Cascale's Higg FEM Reveals Opportunities for Low-Carbon Transition in Vietnam
In 2023, over 1,200 verified Higg FEM submissions showed coal exacerbates carbon emissions in the region: 12% of apparel and footwear facilities use coal for energy, while 94% rely on electricity purchased from Vietnam's coal-dependent grid. Although renewable energy accounts for less than 2% of the sector's energy use, the analysis underscores opportunities for transformation to a low-carbon economy, including through the Industry Decarbonization Roadmap (IDR) developed by Cascale and Aii.
The report shows Vietnam can couple growth with sustainable manufacturing. Vietnam's economy is expected to grow by 6.5% in 2025, outpacing regional peers. The manufacturing sector continues to be a key driver, contributing 23.88% to GDP in 2023. Additionally, Foreign Direct Investment (FDI) remains robust, reaching US$31.4 billion in the first 11 months of 2024, signaling investor confidence in Vietnam's economic resilience. Employing around three million workers and generating an estimated US$71 billion in export revenues for 2024, the apparel and footwear sector is a vital component of Vietnam's economy but faces significant sustainability challenges, including high energy consumption and carbon emissions. With commitments in place for a 65-70% increase in renewable energy by 2045 – reducing greenhouse gas emissions by a projected 70-80% – Vietnam is committed to supply chain decarbonization, in line with the IDR.
The report brings Cascale and Aii's IDR into focus as a potential solution. By uniting manufacturers, brands, retailers, and stakeholders around shared goals, the IDR emphasizes collective accountability and pre-competitive collaboration to accelerate systemic change across the supply chain. With a science-based target of reducing supply chain emissions by 45% by 2030, the IDR drives measurable progress through various interventions, solutions, and programs. The IDR ensures resources are targeted, so low-carbon sourcing and other benefits can be realized. This means prioritizing action in the 10% of facilities across the textile and apparel supply chain – including some in Vietnam – that account for over 80% of global manufacturing emissions. By aligning with these initiatives, facilities in Vietnam can play a pivotal role in the global transition to a low-carbon economy.'This isn't merely about compliance—it's about long-term competitiveness,' said Colin Browne, Cascale CEO. 'Brands increasingly prefer suppliers who meet robust sustainability standards. Manufacturers investing in sustainability today will secure long-term brand partnerships tomorrow.'
ABOUT CASCALE
Cascale is the global nonprofit alliance empowering collaboration to drive equitable and restorative business practices in the consumer goods industry. Formerly known as the Sustainable Apparel Coalition, Cascale owns and develops the Higg Index, which is exclusively available on Worldly, the most comprehensive sustainability data and insights platform. Cascale unites over 300 retailers, brands, manufacturers, governments, academics, and NGO/nonprofit affiliates around the globe through one singular vision: To catalyze impact at scale and give back more than we take to the planet and its people.
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