How apparel sector in Vietnam promoting ‘business sustainability’ concept

by Apparel Resources

07-May-2018  |  18 mins read

The 2030 agenda will focus on action for people, planet and prosperity

The whole world talks about sustainability and sustainable business today. So, what is sustainability? It is to, put it simply, the point where 3 major business elements – people, environment and economy – meet. Some others define sustainability through the concept of the Triple Bottom Line – people, planet and profit.

One of the major prerequisites to run any successful business is to create an environment that breeds innovative business solutions – solutions that are not only commercially feasible but are also consistently addressing environmental and social concerns. Yes, this is sustainable business. This is what every organization across the globe today strives for – ensuring all their products and processes address environmental issues while at the same time generating profit.

Cameron Sinclair, Head of Social Innovation, who also leads the humanitarian work at Airbnb, had once remarked, “When sustainability is viewed as being a matter of survival for your business, I believe you can create massive change.” Vietnam understood this much earlier.

Social sustainability

Social sustainability initiatives include compliance, safety of workers among others. Compliance is more of a norm; in fact, it actually means conforming to a particular standard. The strong emergence of Bangladesh garment sector especially in terms of having maximum green factories has proved to be a role model for many countries and Vietnam too is now treading on the right path. Isn’t it commendable that the top three green garment and textile factories in the world are today located in Bangladesh? What makes it more worthy is the way the country has managed to achieve this after the Rana Plaza disaster.

Almost every factory in Vietnam today ensures the welfare of garment employees. As Apparel Resources had discussed in some of its previous issues, the salary of the garment workers in Vietnam increased to even 3 times few years back and, significantly, in one of the years, the increase was an astounding 40 per cent. This is also the reason one would hardly find strikes and rallies in Vietnam.

Lately one has been witnessing a gradual shift towards corporate social responsibility (CSR). Most of the companies have been striving to teach workers about health and safety in addition to other activities like providing education to employees and doing charity for orphanages and physically challenged people. Epic Designers Vietnam Ltd. and Fashion Garments 2 Co.Ltd. are two such companies focusing on all-round development of their employees to enhance a better working environment. Though social sustainability does play an important role in enhancing the image of a company in addition to providing employee satisfaction, it is the other 2 elements – environment and economy – that are being talked about much these days.

Environmental sustainability

Government committed to sustainable business…

In its bid to make Vietnam’s 2030 Agenda for Sustainable Development a success, the Government of Vietnam recently announced a plan that features 17 targets alongside 115 specific goals. The Ministry of Planning and Investment announced that these goals will, in all probability, be executed in two phases: 2017-2020 and 2021-2030.

According to Deputy Prime Minister Vu Duc, the action plan illustrates the Government’s commitment to develop economics in line with protecting the environment, with continual focus on distinguished groups amongst other factors.

In its objective to focus on having a non-toxic environment, the Government has also been actively making legislations to promote a better environment and better health. New regulations regarding formaldehyde and azo dye usage in textile manufacturing were recently released by the Vietnamese Ministry of Industry and Trade. These regulations feature specified limits for the permitted levels of both substances in any goods manufactured or sold in Vietnam and will be enforced from May 2018, meaning manufacturers have until then to ensure that all their textile products are compliant.

It is noteworthy that in 2016, the Government abandoned plans to build two multi-billion dollar nuclear power plants with Russia and Japan. Environmental campaign group Greenpeace, however, welcomed the decision to drop the nuclear plan, saying it would have been a waste of money when renewable energy alternatives are available. Not many countries have had the courage for taking such a decision.
This also means that huge requirement for power comes from green energy. Government of Vietnam is supporting green energy in a big way and is also providing incentives to companies who are working towards promoting sustainability.

Nguyen Thi Tuyet Mai, Deputy Secretary General, VITAS is happy that companies in Vietnam are now aware about the environment and corporate social responsibility (CSR). “The new generation is committed to being responsible towards the environment and this is now reflected in the business that they are doing,” averred Mai.

