Vietnam’s manufacturing sector is undergoing a rapid transformation. A new Cascale report highlights a crucial truth: as Vietnam moves towards a low-carbon economy, manufacturers who fail to adapt quickly to changing brand expectations, tightening sustainability regulations, and shifting energy landscapes risk falling behind.

The textile, apparel, and footwear industry—representing 15 per cent of Vietnam’s GDP—is under immense pressure to cut emissions. Global brands are raising sustainability standards, trade policies are evolving fast, and manufacturers who take decisive action now will position themselves as the preferred partners in tomorrow’s market.

That is why Cascale is hosting the Cascale Forum in Ho Chi Minh City this May—to unite manufacturers, brands, NGOs, and policymakers around clear, actionable solutions to our industry’s toughest challenges.

Vietnam’s Economic Growth: A Platform for Sustainable Business
Here is why this matters: Vietnam’s projected 6.5 per cent GDP growth in 2025 shows its impressive economic resilience, driven largely by significant foreign direct investment. The shift from agriculture to manufacturing has rapidly expanded the textile, apparel, and footwear sector, now contributing substantially to the nation’s GDP through exports. For consumer goods companies seeking strategic collaborations, Vietnam offers a unique opportunity to leverage sustainable growth.

Yet, rapid industrialisation brings substantial environmental hurdles. This industry alone, employing over three million people, accounts for nearly eight percent of industrial energy demand and emits around five million tons of CO2 annually. With global market demands intensifying, addressing these sustainability challenges is not optional—it is essential.

Decarbonisation: A Business Imperative for Manufacturers
Let us be clear — decarbonisation requires real commitment and immediate action. Vietnam’s manufacturing sustainability challenges have global consequences, primarily because current operations rely heavily on coal and grid electricity. Transitioning to renewable energy is not just good policy; it is smart business.

Vietnam has committed to sourcing 10 per cent of electricity from renewable sources by 2025 and reducing annual energy consumption by 0.4 per cent through 2030, aiming for net-zero emissions by 2050. However, progress remains slow. Currently, only six per cent of Vietnam’s textile, apparel, and footwear manufacturers use renewable energy. To stay competitive, manufacturers must accelerate adoption of energy-efficient technologies, significantly reduce water usage, and scale renewable energy investments.

This is not merely about compliance—it is about long-term competitiveness. Brands increasingly prefer suppliers who meet robust sustainability standards. Manufacturers investing in sustainability today will secure long-term brand partnerships tomorrow.

The Industry Decarbonisation Roadmap (IDR): A Framework for Action
At Cascale, we focus on actions that create real impact. We have launched an industry-wide initiative called the Industry Decarbonisation Roadmap (IDR) to help achieve 45 per cent emissions reductions by 2030. It is a manufacturer-driven, data-backed framework designed to cut emissions, improve efficiency, and strengthen business and supply chain resilience. By strategically targeting the 10 per cent of facilities responsible for 80 per cent of emissions, the IDR directs resources precisely where they matter most. Manufacturers following this framework will cut emissions, align with global sustainability standards, gain competitive advantages, and unlock new market opportunities.

Manufacturers are at the heart of industry transformation—and their leadership is essential—and we remain committed to delivering solutions that put manufacturers at the centre.

Harnessing Vietnam’s Consumer Goods Boom
Vietnam’s consumer goods market—projected to reach $488 billion by 2029—is an enormous opportunity for companies committed to sustainability. Today’s urban, educated, and tech-savvy consumers increasingly prefer eco-friendly, socially responsible products. This consumer shift is reshaping retail and manufacturing. Companies embracing sustainability would not just meet consumer demands—they will lead industry transformation.

Policy Support and Business Environment
Policy plays a critical role, but businesses cannot wait for perfect conditions. Vietnam’s policy landscape is quickly evolving, promoting renewable energy and decarbonisation, including targets of 15-20 per cent renewable energy by 2030. Trade agreements like the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) open market access but demand higher environmental and labour standards.

For companies, proactively aligning with these evolving policies means gaining preferential access to international markets and improving operational efficiencies. Staying ahead of policy changes is not just strategic—it is necessary.