Digital transformation is emerging as the key driver of Việt Nam’s green shift, empowering businesses to reduce their environmental footprint while enhancing productivity and competitiveness.

As global environmental standards become increasingly stringent, Vietnamese enterprises are under growing pressure to adopt sustainable practices - and digital technology is proving to be the catalyst that enables them to meet these demands and access international markets.

A major challenge for green businesses is managing labour and ensuring workplace safety, especially in high-risk environments such as factories and construction sites.

Addressing this issue, Lê Dương Company has developed the HSAFE system, a wearable device attached to workers’ helmets that tracks vital signs and productivity in real time. The system uses sensors to monitor heart rate, body temperature and location, and can alert workers and supervisors to potential safety hazards.

“HSAFE is not just a safety device – it also functions as a digital personnel file,” said CEO Lê Đình Tuyến. “It allows businesses to manage personnel transparently and improve operational efficiency.”

Beyond the industrial sector, digital transformation is also opening new prospects for agriculture - a sector highly vulnerable to climate change. Agri-tech startup Hachi has implemented hydroponic farming systems powered by the Internet of Things and AI. These systems can automatically monitor and adjust water, light, and nutrient levels to optimise plant growth.

“This model saves up to 70 per cent of water while increasing yields by three to five times compared to traditional methods,” said Hachi CEO Nguyễn Thị Mai Hương. “It is especially well-suited for urban and mountainous areas where arable land is scarce.”

Hachi’s systems incorporate technologies from Israel, Japan and South Korea, marking a significant step in applying global innovations to local agricultural conditions.

According to Phạm Đức Nghiệm, deputy director of the National Agency for Technology Entrepreneurship and Commercialisation Development, Việt Nam is working to develop a green, intelligent and sustainable agriculture sector. While the transformation process requires considerable investment, the long-term benefits - in terms of productivity, climate resilience and market access - are far greater.

Beyond corporations

Green transition is no longer limited to large corporations. Across Việt Nam, co-operatives, small- and-medium sized enterprises, and even individual farmers are becoming active players in the circular economy - a model in which resources are reused and recycled to reduce environmental impact.

One such example is Thiên Phước Hemp Group, which has pioneered the cultivation of AP1, a proprietary strain of hemp. The company has established certified organic farming zones in several provinces and invested in high-tech processing facilities to produce antibacterial, breathable and durable hemp fibres.

In 2018, the startup received US$1 million from the World Bank, via the Ministry of Science and Technology (MoST), to develop sustainable hemp cultivation and processing technologies.

Hemp, which can be harvested up to four times a year for 10 consecutive years, offers a stable source of income for farmers - averaging VNĐ100 million ($4,000) per hectare annually.

What sets Thiên Phước’s model apart is its full-cycle utilisation of the hemp plant. Leaves are used in food products, roots in traditional medicine, stalks in mushroom cultivation and waste materials in soundproofing products. The entire value chain from seed to logistics is digitally managed to ensure traceability and compliance with stringent environmental, social and governance (ESG) standards required by markets in the EU, US, and Japan.

In the central province of Nghệ An, local company Mom Beauty has built a closed-loop green nutrition ecosystem using digital automation. By replacing manual labour with tech-based processing, it reduced its workforce from 10 to three without sacrificing productivity. The majority of its workforce consists of rural women who are trained in digital warehouse management and product tracking.

Products are packaged in biodegradable materials and secondary outputs - such as seed wash water and by-products - are recycled into organic fertilisers, reducing plastic waste and conserving natural resources. Mom Beauty’s efforts earned it the top award at the 2024 'Women Entrepreneurs for Green Transition' competition.

At the recent P4G Summit held in Hà Nội, leaders reaffirmed that green transition and digital transformation are twin pillars of Việt Nam’s development agenda.

Minister of Science and Technology Nguyễn Mạnh Hùng said that Việt Nam was one of the first countries to adopt a national action plan to shift from traditional to green and digital economic models.

“Science, technology, innovation and digital transformation are not just tools but strategic choices for Việt Nam’s sustainable growth,” he said.

“We prioritise disruptive technologies such as hydrogen, next-gen batteries, low-carbon systems and circular economy innovations.”

Encouraging progress

Among digital enablers, AI stands out as the most promising. It is being deployed in diverse sectors - from smart energy grids and intelligent traffic management to agricultural automation and environmental monitoring.

Studies by Boston Consulting Group suggest that AI-driven solutions could reduce global emissions by 5–10 per cent by 2030.

In the energy sector, AI supports the integration of solar and wind power into the national grid. It monitors industrial energy consumption and identifies inefficiencies. In agriculture, AI helps optimise irrigation, fertiliser use and pest control, reducing environmental damage.

Despite encouraging developments, green entrepreneurship in Việt Nam still faces multiple challenges. According to the MoST, only 5–7 per cent of Việt Nam’s more than 4,000 startups are focused on green innovation.

Key barriers include limited access to capital, unclear ESG standards and lack of supportive policies. Experts suggest that the Government should urgently issue a national list of green projects and establish clear criteria so that both businesses and financial institutions can engage transparently.

 

In addition, green credit lines need to offer more favourable terms than conventional loans to incentivise sustainable investments. Clear regulatory frameworks, industry-specific green targets and long-term policy consistency are also crucial.

“Enterprises must take the initiative to adopt green technologies and develop sustainable products,” said Phạm Đức Nghiệm, deputy director of the National Agency for Technological Entrepreneurship and Commercialisation Development. “But the Government must offer tax incentives, green finance, mandatory ESG compliance and workforce training.”

He also advocated for the creation of a national Green Growth Award to honour companies that lead in waste management, energy efficiency and eco-friendly product development. Consumer awareness also needs to improve - as green products gain popularity, they can become a powerful force driving corporate investment in sustainability.

A robust green startup ecosystem will help materialise this vision and align national growth with environmental protection and technological advancement.

 With tighter collaboration between the Government, businesses and research institutions, Việt Nam has the potential to scale green initiatives nationwide - from urban centres to rural farms, and from factory floors to AI labs. VNS