Green growth in business

Check and maintain operating equipment of Centralized Wastewater Treatment Plant, Nam Cau Kien Industrial Park, Thuy Nguyen District, Hai Phong.

This is also an inevitable global trend and a priority goal for developing countries. However, there are still limitations in human resources, access to capital, and support policies that prevent many businesses from really focusing on green growth.

More than ever, the Government, ministries, local sectors, and especially businesses need to quickly change their thinking and awareness, invest in new technologies, move towards green production, reduce greenhouse gas emissions, and take actions to effectively implement the goal of green and sustainable development in the future.

Inevitable trend

The general goal of economic development towards green and sustainable growth is to achieve economic prosperity, environmental sustainability and social equity. For Vietnam, green growth is not only an inevitable choice but also an opportunity to become a pioneering country in the region, catching up with the development trend of the world.

Vietnam has participated in international agreements on global pollution control, climate change and environmental protection. The Vietnamese government is perfecting its legal and policy systems to support the transition to a sustainable green economy, aiming for Net Zero by 2050.

Recognizing the importance of green growth for the country's future, the Prime Minister has approved the National Strategy on Green Growth for the 2021-2030 period, with a vision to 2050, to promote economic restructuring associated with growth model innovation, enhance competitiveness, and directly contribute to reducing greenhouse gas emissions towards a carbon-neutral economy in the long term.

In that process, the business community is identified as a key factor, playing an important role and has also taken many practical actions contributing to the green growth goal such as: Using clean energy, environmentally friendly materials; investing in modern, high-tech production lines, using less resources and energy; minimizing emissions; applying environmental, social and governance (ESG) standards, etc.

However, there are still fundamental "obstacles" for businesses in the process of implementing green growth in Vietnam. According to a survey by VCCI, the level of understanding and environmental regulations of Vietnamese businesses is still at an initial stage. Only 31.8% of private enterprises clearly understand environmental regulations, 44% of domestic enterprises and 38% of FDI enterprises admit that they have not fully complied with environmental regulations.

The current awareness of green economy in Vietnam is still quite new. Many businesses are not aware of their responsibility to the environment or do not have human resources knowledgeable about environmental laws while environmental regulations are still complicated, not easy to access, and the cost of compliance with environmental regulations is still high. Although there is a desire to change towards sustainable development, many businesses are still limited in technology due to old production equipment and machinery; businesses only stop at the level of consideration, without any moves towards sustainable development and green growth.

Although there are still difficulties, businesses need to identify green and sustainable growth as an inevitable process of society, which must be implemented, especially in the face of strong commitments by the Vietnamese Government at the 2021 United Nations Climate Change Summit (COP26) when it determined to bring carbon emissions to zero by 2050.

According to Deputy General Director of Vietnam Steel Corporation (VNSTEEL) Pham Cong Thao, the transition from a traditional production system to a sustainable model is essential to protect the future environment for the next generation. Realizing that the steel industry accounts for a significant amount of CO ₂ emissions into the environment, VNSTEEL has built a long-term strategy to adapt and respond to minimize CO ₂ emissions. Currently, 82% of the VNSTEEL system's crude steel output is smelted from electric furnaces and 18% from blast furnaces, which are produced mainly downstream, so VNSTEEL's emissions into the environment are not higher than the average of steel industry enterprises.

VNSTEEL also sets a goal of reducing carbon emissions by 5-10% by 2025, focusing on optimizing operations to reduce emissions. To reduce emissions significantly and move towards zero emissions, VNSTEEL will need a major technological breakthrough, while the problem of consumption and emissions of the enterprise is still limited by some old and outdated equipment. If upgraded or replaced immediately, it will cost a lot.

Sản xuất sợi xuất khẩu tại Công ty TNHH Một thành viên Dệt 8-3. — Producing export yarn at 8-3 Textile One Member Co., Ltd.

Driving force for sustainable development

Encouraging businesses to proactively and actively participate in responding to climate change is one of the Government's top concerns. However, compared to the world, most of the production technology of Vietnamese enterprises is old technology, consuming a lot of energy. Changing to new technology suitable for a green economy is also a challenge because the investment cost is very high.

Therefore, most businesses are forced to accept using old technology and cheap materials to serve short-term goals or can only "have enough strength" to diversify investments. But this approach will not be effective and lacks consistency. Therefore, according to experts, in the short term, businesses can proactively participate in environmental protection, while optimizing production and business capabilities through saving raw materials, using renewable materials, reducing greenhouse gases, etc.

During the implementation process, business owners must consider this as a "revolution", the best opportunity for businesses to re-perceive traditional business models, access new business opportunities, boldly cooperate and mobilize resources to gradually transform business models and aim for long-term efficiency. Slow transformation will only cause businesses to fall further behind the green growth goal that is becoming increasingly popular in the world.

Vice President of the Vietnam Federation of Commerce and Industry (VCCI), Chairman of the Vietnam Business Council for Sustainable Development (VBCSD) Nguyen Quang Vinh said that the Government and the business community must work together and share the vision and strategy for rapid, green and sustainable development. The Government needs to have development orientations suitable to the context and conditions of Vietnam to take advantage of international opportunities that the market brings; at the same time, increase access to capital for green growth for businesses, continue to build and diversify incentive policies for businesses to invest in the direction of using high technology, clean technology, low energy and resource consumption, low emissions and environmentally friendly. Green growth and sustainable development are certainly not easy to take, but will bring many "sweet fruits" worthy of businesses' efforts.

Speaking at the recent Vietnam Economic Forum (VBF) 2024, Prime Minister Pham Minh Chinh affirmed that green and sustainable development, associated with maintaining macroeconomic stability, social equity, and environmental protection, is the top priority of the Vietnamese Government. In that spirit, Vietnam has actively and responsibly participated in promoting green growth and sustainable development through commitments and initiatives at international conferences and forums.

The Vietnamese Government continues to strongly commit to creating all favorable conditions for business development, including cutting costs for businesses; increasing transparency and equality in accessing resources; pioneering innovation in awareness, thinking and action in green growth; pioneering in implementing specific projects, plans and action programs to serve green growth towards renewing traditional growth drivers, etc.

However, businesses need to be more active and proactive in participating in the transformation of the growth model from "brown" to "green"; always pioneer and integrate on the global green journey; continue to play a core role in implementing sustainable development goals.

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