Sustainability: Vietnam

Euromonitor International
September 2021
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LIST OF CONTENTS AND TABLES

HEADLINES ................................................................................................................................. 1
PROSPECTS ............................................................................................................................... 1
Vietnam plans to expand wind power to ensure stable power supply by 2030 ......................... 1
Weak municipal waste management and rising air pollution .................................................... 1
Forest-rich Vietnam directs more attention towards biodiversity preservation .......................... 2
Water distribution system struggles to meet increasing demand .............................................. 2
Agriculture remains strong despite pandemic disruptions ......................................................... 2
Vietnamese population increasingly vulnerable to water-related natural disasters ................... 3
ENVIRONMENTAL SUSTAINABILITY INDEX ............................................................................. 3
Chart 1 Environmental Sustainability Index: Vietnam ............................................... 3
Chart 2 Global Sustainability Ranking: Vietnam........................................................ 3
Chart 3 Energy Ranking: Vietnam............................................................................. 4
Chart 4 Energy Availability Landscape: Vietnam ...................................................... 4
Chart 5 Energy Efficiency, Security and Equity Landscape: Vietnam ....................... 4
Chart 6 Pollution Ranking: Vietnam .......................................................................... 5
Chart 7 Air Pollution: Vietnam ................................................................................... 6
Chart 8 Waste and Water Pollution Landscape in Vietnam ...................................... 6
Chart 9 Forest and Biodiversity Ranking: Vietnam .................................................... 7
Chart 10 Forest and Biodiversity Landscape: Vietnam ............................................... 7
Chart 11 Water Ranking: Vietnam .............................................................................. 8
Chart 12 Water Availability, Equity and Security Landscape: Vietnam ....................... 9
Chart 13 Water Security and Efficiency Landscape: Vietnam ..................................... 9
Chart 14 Food and Agriculture Ranking: Vietnam ..................................................... 10
Chart 15 Food and Agriculture Landscape: Vietnam ................................................ 10
Chart 16 Role of Agriculture in the Economy: Vietnam ............................................. 11
Chart 17 Environmental Resilience Ranking: Vietnam .............................................. 11
Chart 18 Environmental Resilience Landscape: Vietnam ......................................... 11

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SUSTAINABILITY: VIETNAM
Vietnam ranked 70th in the Environmental Sustainability Index in 2020, the result dragged
down mainly by the prevalent poverty that leads to lower food availability and a lack of adaptive
capabilities in the face of natural disasters. The country has ample freshwater resources and
hydropower accounts for a significant share of electricity generation. However, the municipal
waste pollution that ends up in the country’s rivers poses a threat to drinking water availability.

HEADLINES
▪ Vietnam ranked 70th out of 97 global economies in the Environmental Sustainability Index in
2020, unchanged from the year before
▪ Vietnam ranked 60th in the Energy Sustainability category globally in 2020. During the year,
34.3% of electricity output came from renewables, compared to 34.8% in 2019
▪ Pollution is a critical issue in Vietnam in 2020, with the country ranking 67th globally in the Air
Quality category
▪ Vietnam ranked 56th among 97 global economies in the Forest and Biodiversity pillar in 2020,
compared to 57th the year before
▪ The country ranked 25th globally in the Water pillar in 2020, having adequate water resources
▪ Food is not an easily available and affordable resource for Vietnam’s population, as the
country ranked 70th globally in the Food and Agriculture Availability category
▪ The country is among the least environmentally resilient economies globally; Vietnam ranked
82nd out of 97 selected countries in the global World Risk Index in 2020.

PROSPECTS

Vietnam plans to expand wind power to ensure stable power supply by

2030
Vietnam ranked 62nd out of 97 countries globally in the Energy pillar, performing worst in the
Energy Equity category, where the country ranked 73rd. Stimulated by robust economic growth
and increasing manufacturing investment in the country, Vietnam remains challenged by fast-
paced energy demand growth, as the country is struggling to meet this demand with adequate
capacities. As a result, Vietnam is becoming increasingly dependent on imported energy to
support the country’s economic growth. In 2020, the government stated that the country would
need investment of USD96 billion for new power plants and USD37.3 billion for power grid
infrastructure by 2030 to keep up with rising power demand. In February 2021, the government
has released a draft of the country’s latest national power development plan, detailing the
expansion of wind and solar capacities, prioritisation to enhancing grid infrastructure. The goal
for solar capacity is 18.6GW and wind 18GW by 2030, up from 16.6GW and 0.6GW,
respectively, in 2020. While the proportion of wind, solar and LNG power is set to increase,
Vietnam is also seeking to reduce dependence on coal-powered electricity.

