IFC, a member of the World Bank Group, is partnering with global apparel and footwear company VF Corp. and retailer Target Corp. to improve efficiency at their supplier factories in Vietnam.

The manufacturing sustainability initiative will promote resource efficiency by systematically assessing performance improvement opportunities, conducting benchmarking studies, sharing best practice technology and raising awareness for broader uptake of new methodology, IFC announced on Tuesday.

The first phase of the program features energy and water efficiency assessments at factories across Vietnam to help them reduce operating costs and improve productivity, according to IFC.

The assessments will be conducted in about 30 factories over the next 12 months, with the effort intended to contribute to the country’s green growth and climate change targets.

A significant part of Vietnam’s economy, the textile, apparel and footwear sector earned US$39.2 billion in exports in 2015, and generated approximately three million jobs, most of which are for women.

While this sector is energy and water intensive, there are opportunities to reduce consumption by 20 percent or higher by using the latest technology and employing better operating practices, IFC underlined.

“Vietnam’s textile enterprises stand to benefit from this IFC program by gaining greater access to global markets while implementing best practice resource efficiency,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Laos.

Vietnam has recently participated in multiple trade pacts, such as the Trans-Pacific Partnership and the EU Free Trade Agreement, with the local textile sector “poised for faster growth, creating increased demand for sustainable energy and water use practices,” Kelhofer added.

Factory assessments at VF and Target’s supplier factories will identify and develop cost-effective measures to enhance energy and water efficiency while helping suppliers improve productivity and competitiveness, according to IFC.

An employee works at a textile factory in Ho Chi Minh City. Photo: Tuoi Tre

Besides providing advice on technical solutions, IFC will also help facilitate financing through its partner banks in Vietnam, drawing on its substantial experience in other top textile export countries such as Bangladesh and China.

“The cooperation with IFC in Vietnam strongly complements Target’s global responsible sourcing strategy and our corporate sustainability goals for making supplier factories more resource efficient and environmentally friendly,” said Ivanka Mamic, director of responsible sourcing at Target Sourcing Services.

In the meantime, Brad van Voorhees, senior manager for supply chain sustainability at VF Asia, said the collaboration with IFC and Target enables the collective exchange of knowledge and best practices to green the textile supply chain.

“VF has a long history of manufacturing excellence centered on respect for the people and the environment,” Van Voorhees said.

According to IFC, subsequent phases of the program will evaluate opportunities for the use of clean energy to meet captive power needs across the textile supply chain.

This initiative is part of IFC’s multi-year Vietnam resource efficiency program that is implementing innovative approaches to scale-up their impacts through engaging with leading global brands and their supply chains. The program also intervenes in selected industrial zones to promote circular economy concepts among co-located industries.  

World Bank’s IFC is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, IFC uses its capital, expertise, and influence to create opportunity where it is needed most.

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