Mekong Sustainable Manufacturing Alliance (The Alliance)
In 2020, ISC established the Mekong Sustainable Manufacturing Alliance (The Alliance) in partnership with ELEVATE and the Asian Institute for Technology with funding from the United States Agency for International Development (USAID). The Alliance partners with local factories, while engaging multinational brands, to support the implementation of Environmental, Social, and Governance (ESG) standards in the Mekong’s multi-sector manufacturing region.
Why Adopt ESG Standards?
Factories in the Mekong region are at a crossroads. Business owners face a choice between adopting ESG standards that will increase sustainability and make them more competitive in the international market or employing lower-cost, but ultimately, counterproductive practices that compromise natural resources, the health and safety of factory workers, and the well-being of surrounding communities.
ESG interventions generate a positive return on investment (ROI) by enabling manufacturers to meet global buyers’ sourcing standards, lowering operating costs, and/or increasing productivity. The manufacturing sector has tremendous potential to set the region on a sustainable development path if obstacles blocking manufacturers’ adoption of ESG standards can be removed. These obstacles include manufacturers’ limited awareness and understanding of the positive ROI that ESG investments generate, their lack of knowledge and skills required to execute ESG improvements, and their inability to access ESG financing.
How We Work
The Alliance employs a multi-pronged strategy to engage directly with local factories in Cambodia, Thailand, and Vietnam with the goal of creating a larger ecosystem of manufacturers that support continuous improvement and sustainability.
Our multi-pronged approach includes:
- Tailored technical assistance in implementing decarbonization solutions to help reduce GHG emissions, and driving improvement in gender, social and governance solutions
- Capacity-building projects broaden factory management’s knowledge in energy efficiency, renewable energy, and in creating a respectful workplace
- Facilitating regional dialogues, industry-level exchanges of best practices and collaborative actions on ESG-related topics, including but not limited to decarbonization solutions, and sustainable finance.
This powerful, multi-pronged approach catalyzes market-driven choices by factories to improve their ESG standards. It enables manufacturers, in coordination with the global brands they supply, to adopt climate-smart and socially-compliant technologies and practices that result in greener and safer production. Moreover, it demonstrates to factories that environment, health, and safety improvements can go hand-in-hand with improved competitiveness and profitability, thus fostering the region’s economic growth and supporting its journey to self-reliance.
Sustainable Supply Chain Meetings
In 2023, the fashion industry will significantly contribute to energy use and greenhouse gas. The industry’s ecological footprint is caused by high energy, water, and chemical use. To advance a more sustainable, equitable supply chain, the Alliance brings together clothing and footwear brands, textile manufacturers, climate action organizations, policy experts, and other leaders for convenings throughout the Mekong region. Throughout 2023, sustainable supply chain meetings will be held in Cambodia, Thailand, and Vietnam to exchange knowledge and best practices on technological solutions and biomass with leading brands like H&M Group, The GAP, and Adidas.
Sustainable Biomass Guidelines & Risk Assessment
The growing impact of the fashion industry’s (within Southeast Asia and globally) commitments to carbon neutrality and the use of renewable energy from leading apparel brands have shed light upon sustainability challenges in fuel-switching to biomass in operations.
To help aid the process, the Alliance is developing Sustainable Biomass Guidelines and an ESG Risk Assessment tool to provide an understanding of the different biomass types and the necessary tools for clothing and footwear manufacturers (such as Tier 1 and Tier 2 factory owners) to perform a first screening when sourcing biomass for energy use. The guidelines will help brands and manufacturers assess the sustainability of biomass throughout the value chain.
We Need Your Feedback
The Alliance is currently accepting public feedback on the Sustainable Biomass Guidelines. All feedback and personal details will be kept confidential. They will only be viewed and utilized by USAID, ISC, and ERM to develop the Sustainable Biomass Guidelines.
Provide your comments by April 10, 2023:
