Local apparel and textile suppliers save big bucks on resource efficiency measures

IFC, a member of the World Bank Group, has been assisting local apparel and textile suppliers to improve their resource efficiency and reduce operating costs under IFC’s Vietnam Improvement Programme (VIP). The aim is to increase productivity and promote sustainable private sector growth, thereby boosting the country’s economy.

Over the last three years, the programme has enabled 82 textile, apparel and footwear factories to invest $37 million in resource efficiency measures, helping them save $30 million a year in water, energy, and chemical operating costs. Further, they have collectively saved 4 million cubic metres of water and curbed 303,000 tonnes of greenhouse gas emissions annually.

“The textile and garment sector is an important contributor to job creation and economic growth in the regional economies including Vietnam and Cambodia. Adopting sustainable energy and water use practices has demonstrated a strong business case for local manufacturers as they can save production costs and improve competitiveness in the global supply chains at the same time,” said Kyle Kelhofer, IFC country director for Vietnam, Cambodia, and Lao PDR.

Vietnam is one of the ten largest exporters of textiles and garments globally, contributing significantly to the country’s economy. However, chemical discharge makes the sector the second-biggest water polluting source in the country. Vietnam’s textile and garment factories are also among the world’s most energy-intensive ones, using up one tenth of the total energy consumed by all industries in the country.

These factories – with cut-and-sew, dyeing-and-printing, and garment-washing operations – supply to some of the world’s leading retailers and clothing companies including Adidas, New Balance, Puma, Target Corporation, and VF Corporation. By improving efficiency, the factories will be able to meet higher sustainability requirements of global buyers.

In particular, 35 selected suppliers of Target Corporation have invested $17.5 million in resource efficiency measures, which in return helping them collectively save $17 million in water, energy, and chemical operating costs annually. They have further saved 1.9 million cubic metres in water consumption and curbed 166,000 tonnes of greenhouse gas emissions annually.

Moreover, just by implementing no- and low-cost options as first phase interventions, 25 Target Corporation suppliers, joining the second phase of VIP, have collectively consumed 24 per cent less energy and 16 per cent less water in the first year.

“At Target, we are pursuing an ambitious climate goal, as part of our commitment to reduce our carbon footprint from source to shelf. A key partner in this effort is the IFC and its resource efficiency improvement initiative, helping suppliers reduce greenhouse gas emissions while increasing their energy and water efficiency,” said Bill Foudy, senior vice president and president of Owned Brand Sourcing and Development at Target.

IFC’s VIP has been implemented since 2015 in partnership with the Clean Technology Trust Fund and Korean Green Growth Trust Fund. The programme facilitates innovative aggregation approaches to scale up resource efficiency in industries by engaging leading global brands and their supply chain partners.