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IFC Helps Apparel and Textile Suppliers in Vietnam Save $30 Million a Year through Resource Efficiency Measures

Hanoi, Vietnam, September 12, 2019 —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 Program (VIP). The aim is to increase productivity and promote sustainable private sector growth, thereby boosting the country’s economy.
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.
Against this backdrop, over the last three years, the program has enabled 82 textile, apparel, and footwear factories to invest $37 million in resource efficiency measures, helping them save $30 million in water, energy, and chemical operating costs annually. Further, they have collectively saved four million cubic meters of water and curbed 303,000 tons of greenhouse gas emissions annually.
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.
35 selected suppliers of Target Corporation have invested $17.5 million in resource efficiency measures, which already help them collectively save $17 million in water, energy, and chemical operating costs annually. They have further saved 1.9 million cubic meters in water consumption and curbed 166,000 tons 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 percent less energy and 16 percent 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, Owned Brand Sourcing and Development, Target.
IFC’s VIP has been implemented since 2015 in partnership with the Clean Technology Trust Fund and Korean Green Growth Trust Fund. The program facilitates innovative aggregation approaches to scale up resource efficiency in industries by engaging leading global brands and their supply chain partners. A similar initiative—Cambodia Improvement Program—has recently been launched in Cambodia to improve efficiency of about 20 garment factories in 2019.
“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 .
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
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