Weak municipal waste management and rising air pollution

Vietnam ranked 13th out of 18 in the Asia Pacific region in the Pollution pillar, as the country
faces elevated air and water pollution, while a lack of basic waste collection and recycling
services harm the domestic and global environment. Unfortunately, compliance with costly
environmental standards in Vietnam still remains weak and, for example, municipal solid waste

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management continues to loom as a major issue. Regular waste collection services remain
unavailable for many Vietnamese communities. As a result, the Mekong river is among the top
impactful sources of global marine litter globally, leading to the Vietnamese rank of 71st in 2020
in the Municipal Waste category out of 97 economies. To combat rising air pollution, the
Vietnamese government approved the Air Quality Action Plan 2020, with targets for 2025. The
action plan lays out a set of measures to be taken, in order to improve the current situation,
such as using emission inventories to identify the largest pollution sources and gain information
on further actions, including taxation, emission treatment systems and transport restrictions.

Forest-rich Vietnam directs more attention towards biodiversity

preservation
Vietnam is rich with forest area, and forestry plays a major role in the country's economy,
ranking seventh out of 16 in the Asia Pacific region in the Forest and Biodiversity pillar, with best
performance in the Forest and Biodiversity Availability category. In 2020, forest land area
accounted for 47.3% of total land area in Vietnam, compared to 47.1% the year before.
However, timber exports and other industrial activities have been leading to high deforestation
and loss of biodiversity. In 2020, Vietnam’s biodiversity security ranked low, as the share of
protected terrestrial and marine areas in the total land area was significantly below global and
regional numbers. In order to shift the trend, the country is employing various initiatives aimed to
reduce biodiversity loss. For example, in 2019, the government approved a forest protection,
restoration and development programme, in order to increase Central Highlands’ forest cover to
49.2% by 2030, up from the estimated 16.8% in 2020. In 2020, the government issued a
directive banning wildlife imports and ban on the sale of protected wildlife at wildlife markets.
Nevertheless, the directive did not introduce new laws or regulations, and rather is to be
executed by improving enforcement of existing rules and though stricter punishments for
violations.

Water distribution system struggles to meet increasing demand

Vietnam ranked fourth out of 16 in the Asia Pacific region in the Water pillar, performing best
in the Water Availability category, as the country receives reliable precipitation levels that feed
into the country’s rivers. However, as the rivers originate outside Vietnam’s territory, the country
is considered highly dependent on external resources for water supply. In 2020, external water
resources amounted to 59.0% of Vietnam’s total renewable water resources. Moreover, water
resources are unevenly distributed over the country's regions, leading to parts of the country
becoming water stressed - in 2020, 3.7% of population did not have access to clean drinking
water and 12.7% to improved sanitation. Furthermore, inefficient agricultural irrigation systems
and water distribution networks result in one of the lowest water productivity figures among
global economies. Lack of sanitation and freshwater accessibility also poses additional threats
during the COVID-19 global pandemic, where regular washing of hands gains even more
importance.

Agriculture remains strong despite pandemic disruptions

Agriculture is one of the main economic pillars for Vietnam, providing both employment for
roughly a third of the Vietnamese population and accounting for a substantial part of the
country's gross value added in 2020. The country ranked sixth out of 16 in the Asia Pacific
region in the Food and Agriculture pillar in 2020, however domestic food availability ranks
among the lowest-third countries in a global context. In 2020, spending on food stood at 30.6%
of total average consumer expenditure in Vietnam, compared to 30.0% the year before.
Increasing water productivity and stimulating targeted crop production hold potential to further

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advance the agricultural sector’s production yields. While COVID-19 posed challenges for the
majority of the country’s industries, Vietnamese farmers managed to sustain strong production
levels during 2020, even managing to increase their rice output and export revenues.

Vietnamese population increasingly vulnerable to water-related natural

disasters
Vietnam is suspectable to various natural hazards, such as floods, droughts, earthquakes,
landslides and typhoons. In 2020, Vietnam ranked 15th out of 16 in the Asia Pacific region and
88th out of 97 countries globally in the Environmental Resilience pillar, and the country was
estimated at 10% risk of disasters that arise directly from extreme natural events, according to
the World Risk report 2020. During the year, the country experienced severe storms, typhoons
and subsequent flooding, causing USD1.3 billion in damage and killing nearly 200 Vietnamese
citizens. Environmental resilience is further threatened by the human impact on the natural
environment, such as procurement of sand from the Mekong river delta riverbed and
construction and development in coastal regions, destroying mangrove forests that act as a
storm shield.

ENVIRONMENTAL SUSTAINABILITY INDEX

The environmental sustainability of a country is critical for businesses, due to their reliance on
natural capital for their operations and success. The Environmental Sustainability Index is a
benchmarking tool to evaluate the environmental sustainability performance of 97 markets,
which in 2020 represented 89.1% of the world’s population and 97.2% of global GDP. The index
aggregates indicators in six key pillars that are at the core of sustainable development and
provides an easy-to-understand country “scoring” system to quickly identify country-specific
sustainability risks and opportunities.

