Optimizing productivity for green and sustainable manufacturing

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Amid rising input material costs and increasingly stringent sustainability requirements, Vietnamese enterprises are facing a new challenge: optimizing productivity while greening production. Rather than viewing productivity and environmental performance as separate objectives, integrating these two factors is becoming a critical management solution that helps businesses enhance competitiveness and achieve sustainable development.

  1. Productivity and green production: Two sides of the same coin

For many years, businesses have focused on increasing output, reducing labor costs, or improving operational efficiency, while environmental issues have often been managed separately. However, experience has shown that when production processes are optimized and waste is minimized, the consumption of energy, water, and raw materials can also be significantly reduced.

This is where productivity and green production intersect: businesses can simultaneously lower costs and reduce their environmental footprint.

  1. Resource savings through operational efficiency

A standardized operating process can generate substantial benefits for both economic performance and environmental protection.

Reducing energy consumption: When machinery operates at the appropriate capacity and production schedules are organized efficiently, idle running and inefficient operations can be minimized. This enables businesses to significantly reduce electricity costs, which often account for a large share of overall production expenses.

Optimizing water use: In industries such as textile dyeing, food processing, and agricultural product processing, the adoption of water-saving technologies, water reuse systems, and leakage control measures not only lowers operating costs but also demonstrates corporate responsibility toward natural resources.

  1. Reducing defect rates – protecting the environment through quality

Effective quality control is one of the most practical ways to reduce environmental pressure. When product defects and material losses are minimized, businesses can use raw materials more efficiently, reduce waste generation, and lower waste treatment costs.

Continuous improvement tools such as 5S, Kaizen, and ISO 9001 quality management systems help businesses prevent defects at the source, improve production efficiency, and establish a strong foundation for sustainable green development.

  1. Toward a circular economy

Rather than maintaining the traditional “take-make-dispose” model, many businesses are transitioning toward a circular economy. By utilizing by-products as inputs for other processes, reusing materials, or collaborating with recycling partners, companies can extend resource lifecycles, reduce environmental pressures, and create additional value streams.

This is not only an environmental solution but also a long-term strategy that helps businesses reduce dependence on virgin raw materials and improve resilience against market fluctuations.

  1. An essential requirement of the global marketplace

Green productivity is no longer an optional initiative – it is rapidly becoming a business necessity. Major export markets are imposing increasingly stringent requirements related to environmental performance, carbon emissions, resource efficiency, and product traceability.

Businesses that integrate productivity goals and sustainability objectives into their operational strategies at an early stage will gain significant advantages in terms of cost efficiency, product quality, and competitive positioning in international markets.

It is clear that productivity optimization not only enables businesses to operate more efficiently but also serves as a key driver of green production and sustainable development. As every process is improved, every resource is utilized more effectively, and every form of waste is reduced, businesses move closer to achieving sustainable growth in the green economy era.

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Product Life Cycle Assessment – An Optimal Solution for Sustainable Development

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In the context of the global economy shifting strongly toward green and sustainable development, Life Cycle Assessment (LCA) has become a key tool that helps businesses demonstrate their environmental responsibility. LCA is not only a technical report, but also proof of a company’s efforts to optimize its production processes and supply chain.

What is LCA?

LCA (Life Cycle Assessment) is a method for assessing and measuring the environmental impacts associated with a product, service, or process throughout its entire life cycle. This process is carefully calculated from raw material extraction, production, and transportation to the time the product is used and finally treated or recycled.

Conducting LCA enables businesses to integrate sustainability information into management reports, helping enhance transparency and brand credibility with investors and consumers.

LCA stages and approaches

A typical product life cycle goes through five main steps:

  1. Raw material extraction.
  2. Production and processing.
  3. Transportation and distribution.
  4. Use and retail.
  5. Waste treatment or recycling.

Depending on the company’s objectives, different LCA approaches can be selected:

  • Cradle-to-gate: Assessment from raw material extraction until the product leaves the factory.
  • Cradle-to-grave: Comprehensive assessment from raw materials until the product reaches the end of its life cycle.
  • Cradle-to-cradle: This is an approach that promotes the circular economy, assessing the product until it is recycled to begin a new life cycle.

