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IFC supporting resource efficiency at apparel & textile suppliers

Released at: 17:39, 12/09/2019

IFC supporting resource efficiency at apparel & textile suppliers

Photo: IFC

Suppliers can save $30mn a year through IFC's resource efficiency measures.

by Hong Nhung

The International Finance Corporation (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 its 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, which contributes significantly to the country’s economy. Chemical discharge, however, makes the sector the second-largest water polluter in the country. Textile and garment factories are also among the most energy-intensive, using one-tenth of the total energy consumed by all industries in Vietnam.

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 costs annually. They have also collectively saved 4 million cu m 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, the Target Corporation, and the VF Corporation. By improving efficiency, they will be able to meet the higher sustainability requirements of global buyers.

Thirty-five selected suppliers of the Target Corporation have invested $17.5 million in resource efficiency measures, which have already helped them collectively save $17 million in water, energy, and chemical costs annually. They have further saved 1.9 million cu m 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 suppliers joining the second phase of the VIP 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,” said Mr. Bill Foudy, Senior Vice President and President, Owned Brand Sourcing and Development, at Target. “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.”

The VIP has been implemented since 2015 in partnership with the Clean Technology Trust Fund and the 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 - the Cambodia Improvement Program - has recently been launched in Cambodia to improve the efficiency of some 20 garment factories this year.

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

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