Race to the Top is governed by two stakeholder groups. The Global Steering Group provides strategic guidance, and the PPP group creates a public-private platform within Vietnam to embed the program locally. IDH convenes companies, governments, and others in public-private partnerships. Together we drive green and inclusive growth at scale in the apparel and footwear sectors, by driving and co-funding the Race to the Top program. Race to the Top is a pre-competitive, locally owned multi-stakeholder initiative, that aims to reshape Vietnam’s apparel and footwear sector by promoting and enabling embedded sustainable (financial, social and environmental) manufacturing practices. Race to the Top is a collaborative effort between the Vietnamese government, the Vietnamese apparel and footwear industry, global consumer brands, international organizations, and civil society organizations. Working toward long-lasting sustainable performance throughout the sector, its added value resides in broad stakeholder commitment and collaboration. Stakeholder commitment and collaboration, as well as stakeholders’ various roles and activities, contribute to Race to the Top’s innovative character. Its interrelated priorities – streamlining assessments, referencing environmental best practices, improving worker management dialogue, sustainable sourcing, and creating access to capital for improvement activities and sustainably operating factories – were determined by the stakeholders involved in Race to the Top, and result in an innovative plan of action that deals with the challenges faced by the industry. Contact details Nguyen Mai Ahn [email protected]Sibbe Krol [email protected]Race to the Top The Apparel & Footwear Industry in Vietnam Scaling sustainable manufacturing practices in Vietnam’s apparel & footwear industry Better Work Sustainable Apparel Coalition (SAC) International Finance Corporation (IFC) Vietnam Textile and Apparel Association (VITAS) Vietnam Leather, Footwear and Handbag Association (LEFASO) Cotton Association (VCOSA) IDH, The Sustainable Trade Initiative Vietnamese Ministry of Industry and Trade Vietnamese Ministry of Labour, Invalids & Social Affairs Vietnamese Ministry of Natural Resources and Environment Ministry of Foreign Affairs of Denmark P4G Kingdom of the Netherlands USAID Partners Vietnam is the world’s number 4 exporter of apparel and footwear products. Employing 2.5 million workers, of which 80% are women, the industry is a key source of industrial employment for the country. In addition, it is the second biggest export industry. A negotiated Free Trade Agreement with the European Union, and increases in manufacturing costs in China cause Vietnam’s already rapid growth in apparel and footwear production to dramatically increase. On the ground this means an expansion in the number of factories and mills operating in Vietnam. There is significant opportunity to provide incentives for sustainable investment. This coincides with the Vietnamese Government’s plans for continuous improvement of the apparel sector for 2015-2020. Private Partners Other Partners Public Partners (technical advisor) SAITEX
Transcript
Race to the Top is governed by two stakeholder groups. The Global Steering Group provides strategic guidance, and the PPP group creates a public-private platform within Vietnam to embed the program locally. IDH convenes companies, governments, and others in public-private partnerships. Together we drive green and inclusive growth at scale in the apparel and footwear sectors, by driving and co-funding the Race to the Top program.
Race to the Top is a pre-competitive, locally owned multi-stakeholder initiative, that aims to reshape Vietnam’s apparel and footwear sector by promoting and enabling embedded sustainable (financial, social and environmental) manufacturing practices.
Race to the Top is a collaborative effort between the Vietnamese government, the Vietnamese apparel and footwear industry, global consumer brands, international organizations, and civil society organizations. Working toward long-lasting sustainable performance throughout the sector, its added value resides in broad stakeholder commitment and collaboration.
Stakeholder commitment and collaboration, as well as stakeholders’ various roles and activities, contribute to Race to the Top’s innovative character. Its interrelated priorities – streamlining assessments, referencing environmental best practices, improving worker management dialogue, sustainable sourcing, and creating access to capital for improvement activities and sustainably operating factories – were determined by the stakeholders involved in Race to the Top, and result in an innovative plan of action that deals with the challenges faced by the industry.