ISO-standard LCA implementation process

Life cycle assessment is internationally standardized through the ISO 14000 series of standards. The two core standards include:

  • ISO 14040:2006: Specifies the principles and general framework of LCA.
  • ISO 14044:2006: Provides detailed requirements and guidelines for performing system modeling and reporting results.

A standard LCA study typically includes four closely connected phases:

Phase 1: Defining the goal and scope of the study.

Phase 2: Inventory analysis: Collecting input and output data of the system.

Phase 3: Impact assessment: Converting inventory data into specific environmental impacts.

Phase 4: Interpretation of results: Drawing conclusions and identifying opportunities for improvement

Outstanding benefits for businesses conducting LCA

Conducting LCA brings many strategic values rather than merely ensuring regulatory compliance:

Identifying “hotspots”: Helps businesses clearly know which stage causes the greatest environmental impact in order to prioritize improvements, thereby saving costs and reducing waste.

Expanding the scope of assessment: LCA does not stop at carbon emissions (GHG), but also measures impacts such as ozone depletion, land use, resource depletion, and water consumption.

Supporting marketing and design: Promotes the “Design for Environment (DfE)” strategy, helping products gain a competitive advantage and avoid the risks of “greenwashing”.

Attracting investment: In-depth LCA activities help improve ESG scores, leading to greater interest from investors and stronger customer loyalty.

Software tools supporting LCA

To conduct LCA accurately, businesses often use specialized software such as:

  • SimaPro & GaBi: Suitable for many sectors, including manufacturing, energy, and automotive
  • OpenLCA: A flexible open-source tool for waste management and construction
  • OneClickLCA: Focuses specifically on environmental impact assessment in the construction sector

It can be seen that LCA is not merely a technical process for measuring environmental indicators, but has become a smart business strategy in the green era. Understanding all impacts from “cradle” to “grave” helps businesses not only comply with increasingly stringent international regulations, but also identify opportunities to optimize costs, minimize waste, and improve production processes effectively.

In a market where consumers and investors increasingly prioritize sustainable values, conducting LCA systematically is the clearest proof of a company’s responsibility. This is not only a tool for protecting the environment, but also a “guiding compass” that helps businesses enhance their brand, promote the circular economy, and build a solid competitive advantage in the international market

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Why should businesses transition to a circular economy?

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As the global economy faces increasing pressure from resource scarcity, climate change, and increasingly stringent regulatory requirements, the traditional linear economic model of “take – make – consume – dispose” has revealed significant limitations. In contrast, the circular economy is emerging as an inevitable pathway, enabling businesses to optimize operational performance while creating long-term sustainable value.

Below are the key reasons why businesses should accelerate their transition toward a circular economy model.

  1. Addressing Resource Scarcity Challenges

Demand for raw materials continues to rise, while many non-renewable resources are gradually being depleted. This trend drives up extraction, procurement, and transportation costs, directly affecting business profit margins.

At the same time, dependence on imported raw materials exposes companies to supply chain disruptions and geopolitical uncertainties. A circular economy enables businesses to reuse materials, by-products, and waste generated during production, transforming the “output” of one process into the “input” of another. As a result, companies can reduce reliance on imports and gain greater control over production and business planning.

  1. Enhancing Operational Efficiency and Optimizing Costs

One of the most evident benefits of the circular economy is its ability to generate direct economic value. Rather than viewing waste as a cost burden, this model treats it as a valuable resource that can be recovered and utilized.

    • Reducing production costs: Reusing materials, improving energy efficiency, and minimizing waste help businesses significantly reduce operating expenses, waste treatment costs, and logistics expenditures.
    • Addressing overproduction: The circular economy encourages improved product design, focusing on quality and product lifespan, thereby reducing overproduction in a context of limited resources.
    • Extending asset lifespan: Through maintenance, repair, refurbishment, and remanufacturing, businesses can prolong the useful life of machinery, equipment, and materials, maximizing the value of their investments.

One of the clearest benefits of the circular economy is its ability to generate direct economic value.

  1. Meeting Environmental and Climate Commitments

Greenhouse gas emissions and environmental pollution are global challenges. Transitioning to a circular economy is a critical step for businesses seeking to contribute to the achievement of Net Zero emissions by 2050.

