The concept refers to an economic model aimed at eliminating waste and continual use of resources. It implies the creation of a closed system that reuses, shares, repairs, remakes and recycles, minimizing the use of resource inputs and the creation of waste, pollution and emissions.

The circular economy and green economy, important factors in sustainable development, featured prominently on the agenda at a recent national conference.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said sustainable development has become the mantra of the modern world and a foundation of the interaction between nations. It was a bridge linking humans with each other, and a passport to enter the global market, he said.

"Leaving a 'green footprint' on the global economic map is the trait of an ethical business. Free trade agreements such as CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and EVFTA (EU-Vietnam Free Trade Agreement) are also designed based on this foundation."

Prime Minister Nguyen Xuan Phuc said at the conference he believed sustainable development was not only an urgent need but also an essential trend in social evolution. "Essential means if you go against it, you will fail," the PM said.

Prime Minster Nguyen Xuan Phuc had a speech at the convention on September 12th.

Globally, leading corporations are gradually switching to a circular model. For instance, Swedish furniture company IKEA is committed to fully switching to the circular economy by 2030, while Lego aims to use vegan plastic and Carlsberg has improved its packaging to reduce the amount of plastic.

France’s Schneider Electric gets 12 percent of its revenues from the circular economy, and expects to save 100,000 tons of resources between 2018 and 2020, the conference heard.

With environmental concerns growing in the society, a switch to the circular economy model was prudent, said Do Thai Vuong, vice president of Unilever Vietnam. 

Other speakers noted that in Vietnam, some banks and foreign companies were leading the way in embracing the green and circular economy models.

HDBank was mentioned as a typical provider of green credit in the country. Its lending to renewable energy projects has reached VND10 trillion ($430 million) this year and is expected to increase to VND16 trillion by 2020. As of August 31, its lending for solar energy projects was worth VND 9.8 trillion.

Le Ngoc Lam, deputy head of operations at the state-owned bank BIDV, proposed that the government initiates programs providing preferential credit for green projects, those that protect the environment and are energy efficient.

The central bank should direct banks on how to treat projects that adversely affect the environment, such as increasing loan interest rates, he said.

But a circular economy remains a new concept to Vietnamese enterprises, especially small and medium ones.

Nguyen Quang Vinh, general secretary of the VCCI and vice chairman of the VCCI's Sustainable Development Businesses Council, said this lack of familiarity not only risks causing a shortage of resources and price volatility, but would also affect a company's sustainable development.

PM Phuc said the government encourages adoption of the circular economy model in production and consumption to create a non-disposal economy model. 

In 2016 the government had approved a national program on sustainable production and consumption but its impact has been limited.