Brands adopt ‘sustainable approach’ to enhance reputation

Many fast fashion brands prefer to work closely with factories to ensure every product and process remains sustainable. People like getting associated with brands that consciously do something about the environment. More than 50 well-known brand names, such as Giordano, Mango, Zara, Topshop, Gap and Old Navy, have opened stores in Ho Chi Minh City and for all of them, sustainability means business.

Everlane, one of the leading online clothing retailers, has joined hands with Saitex factory wherein denim by-product is turned into bricks and polluted water is filtered. Everlane has been known for its transparency in pricing and manufacturing processes. Brands like Levi’s have been trying to find ways to make their supply chain less polluting by equipping factories with better technology. Everlane, which is relatively small by comparison, had less power to force a factory to alter its existing practices to become more sustainable – they got their answer in Sai-Tex.

“In 2016, Eddie Bauer signed Responsible Wool Standard (RWS), which is actually a set of standards that apply to the conditions and care of animals raised for wool fibre, including merino and cashmere,” said Vince Vu, Regional Country Manager, Eddie Bauer, Vietnam, while explaining the brand’s commitment to animal welfare. The company is also Responsible Down Standard certified (RDS-certified) – an independent standard to ensure humane treatment of the waterfowl providing down and feathers for apparel and home products.

Contribution of buying offices towards sustainability is unparalleled…

Sustainability is today as integral a part of the apparel sector, in particular, as compliance – interestingly the manufacturing companies, buying offices as well as the customers are all on the same page. The buying offices have also been pro-active in ensuring that ‘sustainability’ is an essential component in every company’s business plan. “Every factory or laundry is having jeanologia machines. They are investing in laser and ozone and are very much aware of the technology. Also, customers too are asking for it,” said Anil Mishra, Country Manager, Asmara – Vietnam. Ever since its inception in Vietnam in 2008, Asmara Vietnam has today become one of the leading buying houses in Vietnam.

Many companies have now resorted to centralizing printing services, sending and receiving documents electronically as well as double-sided copying so as to reduce the usage of paper and save money. Melcosa Vietnam Ltd. has taken up ‘saving paper’ as one of the major sustainability initiatives. With the help of its technical team, the company has decided to provide its employees with big screen computers so that multiple files can be opened on a single screen thereby killing the option of taking printouts. “By 2018, we plan to reduce the usage of papers by 50 per cent. At the moment, we have achieved 10 per cent. Also, people normally go to meetings with lots of papers, so there has been suggestion to use portable projectors that can be connected to the system and as a result everything can be displayed on the screen – saving paper and time,” explained Upul Seneviratne, Merchandise Manager, Garment Department, Melcosa Vietnam Ltd. Established in 1991, Melcosa is the first foreign sourcing office in Vietnam.

Audit and inspection agencies accelerating the pace of sustainable development

The efforts put by audit and inspection agencies to promote sustainability cannot be overlooked by any standards. Beyond the immediate effects of its products and services, Bureau Veritas has been consistently striving to improve its approach especially with regard to covering environmental impact and relationships with customers, employees and suppliers. What has made it stand out is its commitment to continue implementing internally the best practices that it preaches externally.

Substantiating the above, William Nguyen, Business Development Executive, IAAS, Inspection, Audit & Assessment Solutions, Bureau Veritas Consumer Products Services, remarked, “Bureau Veritas Corporation has significant impact on sustainability in Vietnam. Since buyers are more and more concerned about the Quality, Health, Safety and Environment perspectives, they enforce and educate suppliers in here to comply with those standards which are controlled by third parties like Bureau Veritas. Bureau Veritas enhances transparency with its expertise and experience in almost every industry and is helping firms to change their old mindset and obsolete practices with best practices and new standards, stimulating better performance for suppliers, creating a safe and efficient working environment, influencing almost all stakeholders towards a more sustainable direction not only in Vietnam but also in every country it is present.”