This model helps reduce environmental impacts from the design stage onward by:

    • Using renewable energy and environmentally friendly materials;
    • Minimizing waste and eliminating polluting materials;
    • Protecting ecosystems and biodiversity.

Beyond environmental benefits, these efforts also help businesses build a green brand image, enhance corporate reputation, and strengthen trust among customers and communities.

  1. Strengthening Competitiveness and International Integration

In today’s economy, competitive advantage is no longer based solely on cost but increasingly on sustainability and social responsibility. Many companies have successfully adopted innovative business models, such as the “service instead of product” model. For example, Philips provides lighting services rather than simply selling light bulbs, helping optimize resource use while maintaining long-term customer relationships.

In Vietnam, the environmental regulatory framework continues to evolve, particularly through provisions in the Law on Environmental Protection and Extended Producer Responsibility (EPR) regulations. Businesses are increasingly required to collect, recycle, and manage waste generated by their products. Companies that proactively transition to a circular economy will be better positioned to meet international standards, expand export opportunities, and attract green investment capital.

  1. Creating New Market Opportunities

The circular economy is not only an environmental solution but also a driver of innovation. Businesses can unlock various new opportunities, including:

    • Industrial symbiosis: Collaboration among companies where the waste of one enterprise becomes the raw material for another.
    • Sustainable design: Developing products that are easier to repair, upgrade, and recycle, meeting growing consumer expectations for quality and safety.
    • Resource recovery markets: Collecting and recycling waste into raw materials for new production processes, thereby creating circular value chains.

Conclusion

The transition from a linear economy to a circular economy is no longer a short-term trend but an essential journey toward sustainable business development. Shifting the mindset from “take – make – dispose” to “regenerate and restore” enables businesses to overcome challenges related to resources and environmental pressures while creating new drivers of growth. More broadly, the circular economy contributes positively to the prosperity of society and the national economy as a whole.

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Greenwashing: Spotting fake sustainability claims

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As climate change becomes an increasingly urgent global challenge, green consumption is emerging as a dominant trend. According to surveys, up to 70% of consumers are willing to pay a premium for environmentally friendly products. However, this growing expectation has also created opportunities for a negative phenomenon known as “Greenwashing.”

The Origin of the Term “Greenwashing”

Greenwashing refers to the practice whereby companies exaggerate, misrepresent, or even fabricate environmental commitments in order to create an “eco-friendly” image and attract customers.

The term “greenwashing” first emerged in the 1960s and became more widely recognized after 2015, following the adoption of the Paris Climate Agreement. Many companies pledged carbon neutrality and Net Zero emissions, but some of these commitments were merely marketing claims unsupported by meaningful actions.

Common Forms of Greenwashing Today

Businesses employ a variety of sophisticated tactics to mislead consumers, including:

    • Using vague terminology: Terms such as “natural,” “environmentally friendly,” and “eco-friendly” are often used indiscriminately without supporting evidence or credible certification.
    • Misleading imagery: Green colors or nature-related images (leaves, water droplets, wildlife) are displayed on packaging to create an illusion of sustainability, even when the product contains harmful chemicals.
    • Highlighting a single positive attribute: Companies heavily promote one minor improvement (such as recyclable packaging) while concealing environmentally damaging production processes behind the scenes.
    • Fake certifications: Self-created labels designed to appear professional but lacking recognition from any reputable independent certification body.
    • Misleading data: Publishing vague claims about environmental performance or green growth without clear timelines, methodologies, or scientific evidence.

Greenwashing refers to the practice whereby companies exaggerate, misrepresent, or even fabricate environmental commitments in order to build a favorable image and attract customers.

Major Companies Involved in Greenwashing Scandals

Even multinational corporations have not been immune to greenwashing controversies:

    • Volkswagen (2015): The company became embroiled in a major emissions-cheating scandal after installing software designed to manipulate emissions tests, despite marketing its vehicles as “clean diesel.”
    • McDonald’s: Replaced plastic straws with paper alternatives, but the paper straws proved more difficult to recycle than expected, while the production process continued to consume significant resources.
    • H&M: Its “Conscious” collection was criticized after reports suggested that up to 96% of its sustainability claims lacked sufficient evidence, while the company’s fast-fashion business model continued to generate substantial environmental impacts.
    • Coca-Cola: Faced criticism for promoting its “Life” product line as a greener and healthier alternative, despite containing high sugar levels and despite the company’s continued status as one of the world’s largest plastic polluters.

