Green transformation – the ‘ticket’ for businesses to participate in the global supply chain

ESG is becoming a mandatory condition for businesses to participate in the global supply chain, in the context of export markets continuously tightening green standards.

This message was shared at the conference “ESG – Green production transformation trend: Seizing opportunities to improve competitiveness and attract investment in Gia Lai” organized by Gia Lai Provincial People’s Committee in coordination with Becamex Binh Dinh Joint Stock Company on June 26. The event attracted more than 120 business representatives, domestic and foreign investors and diplomatic agencies.

According to experts, the global business landscape is changing rapidly as ESG gradually becomes a mandatory standard. From regulations on the Carbon Border Adjustment Mechanism (CBAM) of the European Union (EU) to supply chain transparency requirements from multinational corporations, the pressure to green production is directly impacting the competitiveness of Vietnamese businesses.

Domestically, the Government has issued the National Program to promote sustainable business practices for the period 2026-2030, aiming to support about 25,000 businesses, business households and cooperatives to apply circular economy models, inclusive business models and ESG frameworks. This shows that green transformation is no longer an option but becomes a condition for sustainable development.

Mr. Nguyen Thanh Long, General Director of Houselink Joint Stock Company, commented that green transformation is a common trend in the world. Many major export markets continuously raise environmental standards for imported goods, in which Europe has applied a carbon fee mechanism for some product groups such as steel, aluminum, cement and fertilizer.

According to Mr. Long, when integrating into the global playing field, ESG is no longer an incentive but has become a mandatory condition. Customers ask for ESG not to beautify their profile but to keep orders. A factory that cannot prove that it is “green” and has transparent data will have its prices forced, evaluation time extended, and even lose orders to competitors.

According to him, Vietnam has gradually improved regulations related to ESG and many businesses have begun to incorporate these criteria into their development strategies. “However, many small and medium-sized enterprises still consider ESG as ‘a shirt that is too large and expensive’ compared to their current resources,” Mr. Long said.

From the perspective of international investors, Ms. Nguyen Mai Hanh, Senior Foreign Affairs Manager in Vietnam of Syre Impact AB – a Swedish fabric recycling group that is promoting a billion USD fabric recycling project in Gia Lai, believes that ESG is an irreversible trend.

According to her, international fashion brands now require suppliers to have complete records and data proving ESG compliance. This forces businesses to proactively build data systems from the beginning, especially in the field of recycled fibers.

Ms. Hanh said that the polyester fiber production industry currently accounts for about 30-40% of the carbon emissions of the entire textile value chain, while recycled fibers only account for less than 1% of the global market. With the polyester market size expected to exceed 120 billion USD by 2032, Syre chose to develop polyester recycling technology to create a circular supply of raw materials and reduce emissions.

However, businesses also face many difficulties from research costs, raw material collection to incentive mechanisms.

“This is not the story of a single business but the story of the entire ecosystem. We both develop technology and prove to the community that recycling businesses are treating waste and not creating more pressure on the environment,” she said.

From actual implementation, Ms. Hanh believes that businesses can start ESG with simple things such as power management, waste management, and environmental data storage. After implementing the environmental factor well, it continues to expand to social and governance criteria.

Professor Nguyen Hong Quan, Director of the Circular Economy Development Research Institute (Ho Chi Minh City National University), suggested that businesses first need to change their perspective: ESG is not a cost but an investment, which will be profitable over time and should start with environmental factors and then gradually standardize the remaining factors.

According to Professor Quan, one of the current bottlenecks is the lack of linkage in policy implementation, making it difficult to apply the circular economy model at the local level. Along with that, hardware infrastructure and digital infrastructure – the foundation for the circular economy – are still issues that need investment attention.

Meanwhile, Ms. Tran Ngoc Diep, Southeast Asia Sustainable Development Project Manager of Bureau Veritas Consumer Products Service Vietnam, said that businesses should not wait to build a complete data set to start ESG.

According to her, businesses can immediately use available internal data and prioritize key indicators for each industry. With textiles, it is the water source, raw materials and fabric materials; Electronics need to focus on energy consumption and hazardous waste. Correctly identifying important indicators will help businesses control data effectively as ESG requirements become increasingly strict.

Mr. Nguyen Huu Que, Vice Chairman of Gia Lai Provincial People’s Committee, acknowledged that ESG is an urgent issue for the Gia Lai business community. “The most appropriate approach is not to follow the trend of ESG, not to deal with it, but to start with specific things, appropriate to the industry scale and capacity of each business. The workshop provided important information for the province’s businesses to receive,” he said.

Mr. Que pledged that the province will continue to improve infrastructure, improve the investment environment, promote digital transformation, support connecting experts, investors, financial institutions, consulting units, and propose to the Central Government appropriate mechanisms to support businesses in the green transformation process.

At the same time, the province also wants business associations, international organizations, research institutes, consulting units, and pioneering businesses such as Becamex VSIP Binh Dinh, Houselink, Glassdome, CNG Vietnam, Syre and partners to continue accompanying Gia Lai in building green production ecosystems, green industrial parks, circular supply chains and replicable ESG models.

The highlight of the program is the signing ceremony of a memorandum of cooperation between Becamex Binh Dinh and CNG Vietnam Joint Stock Company to develop clean energy solutions at Becamex VSIP Binh Dinh.

The organizing committee hopes that the conference will help Gia Lai businesses gradually approach ESG standards, promote green transformation and increase competitive advantage in the context that sustainable development requirements are increasingly becoming important criteria of global investment and trade flows.