Sustainable Apparel Coalition (SAC)International Finance Corporation (IFC)Vietnam Textile and Apparel Association (VITAS)Vietnam Leather, Footwear and Handbag Association (LEFASO) Cotton Association (VCOSA) IDH, The Sustainable Trade Initiative
Vietnamese Ministry of Industry and TradeVietnamese Ministry of Labour, Invalids & Social Affairs Vietnamese Ministry of Natural Resources and Environment Ministry of Foreign Affairs of DenmarkP4GKingdom of the NetherlandsUSAID
Partners
Vietnam is the world’s number 4 exporter of apparel and footwear products. Employing 2.5 million workers, of which 80% are women, the industry is a key source of industrial employment for the country.
In addition, it is the second biggest export industry. A negotiated Free Trade Agreement with the European Union, and increases in manufacturing costs in China cause Vietnam’s already rapid growth in apparel and footwear production to dramatically increase.
On the ground this means an expansion in the number of factories and mills operating in Vietnam. There is significant opportunity to provide incentives for sustainable investment.
This coincides with the Vietnamese Government’s plans for continuous improvement of the apparel sector for 2015-2020.
Private Partners
Other Partners
Public Partners
(technical advisor)
SAITEX
The Race to the Top program aims to catalyze the growth and expansion of a socially just and environmentally sustainable apparel and footwear industry. The program is built around four pillars:
The social solutions will be piloted and developed to be used in a variety of facilities. By combining productivity/lean components with worker management dialogue, improvements on social performance, worker satisfaction, worker retention, and productivity can be achieved.
The environmental solutions will be rolled out in different components. Programs are targeting existing mills and factories with environmental and financial efficiency improvements while also informing and co-creating sustainable policies to address the challenges of the sector and to introduce international best practices.
Proving and improving the (economic, societal, reputational) benefits of a sustainable apparel industry for both the government and the sector
Creating a supportive policy and regulatory environment for sustainable apparel production
Improving the business rationale for manufacturers and mills to invest in sustainable apparel production
Creating cost-efficiencies by coordinated and innovative interventions at country-level
4 Pillars
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Race to the Top catalyzes sustainable growth through both direct capacity building, and creating the enabling environment for scale in the sector and beyond.
The program's first developed pilots demonstrated the business case for sustainable production. (see below). Meanwhile, the program's Public Private Platform helps disseminate the learnings to the wider industry, uses these sustainable business practices to inform policy and guidelines, and fuels the debate on further enabling sustainability through new projects, financial tools, and additional partnerships.
The work done by the program is increasingly handed over from the Global Steering Group to the Public Private Platform, boosting local ownership and continuous improvement on the ground. This platform launches projects such as a collaboration with the Ministry of the Environment on protecting the environment from hazardous chemicals.
When the vision behind Race to the Top has been proofed in Vietnam, its best working components can be replicated in other countries with quickly emerging apparel and footwear sectors, such as Ethiopia or Myanmar.
Approach
Environmental Business CaseBusiness case examples can be seen when looking at a number of the first textile mills going through the program. These show substantial savings, both in environmental and financial results.
See the infographic below for more details.
The productivity trainings serve a dual purpose:
• Improving factory performance, boosting profitability allowing for improving working conditions
• Building trust between workers and management while collaborating on optimizing processes
Worker engagement and productivity Business Case
Work in factories in Electronics, Apparel, and Footwear has demonstrated that with a combination of productivity and worker engagement training, both profitability and working conditions improve. Worker satisfaction improves, thus worker turnover is reduced and production is optimized, creating a win-win for workers & management.
The first factories graduating from the program demonstrated for example a decline in monthly worker turnover from 10% to 6%.
By setting up lasting systems for engagement, the Race to the Top worker engagment project delivers long-term benefit, with the first factories graduating showing still full use of the system developed and recognition of its benefits by 85% of the workers two years after initial implementation.
