Sustaining growth amid rising green demands

Business confidence among foreign-invested enterprises in Vietnam remains high and buoyant. This is not only a record-level figure reflecting a full recovery to pre-Covid-19 levels, but also a sign that the period of administrative adjustments and changes in early 2025 has come to a close, with growth constraints gradually being eased. However, whether this positive momentum can be sustained in the near future remains uncertain.

The seminar “Economic Outlook 2026: FDI Enterprises and the Roadmap for Vietnam’s Rise,” organized by the Saigon Times Group, scheduled for April 2, 2026, is expected to shed light on many business unknowns.

In early 2026, the European Chamber of Commerce (EuroCham) released its Q4 2025 survey, showing that the Business Confidence Index (BCI) of European firms rose to 80 points, the highest level in seven years.

Some 68% of respondents expect Vietnam’s economy to remain stable or improve, while 88% expressed optimism about the 2026–2030 period, including 31% who described themselves as “very optimistic.” European businesses also commended ongoing administrative reforms, visa policies, and new regulations, with more than half indicating plans to expand their operations in Vietnam.

At the same time, the Japan External Trade Organization (JETRO) reported similar survey findings. As many as 67.5% of Japanese firms said they were profitable, while 56.9% plan to expand their operations over the next one to two years. These indicators have placed Vietnam at the top among ASEAN markets for two consecutive years.

Meanwhile, the Purchasing Managers’ Index (PMI) compiled by S&P Global rose to 54.3 in February 2026, up from 52.5 in January. The manufacturing recovery has now extended for eight consecutive months, with business confidence reaching its highest level in 41 months.

Andre de Jong, member of EuroCham’s executive board, said the figures were not merely “record highs,” but also a “marginal signal” indicating that business confidence has fully rebounded to pre-Covid-19 levels. He added that these indicators mark the close of the period of adjustment and administrative transformation in early 2025, with growth bottlenecks now gradually being removed.

Are Vietnamese businesses strong enough to overcome barriers?

Nevertheless, behind the peak in the BCI and PMI lies a more fundamental, irreversible reality. The race is no longer for those who hesitate or are slow to restructure. It is not about short-term adjustments, but about a deep transformation of global trade. Low costs and competitive pricing are no longer the top priorities, de Jong emphasized.

Jackson Woo, chief executive officer of SGS Vietnam, an assessment and certification organization, said Vietnamese industries are still “on a seesaw” when it comes to meeting the requirements of the CBAM (Carbon Border Adjustment Mechanism) and the EUDR (European Union Deforestation Regulation).

While manufacturers in Taiwan and Japan have adapted relatively well, supported by robust management systems, Vietnam’s overall level of readiness remains limited, particularly among small and medium-sized enterprises (SMEs). The gap in capacity is evident, as many firms lack systematic response plans or misunderstand the scope and verification criteria of these regulations.

Dr. Woo echoed de Jong’s view, saying the key challenge in 2026 lies in execution discipline rather than awareness. The real gap, he noted, is in data management and process discipline—areas that technology alone cannot address without clearly defined responsibilities.

He added that the most significant barrier is CBAM emissions reporting. The shift from default to verified data in 2026 will require companies to control both direct and indirect emission sources. This is not merely a technical issue, but also a weakness in data governance and operational discipline. Technology can only be effective when responsibilities are clearly assigned and internal processes are well defined.

Businesses are concerned about the cost of setting up systems, but they may face even higher costs if they lack reliable data. From 2026, importers without verified data could be subject to higher CBAM charges, which are projected to exceed 34% by 2034. “Investment in accurate data is not merely about compliance, but a critical step to avoid significant long-term financial losses,” Dr. Woo said.

At the same time, CBAM and EUDR requirements also pose challenges for EU businesses operating in Vietnam. EuroCham’s Q4 2025 BCI report noted that only 25% of European firms have implemented green initiatives, while 37% have piloted emission reduction projects over the past two years. The figures for Vietnamese companies, particularly small and medium-sized enterprises (SMEs), are even lower.

