Increasing circular economy capacity for Vietnam enterprises

Over the past six months, 105 business from agriculture, construction, e-commerce, manufacturing, logistics, the environment, and waste treatment have participated in the circular economy capacity-building program for enterprises in 21 cities and provinces.

15 of those were selected and enrolled in a followed-up incubation activity.

They were directly counseled, connected, and analyzed challenges and solutions to apply circular economic models effectively.

It was shown at the Harvest Day & CE Connect, which was organized by the United Nations Development Program (UNDP) in collaboration with the Embassy of the Netherlands, the Institute of Strategy and Policy on Natural Resources and Environment (ISPONRE), the Environmental Economic Policy Institute (EEPI), Thua Thien Hue Innovation Hub (HiHub), the Institute for Circular Economy Development (ICED) and Saxion University of Applied Sciences.

The event highlighted programme’s achievements, brought together businesses along the value chain to foster resource sharing and partnership formation, and showcased company products while sharing strategic business plans and practical circular models with other businesses to accelerate the transition to a circular economy.

Small and medium-sized enterprises (SMEs), which make up 96 per cent of all businesses in Vietnam, employ 47 per cent of the labor force, and provide 36 per cent of the country's value-added, are crucial for accelerating the transition towards circular economy.

“Circular economy offers an economic opportunity for Vietnamese businesses. A circular economy is not simply about 'fixing' negative environmental externalities; rather, it is an economic transition aiming to sustain and regenerate natural capital upon which people, communities, and the economy depend,” said Ramla Khalidi, UNDP Resident representative in Vietnam.

Indeed, research shows that the transition towards a circular economy offers $4.5 trillion in economic opportunities globally by reducing waste, stimulating innovation, and creating employment.

She added that: “We need to ensure that businesses are provided with the technical and financial support needed to transform the production and consumption model, align with national policies on the circular economy, and reap the benefits of the trade agreements between Vietnam and other countries.”

According to the Ambassador of the Kingdom of the Netherlands to Vietnam, the promotion and development of circular economy infrastructure have the ability to meet the needs of socio-economic development in Vietnam (for example, Responsible Business Conduct).

“With enhancing government policies on the circular economy and raising awareness among businesses and the community, the Netherlands believes that Vietnam is set to become a partner in pursuing sustainable economic development.”

Mai The Toan, deputy president of ISPONRE, informed that ISPONRE, with the support of UNDP, the Netherlands Embassy, and other international organizations, has incorporated the circular economy's principles into Vietnamese law.

In particular, the Law on Environmental Protection 2020 and the guiding documents have recently institutionalized the regulation of the circular economy, along with other policy instruments that promote the implementation of the circular economy, such as Extended Producer Responsibility (EPR), green credit, green bonds, solid waste, and wastewater management…

These are necessary conditions for advancing the circular economy in Vietnam. To put these legal measures into effect, however, additional study is required to uncover and duplicate successful models of circular economy application within businesses, he emphasized.

At the event, businesses shared practical models and lessons learned, such as environmentally friendly packaging model of Tra Dinh Vien, the circulating wastewater treatment model in Nam Cau Kien Eco-Industrial Park, the trading of used fashion products of Piktina, and the lessons learned from the food and beverage industry's transition to circularity shared by Carafood.

Delegates and businesses also discussed the role of ecosystem in supporting businesses and facilitating the acceleration of the transition to a circular economy.

Specially in packaging industry, related to EPR – a significant tool in the Law on Environmental Protection 2020, lots of enterprise has taken actions for years to apply it efficiently.

In 2019, nine leading FDI and Vietnamese companies having high prestige from consumer goods, packaging, retail, and import industries, jointly established Packaging Recycling Organization Vietnam (PRO Vietnam). It is considered to be the primitive form of an industry-level EPR enforcement organization.

Its aspiration and vision are that all of the products produced and distributed in Vietnam by their members will be completely recycled and restored in Vietnam by 2030.

PRO Vietnam is set to achieve this objective by enhancing public awareness and accessibility to recycling in Vietnam, working in public venues, increasing the number of collecting points, improving the collecting process, as well as ensuring recycling capacity to readily process what have been consumed.

Coca-Cola Vietnam, a member of PRO Vietnam, introduced its bottles made from 100 per cent recycled PET plastic excluding caps and labels. The company expects to avoid using around 2,000 tonnes of new plastic in Vietnam annually.

Other member of PRO Vietnam, Nestlé Vietnam consistently participates in sharing initiatives and practical experiences to inspire other businesses, contributing to sustainable development in Vietnam.

It announced its commitment to plastic neutrality by 2025, and also signed an MoU with the Vietnam Environment Agency, with the aim of promoting propaganda activities, disseminating and raising awareness about environmental protection, and promoting activities on sustainable packaging management.