[Research Contribution] Sustainable Manufacturing: A Driving Force for the Green Economy and the Challenges Ahead

4 March, 2026

Keywords: sustainable manufacturing, green economy, environmental protection, emissions reduction

In a context where natural resources are increasingly depleted and the consequences of climate change are becoming ever more pronounced, “sustainable manufacturing” has emerged as a highly promising approach – not only to sustain economic growth but also to protect the environment and enhance quality of life.

Source: https://www.goodnewsfinland.com/en/articles/five-from-finland/2023/sustainable-manufacturing/

According to the United States Environmental Protection Agency (EPA), sustainable manufacturing is the process of creating products through economically efficient processes while minimizing negative environmental impacts and conserving resources (EPA, n.d.).

Although the manufacturing sector plays a central role in the global economy (equivalent to 16% of global GDP), it is also a significant source of emissions (accounting for nearly 20% of carbon emissions) and consumes more than half of the world’s energy (World Economic Forum, 2023). Consequently, “greening” manufacturing is regarded as the key to balancing economic development and environmental protection. In Vietnam, this trend has been integrated into numerous national strategies, particularly through the Green Growth Strategy, which aims to reduce emissions and promote efficient resource use while safeguarding the interests of future generations.

Challenges in the Transition to Sustainable Manufacturing

Beyond the long-term benefits, transforming traditional production models into sustainable manufacturing still encounters considerable barriers.

High Initial Investment Costs

One of the most prominent challenges is cost. To “green” their processes, businesses typically must invest in new machinery and technology or upgrade existing production lines. This “green premium” is substantial, especially for small and medium-sized enterprises (Fictiv, 2023). Although clean technologies offer long-term savings in energy, operational costs, and enhanced brand reputation, many businesses remain concerned about the initially high investment relative to their financial capacity.

Inconsistent Policies and Legal Frameworks

The lack of consistency in regulations related to environmental protection, resource use, and waste management can create legal gaps. Businesses sometimes find it difficult to clearly identify the environmental standards they must meet and the penalties for non-compliance, fostering hesitation when implementing sustainable solutions (Law on Environmental Protection 2020, National Action Program on Sustainable Production and Consumption for 2021–2030). In Vietnam, despite the existence of numerous guiding documents, coordination among regulatory bodies and the rigor of enforcement remain insufficiently aligned.

An Underdeveloped Green Consumer Market

Environmentally friendly consumption behavior (green consumption) serves as a crucial lever driving businesses toward sustainable manufacturing. However, not all consumers are willing to pay higher prices for “green” products. In developed countries, the proportion of consumers purchasing environmentally friendly products is gradually rising (PwC, 2024), yet in Vietnam, while 80% of consumers express interest (Nielsen, 2022), only approximately 12–18% actually choose to purchase such products (Vietnam Association of High-Quality Products, 2024). The primary reasons include higher prices for green products, limited supply, and a lack of consumer trust in the genuine “greenness” of certain products.

Shortage of Skilled Human Resources

To transition production models, the workforce must thoroughly understand new processes, energy management, Industry 4.0 technologies, and Life Cycle Assessment methodologies. A World Economic Forum report indicates that 60% of manufacturing managers identify the need to retrain their workforce to meet sustainability requirements (WEF, 2023). However, in Vietnam, specialized training programs in corporate sustainability management and environmental governance remain scarce, making it challenging for businesses to strengthen their internal capabilities as they pursue sustainable manufacturing.

In this regard, the University of Economics Ho Chi Minh City (UEH) is currently a pioneering institution in specialized training on sustainability management and sustainable finance in Vietnam.

Limitations in Technology and Infrastructure

Many clean production technologies, circular recycling systems, and renewable energy solutions remain nascent and expensive, requiring synchronized infrastructure. For instance, if the infrastructure for storing and transmitting wind and solar energy is underdeveloped, businesses will struggle to access clean energy at scale. Similarly, inefficient logistics lead to high fuel consumption, increasing the carbon footprint across the entire supply chain (Fictiv, 2023).

Solutions to Promote Sustainable Manufacturing

Despite significant challenges, numerous solutions have been and are being proposed to incentivize businesses to transition to green production models.

Government Policy Support

The most effective approach typically combines “the stick and the carrot”: alongside mandatory legal regulations on emissions and waste management, governments can offer tax incentives, subsidized low-interest loans, and green public procurement policies. These mechanisms help bridge the cost gap between clean technologies and traditional production processes, alleviating the initial financial burden on businesses (EPA, n.d.).

Raising Awareness and Building a Sustainable Consumer Market

Beyond the government’s role, transforming consumer behavior holds the key to long-term change. Communication campaigns highlighting the benefits of green products, eco-labels (such as Vietnam Green Label), and promotional programs or price incentives will attract an increasing number of consumers willing to spend for the environment. A thriving sustainable market creates a positive feedback loop: businesses expand green production – costs decrease – consumers gain easier access – green purchasing power grows, allowing the sustainable model to gradually stabilize.

