GREEN TRANSFORMATION: KEY FOR VIETNAMESE BUSINESSES TO INTEGRATE INTO GLOBAL SUPPLY CHAINS

Opportunities from global supply chain

Vietnam is becoming as a new focal point in the global supply chain, benefiting from strong manufacturing capacity, a skilled workforce, a stable investment environment, and rapid integration.

This assessment was highlighted by Global Sources, a leading B2B platform headquartered in Hong Kong (China) at a seminar on global sourcing outlook 2025 - economic and trade fluctuations as a lever for Vietnam’s export growth held in early November in Ho Chi Minh City.

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Vietnam has now joined more than 17 bilateral and multilateral free trade agreements (FTAs), opening wide opportunities for connection with major markets such as the US, Europe, Japan, and the Middle East.

Global Sources

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FTAs drive Vietnamese enterprises. However, deeper integration into global supply chains brings both opportunities and challenges. Meeting environmental, food safety, and traceability standards is now a top requirement, demanding significant investment from Vietnamese businesses.

Prof. Vo Xuan Vinh, Director of the Institute of Business Research, University of Economics Ho Chi Minh City

From the perspective of international buyers, Edwin Law, Executive Director of the Australian Chamber of Commerce in Vietnam (AusCham Vietnam), noted that Vietnam is playing an increasingly important role in the global trade landscape. He said top buyers are looking for Vietnamese suppliers that offer stable quality, sustainable production capacity, transparent governance, and compliance with environmental, social and governance (ESG) standards.

Green transition remains an inevitable path

Green transformation is no longer a choice but a mandatory requirement in the present context. As global supply chains undergo restructuring, the green and digital transition (dual transition) has become a new growth engine, helping Vietnamese businesses access and expand into new markets and develop their export brands. To seize these opportunities, enterprises must be more proactive and innovative, and commit to investing in circular models of production, consumption, and recycling.

According to Prof. Vinh, Vietnamese businesses are facing significant challenges as new sustainability standards, including ESG standards, green standards, and carbon border adjustment mechanism (CBAM) standards from the EU, Japan, and the Republic of Korea demand strict compliance with carbon-reduction regulations. At the same time, Vietnam’s legal framework for green finance, carbon credit trading, and recycling is still being developed.

One of the biggest challenges today is that ESG standards have undergone significant changes. Globally, ESG and sustainability reporting are shifting from a voluntary practice to a mandatory disclosure requirement. Businesses must ensure transparency across their entire supply chain, from sourcing materials to social responsibility and environmental impact.

In the face of environmental challenges and green transition, especially as global markets prioritise ESG standards, the implementation of the “Extended Producer Responsibility” (EPR) policy is essential to promote a circular economy and protect the environment. EPR compliance is also a key solution that enables Vietnamese enterprises to overcome environmental and sustainability barriers and challenges when joining global supply chains.

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EPR – a modern environmental management tool adopted by many countries worldwide, assigning responsibility to producers and importers for the collection, recycling, and disposal of products and packaging after use.

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Businesses play a central role in implementing EPR and developing a circular economy — a necessary shift from the traditional linear model. EPR is not only a legal obligation but also an opportunity for companies to achieve sustainable transformation, enhance their brand, and boost global competitiveness.

Nguyen Thanh Yen, Deputy Head of the Legal Issues and Policies Division, Department of Environment under the Ministry of Agriculture and Environment

Dual transformation – key factor for sustainable business development

Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), speaks at the forum “dual transformation - a driver for economic growth: from policy to practice” held in late October in Hanoi.

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In the context of globalisation and the 4th Industrial Revolution, dual transformation, which combines digital transformation and green transformation, is becoming a key factor for businesses to improve competitiveness and pursue sustainable development.

Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI)

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Applying digital technologies and smart energy management systems can help businesses reduce operating costs by 10–15%, increase productivity by 20%, and cut CO₂ emissions by 5 –8% annually. In practice, digital and green transformation is advancing strongly in the manufacturing sector, not only enhancing companies’ internal capabilities but also contributing to national commitments on sustainable development and net-zero targets.

The Ministry of Industry and Trade

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Digital and green transformation enables Vietnam not only to accelerate growth but also to develop sustainably, towards reaching sustainable double-digit growth driven by productivity, technology, and innovation. For businesses, green transformation helps save energy, reduce emissions, optimise resources, and meet increasingly stringent global ESG standards.

Nguyen Hong Hien, Director General of the Department of Science, Technology, Innovation, and Digital Transformation under the Party Central Committee’s Commission for Policies and Strategies

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The dual transformation — digitalisation and greenification — is not just a slogan but a necessary path for Vietnamese businesses to achieve double-digit growth and expand globally. It also helps increase productivity, reduce costs, broaden markets, enhance competitiveness, and contribute to Vietnam’s net-zero emission commitment, Nguyen Hong Hien said.

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Digital and green transformation must be pursued simultaneously to optimise growth resources and achieve sustainable development. The digital and green transformation must be closely linked with innovation.

Pham Hong Quat, Director General of the Academy of Startups and Technology Enterprises under the Ministry of Science and Technology

According to Quat, dual transformation essentially involves changing the business model, not merely applying technology. In particular, digital transformation is now shifting toward AI-based platforms and ecosystem business models, posing significant challenges for growth business models in enterprises, requiring first and foremost a shift in mindset, perspective, and new business models to strengthen internal capabilities and meet increasingly fierce regional and global competition. Moreover, human factors play a crucial and decisive role in dual transformation.

Dual transformation is a golden opportunity for Vietnamese businesses to restructure, boost productivity, expand markets, and elevate the national brand. By combining digitalisation with green transformation, Vietnam can not only produce more efficiently but also move closer to global standards in governance, environmental and technology management, thereby integrating more effectively into the global supply chain./.