According to a 2024 ESG (environmental, social and governance) implementation report by the Vietnam Chamber of Commerce and Industry, nearly 90% of SMEs in Vietnam have not disclosed environmental information, and 39% have never heard of the ESG concept.

Dr. Woo and de Jong also identified three key shortcomings among Vietnamese businesses entering the EU market: technical expertise, capital, and data. Meanwhile, auditing and consulting firms tend to replace the data factor with policy.

Turning strict barriers into competitive edges

Data transparency remains the “critical weak point” of Vietnamese businesses, likened to going into battle without armor, Dr. Woo said, proposing two types of certification to help firms demonstrate their capabilities to EU partners.

The first is certification for meeting green, clean, or organic standards, which can facilitate faster customs clearance and build trust among European consumers. These include internationally recognized schemes such as the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC), which certify sustainable forest management and chain-of-custody processes for forest-based products such as timber, paper, and packaging, ensuring legal and environmentally responsible sourcing.

The second is system certification, such as ISO 14000 for environmental management, ISO 50001 for energy management, and ISO 14064 for greenhouse gas emissions. These standards help formalize management systems, improve emissions control, and ensure disciplined tracking of product origins.

Dr. Woo emphasized that such certifications are not a “magic solution,” but rather strategic tools to enhance transparency through digitalization, effectively turning stringent EU requirements into competitive advantages. “This is an opportunity for businesses to shed the ‘low-cost’ label associated with Vietnamese goods and move toward a ‘reliable and sustainable’ market segment,” he said.

Green from the factory

It would be incomplete to discuss the green transition without highlighting a notable development in Vietnam’s manufacturing sector: the emergence of eco-industrial parks.

Located more than 30 kilometers from HCMC, Prodezi Long An Company is developing an integrated industrial, urban, and service complex spanning over 500 hectares in Luong Hoa Commune, Tay Ninh Province. The project includes the roughly 400-hectare Prodezi eco-oriented industrial park and the 100-hectare LA Home urban area, with the aim of achieving carbon neutrality.

Truong Khac Nguyen Minh, deputy general director of Prodezi Long An, said green industrial parks are increasingly attracting next-generation investors, particularly multinational corporations. “They are not only looking for production space, but are also placing greater emphasis on sustainability, connectivity, and infrastructure flexibility,” he said.

The two components of Prodezi Long An were launched during 2024–2025, with a focus on green infrastructure, the circular economy, and industrial symbiosis, including shared energy, water, and waste treatment systems to optimize costs and reduce emissions.

Minh said compliance with green standards helps businesses mitigate risks, lower operating costs, and meet the requirements of international partners. This green advantage is also expected to attract high-tech industries such as semiconductors, artificial intelligence, data centers, and electric vehicles.

For the 2026–2030 period, Prodezi plans to complete its service ecosystem in Luong Hoa and replicate the eco-industrial park model. He emphasized that the company’s goal is not expansion in scale, but the replication of a standardized, sustainable model.

According to the Foreign Investment Agency under the Ministry of Finance, by the end of 2025 Vietnam had more than 500 industrial parks, with a total planned area of 145,000 hectares. However, only seven eco-industrial parks are currently operational, located in Ninh Binh, Danang, Can Tho, and Dong Nai.

The Government has set a target for eco-industrial parks to account for 20% of the total by 2030, including both newly developed and converted facilities. Industrial parks currently attract up to 80% of foreign direct investment in the manufacturing sector.

At the same time, the need to relocate aging facilities or upgrade outdated infrastructure in industrial parks in Dong Nai and HCMC is becoming increasingly urgent.

Concluding the discussion on barriers and data, the EuroCham representative offered a forward-looking perspective on Vietnam’s evolving position. If Vietnamese businesses can scale up green performance and master data management, the country will move beyond its role as a “subcontracting factory.”

Andre de Jong said that with consistent operational excellence and a strong commitment to sustainability, Vietnam will not only participate in but also help reshape global supply chains. He emphasized that this transformation will not be driven by sudden leaps or disruptions, but by a solid foundation and a long-term strategic vision spanning decades.