Towards a generation of green and sustainable enterprises - skills matter

Current data and analysis suggest that greenhouse gases need to be reduced significantly if we are to have a chance of staying below an average temperature of over 2 degrees Celsius. Many countries, companies and their subsidiaries and value chains have all agreed to contribute to commitments to cut such emissions to as close to zero as possible. In Vietnam, many companies have been carrying out research on green and cleaner production, not only to contribute to emissions reduction, but also because it is now a requirement in major trade agreements. These agreements require enterprises to place sustainability as part of their operation and put emphasis on the triple bottom line of “people, planet and profit.”

Environmental toll of textile production: pollution and waste

Vietnam is one of the biggest garment exporters in the world. The sector is a key contributor to the national economy, which accounts for 12 - 16% of the total national exports (for example, $44 billion in export revenue in 2022, accounting for 12% of the total exports). This is also a sector that creates jobs for 2.8 million workers, of which nearly 80% are women. Textiles and garments have played an important role in fostering lapour mobility and enabling economic restructuring. Nevertheless, such production is also a substantial source of pollution. Globally, the fashion industry is the second most polluting industry after the oil and gas sector. The textile and garment industry is responsible for 20% of global clean water pollution from dyeing and finishing products, and 10% of global carbon emissions. 3/5 of all clothes. Are thrown away within a single year of purchase. And unsold clothing totals billions of dollars globally each year.

Meanwhile, a majority of textile and garment enterprises in Vietnam are small or medium in size. They mostly focus on low-cost manufacturing with high reliance on imported raw materials with traditional technology and limited investment in environmental protection measures. At the same time, the country has increased its participation in global trade by signing a number of free trade agreements with the UK, EU and others. These agreements account for a large proportion of the world market share in textiles and garments and are critical to propelling the national industry in moving forward in the global value chains. In order to benefit from these new advantages. Such as tax incentives, Vietnamese textile and garment products must meet the requirements for origin and other due diligence, such as social, labour and Environmental Protection set by European and other countries.

The need for green production

The situation reaffirms the critical importance of greening the industry's production chains to enable the sector to be more competitive and sustainable. The shift to green production is also on the rise, along with other mega trends like technological advances, demographic shifts in global challenges such as the impact of climate change. Today, the world sees the need for more sustainable and resilient industries as part of economic recovery, within this context there is a growing demand for skilled workers, especially those with STEM backgrounds and ICT skills. The rise of green production requires new clean, green, and more resource efficient technologies, business models and production processes. That aimed to lessen industries’, impact on the environment and better protect workers, health and safety.

More recently such industries have begun to adopt circular economy approaches to reduce the dependence on raw materials and increase the reuse, repair and recycling of materials to produce new textiles and clothing. These approaches require the sector to invest more in higher value-added production stages, leading to the increasing need for up-to-date and higher levels of skills by workers.

The need for reskilling and upskilling

Currently, the proportion of trained workers with degrees and certificates in Vietnam only accounts for 26.8% of the total workforce. More concretely. A high percentage of textile and garment sector workers are unskilled, untrained, or only trained for less than three months (accounting for 79% in 2020), while enterprises put inadequate investment in workers’ skills due to limited financial resources and awareness. These both pose challenges and opportunities for industries to upskill workers to respond to the need for high quality human resources for greener and more sustainable production.

The adoption of the new development strategy for textiles, garments and footwear to 2030 with a vision to 2035 outlines human resources development is one of the key priorities. This goes together with the issuance of a directive on innovation, development and improvement of the quality of vocational education and training to 2030, as well as a resolution on the development of a flexible, modern and sustainable labour market. In tandem, they shed light on addressing skills gaps and skills mismatches in the country.

This momentum also shows Vietnam's strong commitment to developing high quality human resources to increase labour productivity and national competitiveness, and to respond to social economic recovery and development. Strengthening The skills of the workforce is also one of the key elements in achieving the future sustainable vision of that excellent garment sector. A better understanding of current and future skills needs can guide the sector's investment in human resources development and facilitate linking, training and productivity growth. It also helps workers to both enhance their employability and support their career progression and work transitions. To succeed in the green transition, reskilling and upskilling measures will be required at all levels from low-skilled to high-skilled occupations. Jobs in the green transition to sustainable economies require workers to have both technical skills and core (soft) employability skills, with some examples such as environmental awareness, analytical skills, adaptability and resilience, teamwork, communication and leadership skills and more besides.

The ILO guidelines for just transition towards environmentally sustainable economies and societies from 2015 highlight the importance of inclusive skills development, but other measures will be equally important. A comprehensive approach should also include social dialogue, active labour market policies, social protection, counselling and effective labour market institutions to provide job-matching and career counselling services. The ILO emphasises the importance of skills needs, anticipation and active employer worker engagement in vocational education and training so that workers have the skills needed now and in the future. This is critical to ensure that industries, including the textile and garments sector, are more resilient, competitive and sustainable, improving the prospect of creating more and better quality jobs.