Chart 1 Environmental Sustainability Index: Vietnam

Source: Euromonitor International from the Environmental Sustainability Index

Note: The index ranks 97 countries globally and 18 countries regionally (Asia Pacific)

Chart 2 Global Sustainability Ranking: Vietnam

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Source: Euromonitor International from the Environmental Sustainability Index

Chart 3 Energy Ranking: Vietnam

Source: Euromonitor International from International Energy Association (IEA)/BP Amoco, BP Statistical Review
of World Energy, Environmental Sustainability Index.
Note: The index ranks 97 countries globally and 18 countries regionally (Asia Pacific)

Chart 4 Energy Availability Landscape: Vietnam

Source: Euromonitor International from International Energy Association (IEA)/BP Amoco, BP Statistical Review
of World Energy

Chart 5 Energy Efficiency, Security and Equity Landscape: Vietnam

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Source: Euromonitor International from International Energy Association (IEA)/BP Amoco, BP Statistical Review
of World Energy

Chart 6 Pollution Ranking: Vietnam

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Source: Euromonitor International from Energy Information Administration of the US Government/International

Energy Agency/UN/World Bank/EEA/OECD, UN Food and Agriculture Organization (FAOSTAT) and
Environmental Sustainability Index
Note: The index ranks 97 countries globally and 18 countries regionally (Asia Pacific)

Chart 7 Air Pollution: Vietnam

Source: Administration of the US Government/International Energy Agency/UN/World Bank/EEA/OECD, UN

Food and Agriculture Organization (FAOSTAT)

Chart 8 Waste and Water Pollution Landscape in Vietnam

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Source: Administration of the US Government/International Energy Agency/UN/World Bank/EEA/OECD, UN

Food and Agriculture Organization (FAOSTAT)

Chart 9 Forest and Biodiversity Ranking: Vietnam

Source: Euromonitor International from UN Food and Agriculture Organization (FAOSTAT), Millennium
Development Goals Indicators Database at United Nations, World Resources Institute (WRI) and
Environmental Sustainability Index
Note: The index ranks 97 countries globally and 18 countries regionally (Asia Pacific)

Chart 10 Forest and Biodiversity Landscape: Vietnam

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Source: Euromonitor International from UN Food and Agriculture Organization (FAOSTAT), Millennium
Development Goals Indicators Database at United Nations, World Resources Institute (WRI) and
Environmental Sustainability Index

Chart 11 Water Ranking: Vietnam

Source: Euromonitor International from World Bank/UN AQUASTAT, NOAA NCEI (National Oceanic and
Atmospheric Administration's National Centers for Environmental Information) and Environmental
Sustainability Index
Note: The index ranks 97 countries globally and 18 countries regionally (Asia Pacific)

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Chart 12 Water Availability, Equity and Security Landscape: Vietnam

Source: Euromonitor International from World Bank/UN AQUASTAT, NOAA NCEI (National Oceanic and
Atmospheric Administration's National Centers for Environmental Information)

Chart 13 Water Security and Efficiency Landscape: Vietnam

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Source: Euromonitor International from World Bank/UN AQUASTAT, NOAA NCEI (National Oceanic and
Atmospheric Administration's National Centers for Environmental

Chart 14 Food and Agriculture Ranking: Vietnam

Source: Euromonitor International from UN Food and Agriculture Organization (FAOSTAT)/International

Federation of Organic Agriculture Movements (IFOAM)/Research Institute of Organic Agriculture FiBL
and Environmental Sustainability Index
Note: The index ranks 97 countries globally and 18 countries regionally (Asia Pacific)

Chart 15 Food and Agriculture Landscape: Vietnam

Source: Euromonitor International from UN Food and Agriculture Organization (FAOSTAT)/International

Federation of Organic

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Agriculture Movements (IFOAM)/Research Institute of Organic Agriculture FiBL

Chart 16 Role of Agriculture in the Economy: Vietnam

Source: Euromonitor International from UN Food and Agriculture Organization (FAOSTAT)/International

Federation of Organic Agriculture Movements (IFOAM)/Research Institute of Organic Agriculture FiBL

Chart 17 Environmental Resilience Ranking: Vietnam

Source: Euromonitor International from NOAA NCEI (National Oceanic and Atmospheric Administration's
National Centers for Environmental Information), IFHV (Institute for International Law of Peace and
Armed Conflict of Ruhr-University Bochum, UNU-EHS and Environmental Sustainability Index
Note: The index ranks 97 countries globally and 18 countries regionally (Asia Pacific)

Chart 18 Environmental Resilience Landscape: Vietnam

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Source: Euromonitor International from NOAA NCEI (National Oceanic and Atmospheric Administration's
National Centers for Environmental Information), IFHV (Institute for International Law of Peace and
Armed Conflict of Ruhr-University Bochum, UNU-EHS and Environmental Sustainability Index
Note: World Risk Index ranks 1 as most risky and 180 as least risky

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