This is an executive summary of our white paper, "Transitioning Towards Plastic Circularity: Vietnam's New Upstream Future".
The severity of the global plastics problem cannot be handled with downstream waste management alone and must be addressed in concert with upstream solutions that tackle waste at its source. These circular solutions provide new business and economic opportunities, meet the demand of consumers seeking sustainable alternatives, and alleviate pressure on developing, down stream waste infrastructure which is desperately lagging, particularly within emerging markets. Circular solutions can have a pronounced and compounded positive impact on reducing waste and pollution, when applied across multiple sectors beyond plastics, including notably within the Vietnam fashion and food/agricultural sectors. These solutions can also contribute a viable and sustainable, new revenue stream for Vietnam's economic growth.
Vietnam has observed explosive economic growth which has caused a dramatic increase in the uptake of plastics (10% increase year-on-year) (Ipsos Business Consulting 2019). With an increasing middle-income class and higher purchasing power, such a great economic success story has come at the expense of the environment. Vietnam’s limited downstream waste management infrastructure compounds the pressure of mismanaged plastics and Vietnam has recognized that there is an urgent need to transition plastics towards circularity.
Regulatory improvements have been initiated in recent years to facilitate this transition including the Environmental Protection Law in 2020 as well as recentCOP26 commitments made by Vietnam in 2021. Vietnam has acknowledged that despite focused efforts on downstream solutions, that alone, these efforts will not be sufficient to manage the level of plastic inflow entering into the system (World Bank 2021). Complimentary upstream solutions provide a pathway for Vietnam towards circularity by offsetting both new plastics inflows and in reducing the level of downstream waste to be managed.
Upstream innovation in Vietnam is rapidly emerging with enterprises and innovators stepping in to become early pioneers of this new sector. The observed ecosystem is diverse with solutions tackling plastics upstream across packaging alternatives, reuse/refill models and biomaterials. Intermediaries, from incubators to investors and government associations, are fostering upstream innovation across the entire startup life cycle.
Despite the formation of a burgeoning and reputable ecosystem, efforts remain siloed, redundant, dispersed and divergent. As these innovators are early movers designing solutions for circular transition, they require multi-stakeholder driven, targeted, curated and longer term interventions to ensure success in achieving scale, impact and sustainability.
The rapid development of the upstream innovation ecosystem in Vietnam highlights the opportunities towards assisting in the swift transition of the country towards circularity. To foster innovation and success in this dynamic landscape, creative partnerships, amongst non-traditional organizations are required to ensure a more intimate level of engagement with early movers.
This type of engagement is often correlated with the venture building approach. As a part of venture building, ESO-focused partnerships and collaborations occur between incubators, universities, accelerators and funders.Multi-stakeholder collaborations, led and supported by locally-driven, unifying and convening organizations, including philanthropic organizations such as theICM Falk Foundation, provide entrepreneurs with flexible, targeted and longer term support including funding opportunities for piloting or scaling and onward, throughout their growth journey toward larger investment. Early stage investments must get creative and offer flexible incentives such as blended financing options, specifically via models such as results-based, small-scale grants to de-risk future investment opportunities.
To read the full report, click here.
