Difficult journey to green transition
Given its current economic capacity, the green transition seems like an ambitious goal for Vietnam. However, this dream may come true if Vietnam remains determined, just like Bangladesh did.
The green transition means a shift toward economically sustainable growth and an economy that is not based on fossil fuels and overconsumption of natural resources. The success story of Bangladesh’s textile industry is a testament to its potential. While Vietnamese businesses are grappling with order shortages, Bangladesh has secured its position as the world’s secondlargest textile and garment exporter and is working tirelessly to fulfill its orders.
Bangladesh’s textile industry has emerged as a frontrunner in environmentally friendly garment factories worldwide. As of September 2022, the country boasted 171 Leadership in Energy and Environmental Design-certified factories, with 54 achieving platinum status.
The green transition has been closely linked to the development of Bangladesh’s garment and textile industries, which account for 80% of the country’s exports and contribute 30% to its GDP. It has fostered sustainable growth in the country and resulted in higher-quality outcomes. How about Vietnam? As Vietnam has pledged to achieve net-zero carbon emissions by 2050, the green transition must be initially implemented in the key export sectors and other major industries.
As the majority of businesses in Vietnam are small and mediumsized, the green transition requires much effort and effective strategies from the Government and businesses. Once Vietnam comes up with suitable green models for those enterprises, just like Bangladesh has done with its garment and textile industries, the goal will be achievable.
The global economic downturn may make it harder to implement a green transition. Financial resources are always a primary concern, yet Vietnam can receive support from various international economic organizations with a clear and feasible roadmap.
The green transition also relies on the active engagement of foreign direct investment (FDI) enterprises. Investment in clean energy and renewable projects, as well as the exploration of green energy resources, are top priorities for many FDI enterprises in Vietnam, especially large corporations. This provides an opportunity for Vietnam to step up green transition in the energy sector and create favorable conditions for other industries to embrace a more environmentally friendly approach.
However, it also piles pressure on the Government to make further efforts to drive the green transition. Several EU investment projects in Vietnam have put their expansion plans on hold as the country has yet to satisfy the green energy standards. The protracted obstacles faced by wind and solar power investors in recent years also indicate that Vietnam has a long way ahead to achieve sustainable development.