Vietnam is a global trade powerhouse. Take 2024 as evidence. Last year, Vietnam’s apparel exports surged 42% in early 2024 – reaching $33 billion in January alone. Together with China and Bangladesh, Vietnam is a top three global exporter of apparel, footwear, and textiles. Yet, with new U.S. tariffs looming, the country faces a critical juncture: Will it prioritize short-term trade protection, or solidify its lasting role as a leader in sustainable manufacturing?
While the U.S. may turn inward on climate leadership, the rest of the world is moving forward to a greener future. Recent steep US tariff increases only redirected Chinese solar exports to other Southeast Asian countries, showing that climate solutions must indeed be global. Trade policies may shift, but the need for decarbonization and equitable labor practices is non-negotiable.
With great export potential comes the likelihood of an outsized emissions impact. Recent analysis from Cascale, a membership organization representing the textile, apparel and consumer goods industry, highlights a concentrated opportunity. Only a select number of manufacturing facilities – largely focused in nine countries, including Vietnam –account for 80 percent of the carbon emissions impact. This means targeted efforts in coal reduction, grid decarbonization, and biomass certification could transform Vietnam’s emissions profile — and set a global example.
And it’s already set in motion. Manufacturers in Vietnam are already doubling down on greener production. I’ve seen firsthand how Cascale Members like Vietnam Textile and Apparel Association (VITAS) are using their influence in this space to mobilize sustainability in the textile industry. And during my time at Nike, I worked closely with footwear manufacturers in Vietnam who demonstrated leading practices in decarbonization.
Now, let me share a few data soundbites. Per a 2024 data analysis of the Higg Facility Environmental Module – which is a widely-used industry tool for facility environmental assessment in the textile and footwear industry, Vietnam’s three largest energy sources were purchased electricity, coal, and uncertified biomass.
Regarding electricity, Vietnam's energy policy has undergone significant transformations in recent years – with policies shifting from largely coal-centric to renewable-minded by 2050. As part of the Paris Agreement, the country set out updated Nationally Determined Contributions to reduce methane emissions by 30 percent from 2020 levels by 2030 through the Global Methane Pledge and has joined the Global Coal to Clean Power Transition Statement. This complements the country’s ambition to become carbon neutral by 2050, and position it as a manufacturing hub of the future.
But it’s not simple.
Turning to the carbon emissions from burning coal, finding sustainable alternatives to coal is a challenge, as feasibility studies in Vietnam have shown. Biomass conversion or sourcing, for one, poses deforestation and environmental degradation risks. Electrification can pose legal and technological integration challenges. There’s also the obvious financing and upskilling demands for either to work. While it may not be as seamless of a transition, it’s essential to stay the course – which is why Vietnam is an example of bold-faced leadership.
The power of data, or rather insights, is what differentiates sustainability talk from action. While it’s crucial to stay informed in the face of an evolving geopolitical landscape, companies must consider long-term sustainability when planning their day-to-day operations. Sustainable business practices should not be sacrificed in favor of short-term protectionist measures.
True business resilience comes from long-term thinking and a commitment to sustainable operations. In this shifting landscape, Vietnam has the potential to surge into the role of a global leader in sustainable trade. This means investing in renewable energy projects, prioritizing sourcing from facilities that meet strict sustainability criteria, and collaborating with Vietnamese policymakers on grid decarbonization. Data management and measurement falls hand in hand with these efforts.
For companies, remember – sustainability is not a cost; it’s an investment in staying relevant in tomorrow’s marketplace.
Jeremy Lardeau is the Senior VP of the Higg Index at Cascale. As part of the leadership team, he oversees the strategic direction and development of the Higg Index suite of tools as well as Cascale’s impact programs. Jeremy is based in Barcelona, Spain. Before joining the Cascale team, Jeremy was Senior Director of Sustainability Analytics at Nike, Inc. where he led sustainability reporting, performance management, data products, and reporting. Prior to Nike, Jeremy was a manager with PricewaterhouseCoopers’ sustainability practice, successively working out of the Paris, Mexico City, and San Francisco offices.
