economy remains at an early stage, with green and sustainable garment projects facing many difficulties in mobilizing financial sources.

There is also a shortage of incentives to promote the development of a circular and sustainable garment and textile industry.

Regarding resources and technology, he noted that investment in ESG and the circular economy is a long-term process, while small and medium-sized enterprises (SMEs) in the sector face many financial difficulties. Securing the human resources needed to apply technology and implement ESG practices and a circular economy is another challenge.

Business culture and habits also hinder the transformation process. Though there is a high level of awareness about consuming circular and sustainable products, product prices are considered a major barrier.

There are also limitations in the supply of green and sustainable materials for production. Prices of green materials are high, leading to green products being around 30 per cent more expensive that those using normal materials.

To deal with the challenges, Mr. Truong proposed providing specific guidance and technology transfer for businesses. It is also essential to increase cooperation in research and development (R&D) to master technology and encourage the development of green financial tools.

He also suggested building appropriate training programs to improve skills, in line with national planning on human resources, to serve the green and circular economies.

In particular, it is necessary to adopt solutions to promote the consumption of green products such as enhancing information dissemination and building a culture of consuming green and sustainable products.

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