Sustainability is today a part of every garment company’s growth

“Sustainability is as important as compliance. It is a norm for us,” said Manoj Yasarathne, Merchandising Manager, Comtextile (H.K) Ltd. In fact, this is true for many garment establishments in Vietnam.

Several companies are taking initiatives to invest on sustainability and in this regard, many companies are now coming up with the ‘Green’ initiative. Le & Le Garment and Washing is one such company that uses green machines. The company has been successfully using environment-friendly chemicals so that there is no harm to the health of its employees – its innovative approach has taken the company into the list of top 10 companies in Vietnam in less than 2 years.

Coats Vietnam, one of the pioneers among thread suppliers, invested in biomass boilers, which means that depleting resources like fuel oil or coal are not burnt – instead rice husk is burnt. The heat recovery saves the heat and then the smoke with particles, is filtered out before it goes in the air. “Additionally, we have taken other initiatives like expanding effluent treatment so that in 2 years, 90 per cent of water is recycled and invested in solar power to supplement power for manufacturing,” further added Bill Watson, MD, Coats Phong Phu.

Over the recent years, quite a few companies have started using 100 per cent recycled polyester yarn. This technology has nominal waste, consumes very little energy and, importantly, causes not much pollution. In short, it is environment-friendly.

Wunderlabel, manufacturer of customized woven labels, printed labels, hand tags, stickers, is one of the companies which plans to use fully recycled polyester yarn. Corroborating on his company’s approach, Philip Linde, Director, Wunderlabel said, “Our approach with new technology and quality control measures together with high quality recycled polyester yarns make us different.”

There has also been increasing talk about sustainable water management that includes reducing water wastage, eliminating the use of chemicals and potentially re-using grey water. Hana Tran, Marketing Manager, Theseus Corporation remarked, “Our chemical wastage is reducing the water consumption and we also have our own wastewater treatment.” Theseus is one of the growing thread suppliers in Vietnam. The efforts put in by several garment manufacturing companies are no short of being considered remarkable.

Economic sustainability

So, while social and environment sustainability have been on top of the agenda for many of the garment and textile establishments in Vietnam, an important aspect that needs to be addressed is its economic viability. Are these initiatives and efforts economically sustainable?

Toray International, Japan-based manufacturer in Vietnam, has been spending extensively on sustainable practices. Further elucidating on this, Shigeru Wakabayashi, President, Toray International Limited, averred, “Costing is higher but Toray is a big company and for us CSR and working for environment is important and we will continue doing it despite high cost.” What companies today need in Vietnam is such an attitude.

Echoing the same thoughts, Kent Teh, Director of Garment Manufacturing, Esquel Garment Manufacturing (Vietnam) Co. Ltd., said, “At times it’s not economically sustainable yet in long run it pays. Our customers appreciate it and nowadays they are conscious of the products they buy.” The companies need to ensure that the people who are making products are taken care of and the environment they are working in is also taken care of. A good care of people and planet will eventually bring profit. It’s as simple as that. Esquel Group is a vertically integrated company with over 12,000 employees in Vietnam.

Namyang Sourcing Co. Ltd has also been leaving no stone unturned in spending on the welfare of people and environment. The company has ensured that their new units are fully furnished with LEDs and additionally it has got lots of trees planted inside the company campus. “At times, we may not get the expected returns, but then we need to give something back to the environment and the nation,” remarked Raja Prabu, Senior Marketing Merchandising Manager, Namyang Sourcing Co. Ltd.

The bottomline is that both people and planet need to be conserved and long-term costs for utilizing these resources intelligently and efficiently should be a part of all economic calculations of the company.

Of late, there is a growing trend among apparel companies and buying houses across the world to adopt supply chain sustainability and the brand too is committed to this cause. With the Government of Vietnam too taking initiatives, ‘business sustainability’ is the new corporate buzzword.

It’s the beginning of a new age!

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