Mekong Sustainable Supply Chains
Transformation & Advancement [MekongSustain]

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Project Overview

The development of the ASEAN-Japan Economic Co-creation Vision highlighted the necessity for SME supply chains to adopt Environmental, Social, and Governance (ESG) principles to enhance sustainability and maintain competitiveness in a changing global market. Due to the limited knowledge among SMEs regarding their application, despite potential benefits such as reduced operational costs through practices like Kaizen. In response to this challenge, Japan has initiated a co-creation project aimed at accelerating ESG actions among local SMEs through targeted capacity-building efforts.

Funded by AEM-METI Economic and Industrial Cooperation Committee (AMEICC) and in coordination with the Association for Overseas Technical Cooperation and Sustainable Partnerships (AOTS) as AMEICC’s Secretariat, Mekong Institute as the Project Lead and function as Project Management Unit (PMU) in partnership with project consultants as entrusted service provider is implementing the Project on Mekong Sustainable Supply Chains Transformation and Advancement from September 2024 to August 2026. The project will facilitate collaboration program between SME suppliers and key stakeholders to improve ESG performance with a focus on environmental issues related to decarbonization in the automotive, textile, and agriculture sectors. The program will include developing tailored training programs, educating local trainers, and connecting SME suppliers with solution providers and financing options. The initiative aims to empower SME suppliers to meet global standards while proposing supportive policies for sustainable practices across the Mekong region.

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Project Objective

The project aims to strengthen sustainable and competitive manufacturing in Cambodia, Thailand, Laos, Myanmar and Vietnam, engaging the private sector, catalyzing market forces, and driving regional initiatives that will increase adoption of Environmental and Social Governance (ESG) standards by manufacturers.

Moreover, it aims to drive country-specific and regional efforts to establish a comprehensive ecosystem for the implementation of ESG practices in key sectors like agriculture, auto manufacturing, and the textile industry.

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Project Activities & Modules

The project is structured a series of interrelated activities designed to enhance the capacity of SME suppliers in five Mekong countries with a focus on Environmental compliance targets. This structured approach ensures that each module conducts for enhancing environmental compliance target and sustainability among SME suppliers in the Mekong region.

Module 1

Preparatory study of the current global, regional and local situation

  • Activity 1: Conduct studies of the current global, regional and local situation to assess global trends and establish baseline information by identifying 150 SMEs suppliers of leading companies in automotive, textile, agriculture and food industry goods in the Mekong countries. The findings will be used to further integrate into the capacity building activities (training areas/topics and facilitating matching with solution providers and financial institutions) identification, as per target groups and mechanism to initiate the process including and policy recommendation.
Module 2

Develop training curriculum and conduct Training of Trainers (ToT)

  • Activity 1: Develop a comprehensive training curriculum that includes curriculum development tailored to the needs of SMEs suppliers.
  • Activity 2: Conduct Training of Trainers (ToT) to equip a pool of trainers who will facilitate the training process.
Module 3

Conduct open call for selecting SMEs and develop IT system for tracking

  • Activity 1: Implement an open call for selecting SMEs in automobiles, textiles, and agriculture/food sectors.
  • Activity 2: Recruit and dispatch trainees from SME suppliers in Mekong countries to participate in the training programs.
  • Activity 3: Develop an IT system that will track the progress of SME suppliers on decarbonization plan and monitor their engagement with the project.
Module 4

Conduct training, developing decarbonization plan and facilitating matching with solution providers and financial institutions

  • Activity 1: Trained ToT trainers will deliver training sessions that include developing decarbonization plans for participating SME suppliers.
  • Activity 2: Facilitate matchmaking between SME suppliers and technology solution providers as well as financial institutions to support their ESG initiatives.
  • Activity 3: Provide ongoing support to SME suppliers in implementing their decarbonization actionable plans.
Module 5

Monitoring, Evaluation, and Reporting

  • Activity 1: Establish a robust monitoring and evaluation framework to assess progress against decarbonization plans and targets for SMEs registered in the project.
Project Outcomes
  • Outcome 1: ESG standards and compliance in Mekong Supply chains are improved.
  • Outcome 2: SME supplier’s capacity to adopt ESG standards increased.
  • Outcome 3: ESG adoptions and performance conforming to buyers’ requirements improved.
  • Outcome 4: Access to finance to adopt ESG in the supply chain sector improved.
  • Outcome 5: Regional policy action on ESG adoption to foster a regional ESG ecosystem initiated and advanced.
  • Outcome 6: M & E system for monitoring ESG adoption progress established.