The Serious Consequences of Greenwashing

Greenwashing is not merely a communications issue – it can lead to significant risks:

    • Loss of trust: Approximately 66% of consumers express skepticism toward corporate environmental claims. Once trust is eroded, consumers may turn away even from companies that genuinely pursue sustainability.
    • Negative impact on purchasing intentions: Research conducted in Vietnam indicates that greenwashing increases consumer skepticism and directly undermines intentions to purchase environmentally friendly products.
    • Legal risks: In the European Union, the Green Claims Directive requires businesses to substantiate environmental claims with scientific evidence. In Vietnam, greenwashing practices may be subject to penalties under the Competition Law and the Law on Protection of Consumer Rights.

How Can Consumers Become More Informed?

Rather than merely appearing green, businesses should pursue genuine transformation to build long-term sustainable value.

To avoid falling into the greenwashing trap, consumers should:

    1. Read labels carefully: Look for credible certifications such as FSC, Energy Star, or Rainforest Alliance.
    2. Be cautious of absolute claims: Phrases such as “100% green” or “completely harmless” are often signs of exaggeration.
    3. Research the company: Evaluate its level of transparency through sustainability reports and supply chain audits.
    4. Distinguish it from “Greenhushing”: Some companies genuinely perform well but remain silent about their sustainability efforts due to concerns about scrutiny. Honest transparency is often more trustworthy than claims of perfection.

Conclusion: Rather than focusing on appearing environmentally friendly, businesses should pursue meaningful transformation to create long-term sustainable value. A culture of transparency and accountability is the key to protecting the planet while maintaining consumer trust in the modern era.

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Businesses must recycle or pay environmental fees based on sales volumes

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Government Decree No. 110/2026/ND-CP, recently issued by the Government, introduces a series of new regulations on recycling responsibilities for manufacturers and importers. The policy will officially take effect on May 25, 2026.

Under the new regulations, enterprises placing packaging, batteries, electronic equipment, lubricants, tires, and related products on the market will be required to either carry out recycling activities themselves or make financial contributions to the Vietnam Environmental Protection Fund.

Strengthening Responsibility for Post-Consumer Waste Management

Vietnam currently generates approximately 3.5 million tonnes of plastic waste annually, yet the recycling rate remains at only around 33%. A significant portion of the remaining waste risks leaking into the environment, placing substantial pressure on waste management systems and contributing to environmental pollution.

In this context, Decree No. 110 is considered an important step toward strengthening the legal framework for Extended Producer Responsibility (EPR), requiring enterprises to play a more active role in the collection and recycling of post-consumer products.

Enterprises must ensure minimum recycling rates based on the total quantity of products placed on the market each year.

Mandatory Recycling Requirements for Multiple Product Categories

The new regulations apply to a wide range of commonly used product categories, including:

  • Paper, plastic, metal, and glass packaging;
  • Mobile phones, computers, printers, and electronic equipment;
  • Batteries, accumulators, tires, lubricants, and similar products.

In addition to direct manufacturers, contract manufacturers and entrusted importers are also subject to recycling obligations.

Specific Recycling Targets Established

Enterprises are required to achieve minimum recycling rates based on the total quantity of products placed on the market each year.

Some notable targets include:

  • Aluminum packaging and rigid PET plastic packaging: 22%;
  • Paper and carton packaging: 20%;
  • Mobile phones: 15%;
  • Computers, printers, and photocopiers: 9%;
  • Rechargeable batteries and lead-acid batteries: 8–15%.

According to the roadmap, these targets will be increased every three years, starting from 2029.

Enterprises May Choose Financial Contributions Instead of Direct Recycling

The Decree allows enterprises to choose between two options for fulfilling their obligations:

Self-Managed Recycling

Enterprises may conduct recycling themselves, hire professional recycling service providers, or authorize intermediary organizations to collect and recycle products on their behalf. Recycling performance reports must be submitted before April 1 each year.

