When Manufacturing Moves and Your Climate Strategy Doesn’t 

“Can I meet my sustainability goals while shifting my manufacturing footprint to low-cost countries?”  

A member of the Zero100 community asked me this recently, point-blank. It’s not the first time I’ve heard this question from leaders – and it won’t be the last.  

The question reflects the tension many operations leaders are now facing: how to maintain momentum on emissions reduction while fundamentally reshaping where and how they manufacture. These leaders have spent years making real progress in the US and EU, where renewable energy is accessible, incentives are mature, and suppliers are aligned on climate commitments. 

But as production shifts to emerging Asian manufacturing hubs like Vietnam, Indonesia, and India – following decades of manufacturing in China – that progress suddenly feels fragile. The energy systems are different. The infrastructure isn’t there yet. And the playbook that worked in developed markets doesn't simply translate. 

A Different Operational Reality  

A growing share of global electronics, consumer goods, and footwear & apparel manufacturing now sits in Vietnam, Indonesia, and India. In fact, Zero100 data shows a 774% increase in electronics imported from Vietnam to the US between 2019 and 2024.

These countries have become essential to scale, cost, and resilience, but renewable access is inconsistent. Energy markets are still forming. Coal remains the backbone of many national grids. Leaders who once felt confident in their decarbonization roadmaps are now wondering whether the success they achieved in the West can be repeated in environments where the infrastructure is still catching up. 

In Practice 

Several global footwear and apparel brands have set ambitious climate and renewable-energy targets, relying heavily on Vietnamese suppliers. 

Many of these factories are eager to align with brand commitments by sourcing cleaner electricity or installing rooftop solar. However, their progress is constrained by a strained grid, limited transmission capacity, and an underdeveloped framework for corporate power purchase agreements.  

Regulatory uncertainty since the end of Vietnam’s initial solar incentives has slowed new projects and grid connections. As a result, even when suppliers are willing to invest in clean power, they often cannot access enough renewable electricity to meaningfully shift their energy mix. Policy ambition and corporate demand both exist, but the infrastructure and market mechanisms needed for broad adoption are still being built. 

Indonesia faces its own version of this challenge. Many factories depend on the government-owned, fossil fuel-heavy grid network (Perusahaan Listrik Negara, or PLN), or are indirectly linked to long-term contracts that make it difficult to switch to cleaner sources. Meanwhile, frequent changes to rooftop solar policies and strict conditions around private power agreements create additional hurdles. 

India sits somewhere in between. The country is adding renewable capacity at an impressive rate and positioning itself as a leader in emerging technologies like green hydrogen. Still, the scale of demand outpaces what the grid can reliably deliver. Land constraints, slow administrative processes, and financing difficulties cloud the timeline for widespread adoption. Access to clean power varies sharply from one state to another, which means a company’s emissions outlook can change dramatically based on where a factory sits. 

Yes, But…

All of this adds up to a fundamental challenge for global operations leaders. The short answer to “Can I meet my emissions targets in low-cost countries?” is “Yes, but...”   

Yes, but you will need to commit to supporting infrastructure in local markets. Yes, but it may take more time to deliver against those reductions. Yes, but it will require deploying resources to track emissions where systems for supplier emissions data sharing may not yet exist or only exist in pockets.  

If your organization has committed to moving to low-cost manufacturing regions, achieving this will likely involve: 

1. Creating clarity with your board and stakeholders on commitments to climate goals – what is your organization’s willingness to invest resources to ensure you continue to meet goals in countries where the local infrastructure for clean energy may not exist?
2. Investing in emissions tracking capabilities to get accurate emissions factors from local sources, not just global averages.
3. Early outreach to local suppliers to assess willingness to build local renewable energy sources (ie, solar or wind connected to local micro-grids).

The aspiration to shift to low-cost production while maintaining climate commitments may seem contradictory, but with a clear plan, local partnerships, and the right technology, you can achieve both goals.