Training and Human Resource Development

Integrating content on clean production, life cycle assessment, and energy management into training programs at universities, colleges, and vocational schools is essential. Businesses should also organize internal training programs (upskilling, reskilling) to enhance employee capabilities. Collaborative programs between businesses and universities or research institutes can help drive technological innovation and equip the workforce with essential skills (World Economic Forum, 2023).

Technology Application and Innovation

Applying advanced technologies such as AI, IoT, and Big Data enables businesses to monitor and optimize production processes, thereby reducing resource and energy waste. Circular economy models are also becoming increasingly prevalent – for example, collecting waste plastic for recycling or utilizing one factory’s waste as raw material for another. According to statistics, 50% of large global enterprises are piloting or scaling the use of green materials, recyclable packaging, and renewable energy (Net Zero Tracker, 2023).

Multi-Stakeholder Collaboration

Sustainable manufacturing demands a concerted effort from governments, businesses, the scientific community, and society at large. Public–private partnerships (PPP) in pilot projects or programs encouraging research and development (R&D) innovation help mitigate capital risk and facilitate knowledge sharing. Businesses should also collaborate with suppliers to ensure a comprehensively sustainable value chain, rather than merely “greening” their internal processes.

Prospects and Future Trends

Looking at the global landscape, increasingly stringent climate commitments and environmental policies are gradually making sustainable manufacturing the new standard. For instance, the European Union plans to implement the Carbon Border Adjustment Mechanism (CBAM), requiring imported goods to bear carbon emission costs, thereby pressuring manufacturers to reduce their emissions. Many multinational corporations have also committed to achieving net-zero emissions within the coming decades (Net Zero Tracker, 2023), driving significant demand for clean technologies, highly skilled human resources, and green supply chains. Unilever, for example, has committed to reducing the environmental impact of its products by 50% by 2030, having already achieved a 32% reduction in CO2 emissions from manufacturing since 2008. Similarly, Apple aims to achieve 100% carbon neutrality across its supply chain and products by 2030, while incorporating recycled materials in its product lines.

In Vietnam, the commitment to achieving net-zero emissions by 2050 places the country on an ambitious trajectory. Major companies such as Vinamilk have adopted ecological farm models powered by solar energy, utilizing biogas from livestock waste to reduce emissions, while TH Group has also distinguished itself with high-tech dairy farms combining solar energy and advanced waste management systems. These examples demonstrate that sustainable manufacturing is not only feasible but also delivers lasting economic and environmental value.

Policies supporting business investment in renewable energy, the development of eco-industrial parks, and workforce training for smart factories all reflect the strong determination of the government and the business community in transitioning to a green economy. The emergence of startups specializing in recycled materials, clean energy, and environmental monitoring technologies also plays an important role in enriching the innovation ecosystem. Naturally, this journey is far from easy. Vietnamese businesses still require capital and technology to keep pace with international standards, while energy infrastructure and logistics remain areas in need of improvement. Nevertheless, thanks to advances in science and technology and increasingly clear policy support, the outlook for sustainable manufacturing in Vietnam is expected to brighten in the near future.

Conclusion

Sustainable manufacturing is not merely the responsibility of individual businesses; it is an urgent imperative for society as a whole in the face of resource depletion and climate change. Although the transition presents numerous challenges, solutions in policy, technology, human resources, and market awareness have been and are becoming increasingly evident. At the macro level, sustainable manufacturing is a critical component of the green growth strategy, ensuring long-term prosperity without sacrificing the living environment. Each stakeholder – from the government and businesses to research institutions and consumers – has a definitive role in driving the “green” production model to become the universal trend of the industry of the future.

This article is produced by the Sustainable Finance Institute of the University of Economics Ho Chi Minh City (UEH SFI) – the first educational organization in Vietnam dedicated to consulting, training, and research in sustainability management, sustainable finance, and related fields. To date, the Institute has achieved numerous successes across all three areas: training, research, and consulting. In particular, the Institute’s Master’s Program in Corporate Sustainability and Environmental Management has attracted an increasingly large number of applicants, earning high recognition from both students and employers. The Institute has also actively participated in international forums; established partnerships with prestigious universities worldwide; and provided consulting services and technology transfer to international organizations such as the International Finance Corporation/World Bank (IFC/WB), Frankfurt School of Finance & Management, the University Network for Strengthening Macro-financial Resilience to Climate and Environmental Change, and the Global Green Growth Institute (GGGI). The Institute has also become one of the five founding members of the Sustainable Finance Committee of EuroCham. Furthermore, with the goal of disseminating knowledge and leading in the fields of sustainability management and sustainable finance in Vietnam, the Institute also focuses on providing: (i) specialized short-term training courses on sustainable finance, impact investing, climate-related financial risk management, sustainable business strategy, and sustainability reporting; (ii) consulting services tailored to the needs of individual businesses, the government, and local authorities on sustainability management.

This article is part of the UEH Research and Applied Knowledge Dissemination Series with the message “Research Contribution For All,” and UEH cordially invites readers to stay tuned for the next edition of UEH Research Insights.

Chân Trang (1)

News and photos: Sustainable Finance Institute, Department of Communications and Partnerships, UEH

Voice: Thanh Kieu

References

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