Financial Contribution

If enterprises do not directly undertake recycling activities, they must make financial contributions to the Vietnam Environmental Protection Fund. The contribution amount is calculated based on the volume of products placed on the market and the corresponding recycling cost norm. The payment deadline is April 20 each year.

No Recognition of “Token” Recycling Activities

One notable feature of Decree No. 110 is its clear requirement regarding recycling outputs. Recycling activities must generate materials or products that can be further utilized.

For example, plastic packaging must be recycled into commercial-grade plastic pellets or new products, while glass waste from electronic equipment must be processed into raw materials for construction material manufacturing.

Simple treatment methods such as shredding or incineration for fuel recovery will not be recognized as fulfilling recycling obligations.

Exemptions for Small Enterprises

Certain entities are exempt from recycling obligations, including enterprises with annual revenues below VND 30 billion for covered product groups, and products manufactured for export or temporarily imported for re-export.

Decree No. 110 is considered an important step toward promoting the circular economy and enhancing corporate environmental responsibility in Vietnam.

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VNCPC promotes sustainable agriculture and digital transformation

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On April 6–7, 2026, in Bac Ninh Province, the Vietnam Institute for Research and Development of Rural Occupations (VIRI), in collaboration with the Bac Ninh Farmers’ Union Executive Committee – Farmers’ Support Fund Management Board; Vietnam Cleaner Production Centre Co., Ltd. (VNCPC), together with its partners, the Institute of International Economics and Law (IIEL) and the Institute for Research and Application of Technology (IRAT), organized a training workshop to strengthen the capacity of enterprises, cooperatives, and representatives of the Farmers’ Union in Bac Ninh Province on ESG, emission reduction, and digital transformation in agriculture.

The workshop was organized within the framework of the project “Eco-Fair Women-led Businesses in Green and Circular Agriculture in Vietnam” (Eco-Fair WBs), funded by the European Union. This activity is particularly relevant in the context of the agricultural sector facing an urgent need to transition toward greener, more sustainable development and adapt to the digital transformation trend.

Mr. La Van Doan – Vice Chairman of the Bac Ninh Farmers’ Union, delivering the opening remarks

The workshop aimed to support agricultural production entities in accessing modern development trends while enhancing their management capacity and market competitiveness. The program focused on promoting digital transformation in management and production, as well as disseminating sustainability standards that are increasingly becoming a “passport” for agricultural products to integrate more deeply into domestic and international value chains.

Dr. Le Hai Hung – Director of IRAT, providing guidance on greenhouse gas inventory development

Through a series of thematic sessions, participants were guided on applying green management practices to reduce emissions and use resources more efficiently, contributing to the achievement of Net Zero goals. They were also introduced to cleaner production solutions focusing on energy, water, and material savings in production processes, while receiving updates on Environmental, Social, and Governance (ESG) standards in the context of circular agriculture development.

Dr. Nguyen Thi Thu Hien – President of IIEL, presenting an overview of ESG and Net Zero

Ms. Do Thi Diu, M.Sc. – VNCPC Expert, presenting on resource efficiency and cleaner production

In addition, the workshop emphasized the role of digital technology as a key tool for improving management efficiency and enhancing value chain transparency, particularly in product traceability, an aspect increasingly valued by both markets and consumers. The application of technology not only helps enterprises and cooperatives optimize their operations but also contributes to increasing product value and expanding market access opportunities.

Dr. Nguyen Xuan Khoat – VIRI Expert, sharing insights on sustainability criteria in circular agriculture

Beyond knowledge sharing, the event also created opportunities for participating organizations to access free consultancy and technical support activities under the Eco-Fair WBs project, enabling them to gradually improve their production models toward greater efficiency and sustainability.

Participants receiving certificates upon completion of the training course

With its comprehensive approach combining awareness raising, capacity building, and technical support, the workshop is expected to contribute to accelerating the transition toward green and circular agriculture models at the local level, while strengthening collaboration among stakeholders within the agricultural ecosystem. This is considered an important step toward realizing the sustainable development goals of Vietnam’s agricultural sector in the new era.

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