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Vietnam suppliers realising benefits of IFC efficiency scheme

Around 28 textile and apparel suppliers to VF Corp and Target in Vietnam have realised a collective saving of US$15m in water, energy and chemical operating costs under a resource efficiency scheme run by the International Finance Corporation (IFC).

The Vietnam Improvement Program (VIP), implemented by the IFC in 2015 in partnership with the Clean Technology Trust Fund and Korean Green Growth Trust Fund, assists local apparel and textile suppliers to improve their resource efficiency and reduce operating costs.

Over the last 18 months, the programme has worked with 28 selected VF Corp and Target suppliers with cut-and-sew, dyeing-and-printing, and garment-washing operations. Collectively, they invested $9.9m in resource efficiency measures, which has helped them save $15m in water, energy, and chemical operating costs. "The energy-efficiency savings achieved at VF's suppliers participating in VIP help validate the merits of our supplier improvement programme, and help pave the way for additional scaling of our efforts," says Brad van Voorhees, senior manager of environmental practices and sustainable operation at VF Corporation. "We have been on this journey with our suppliers for nearly four years, and we appreciate their commitment to strong collaboration and meaningful progress."

By implementing a combination of low cost and more complex factory projects, suppliers achieved average water and energy savings of more than 20%, with the highest-achieving factories attaining more than double these average savings.

When all the recommended interventions are fully implemented over the next two years, the $26m capital investment required for retrofits and new, more efficient equipment could collectively save 2.8m cubic metres of water and 562,000 tonnes of GHGs annually, with associated productivity and environmental benefits, the IFC says.

"With Vietnam's rapid growth and increasing textile exports, intervention in this sector provides a key opportunity, with scale, to help Vietnam promote a more sustainable private sector growth," adds Kyle Kelhofer, IFC country manager for Vietnam, Lao PDR, and Cambodia. "Positive results, early on in the programme, have demonstrated the business case for resources savings." With around $27bn in exports annually, the apparel and textiles sector is the second largest exporter for Vietnam and a significant contributor to its economy.

The IFC says it plans to build on the work it is doing through the programme and leverage its partnerships with other leading global brands in Vietnam.

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