Textile firms urged to go green to attract more credit
While textiles is one of the key industries in Việt Nam with high export revenue, it is also among industries that pose a high environmental and social risk, according to Nguyễn Quốc Hùng, general secretary of Việt Nam Bankers Association.
He was speaking at a seminar on risk assessment and credit extension to textiles on Wednesday.
Hùng said textiles have been affecting water resources and contributing to greenhouse gas emissions as textile production consumes massive amounts of water and energy.
For this reason, the industry has always been under careful assessments of environmental risk by credit institutions during the credit extension process.
To reduce the impact of industrial production on the environment, institutions have granted credit with preferential terms to clients who embark on projects supporting green growth.
By November 2021, 67 credit institutions have been engaged in “green credit”. Total credit to green projects accounted for over 4 per cent of domestic credit, up 0.46 per cent compared to 2020.
Meanwhile, credit to textiles stood at just VNĐ145 trillion (US$6.39 billion), equivalent to approximately 1.5 per cent of domestic credit.
The general secretary urged textile firms to embrace green growth and strictly comply with green regulations on production in order to become more appealing to bank credit, notably green credit.
Hoàng Thị Thanh Nga, head of textile group World Wide Fund For Nature, said a greener industry is crucial to Việt Nam as the country would not be eligible for tariff reduction/exemption under free trade agreements (FTAs) unless it meets the FTAs’ requirements for environmental protection.
Additionally, the Vietnamese government has been tightening regulations on water, energy, and chemicals to observe international agreements on climate change and improve water and energy security. That means the environmental impacts of textile projects will be assessed more closely by local authorities before any investment permit could be granted. Accordingly, green growth should be factored in textile production.
Another reason for green textiles is that more and more foreign partners are committed to sustainable development goals and raising the bar for their supply chains in terms of the environment. If Vietnamese textiles do not follow suit, its partners would find their supply elsewhere.
Traditional competitive advantages that Việt Nam always takes for granted, including low price and low requirements for FDI, are no longer making any difference. To hold ground in the international market, the country should create new competitive advantages by shifting focus to sustainable production, Nga added.
Textiles normally take up a low proportion in banks’ investment portfolio. Credit to the industry always pales in comparison with credit to the real estate or energy industry. Therefore, textiles firms are strongly advised to turn greener to be able to tap into the “green credit” offered by the banking sector. — VNS
Related News
Urging credit flow into production and business sectors
16:19 | 20/09/2024 Finance
Textile and garment industry perseveres in overcoming difficulties and seizing opportunities from the market
08:59 | 20/09/2024 Import-Export
Revising SCT on automobiles must ensure harmony of benefits
14:12 | 02/08/2024 Regulations
Imported raw marterials and fuel rise rapidly
09:41 | 01/08/2024 Import-Export
Latest News
Import and export are expected to reach 800 billion USD
13:32 | 04/11/2024 Import-Export
Fresh coconuts quenching new overseas markets
13:29 | 04/11/2024 Import-Export
Rice exports likely to set new record in 2024
13:25 | 04/11/2024 Import-Export
Vietnamese goods conquer halal market through trust and quality
09:57 | 04/11/2024 Import-Export
More News
Exporters urged to have strategies to take advantage of UKVFTA for expansion
17:33 | 03/11/2024 Import-Export
Fresh coconuts quenching new overseas markets
17:29 | 03/11/2024 Import-Export
Vietnam and UAE trade sees billion-dollar growth
07:15 | 03/11/2024 Import-Export
Sharing responsibility for ensuring security and safety of the supply chain
07:13 | 03/11/2024 Import-Export
Many factors affecting tuna exports in the last months of the year
19:38 | 02/11/2024 Import-Export
Vietnam still dominates Philippine rice import
19:36 | 02/11/2024 Import-Export
Vietnam cements ties with partners to engage in global semiconductor, AI industries
19:35 | 02/11/2024 Import-Export
Aquatic exports expected to rise in year-end despite challenges
19:33 | 02/11/2024 Import-Export
Trade Defense: The Key to Success for Vietnamese Businesses
10:39 | 02/11/2024 Import-Export
Your care
Import and export are expected to reach 800 billion USD
13:32 | 04/11/2024 Import-Export
Fresh coconuts quenching new overseas markets
13:29 | 04/11/2024 Import-Export
Rice exports likely to set new record in 2024
13:25 | 04/11/2024 Import-Export
Vietnamese goods conquer halal market through trust and quality
09:57 | 04/11/2024 Import-Export
Exporters urged to have strategies to take advantage of UKVFTA for expansion
17:33 | 03/11/2024 Import-Export