Legal Benefits and Contributions of Higg FEM to Environmental Law
I. THE INFORMAL LEGAL STATUS OF HIGG FEM
Higg FEM is not a law, but it functions as an Enhanced Compliance Standard, widely recognized by the market. It requires businesses to implement management measures beyond basic local legal requirements, including:
“Above-Threshold” Control: While national laws set minimum discharge limits, Higg FEM encourages (and at higher levels requires) factories to set absolute reduction targets and pursue continuous environmental performance improvement.
Globalization of Environmental Standards: When a U.S. or European brand requires Vietnamese suppliers to comply with Higg FEM, it indirectly demands adherence to global environmental standards, often stricter than local regulations.
II. LEGAL AND MANAGEMENT CONTRIBUTIONS OF HIGG FEM
Higg FEM is a powerful tool supporting both regulators and businesses to comply with international regulations and prepare for emerging laws:
1. Preparation for Carbon Tax and CBAM
Standardized GHG Data: The Energy and GHG module in Higg FEM requires factories to calculate and report GHG emissions according to international standards. This forms the critical dataset for businesses preparing for carbon pricing mechanisms, such as the EU Carbon Border Adjustment Mechanism (CBAM)—an import tax based on product carbon intensity.
Sustainability Reporting (CSRD): Data collected through Higg FEM serves as the main source for preparing sustainability reports, meeting requirements of new mandatory non-financial reporting regulations, such as the EU Corporate Sustainability Reporting Directive (CSRD).
2. Support for Chemical Safety Law Compliance
Chemical Management under MRSL/RSL: The Chemical Management module in Higg FEM is closely aligned with industry restricted chemical lists (MRSL/RSL), such as ZDHC. Compliance with Higg FEM ensures adherence to laws governing prohibited and hazardous chemicals.
3. Minimized Risk of Local Legal Violations
By requiring evidence of environmental permits, discharge permits, and periodic monitoring reports, Higg FEM forces businesses to maintain accurate legal environmental records, reducing the risk of penalties from state regulatory agencies.
III. DISADVANTAGES OF LACKING HIGG FEM
Not using Higg FEM leaves businesses without the necessary environmental data for both legal and commercial purposes:
No Clear Evidence: Companies may claim to be environmentally friendly but lack verified data to prove it. This increases the risk of being accused of greenwashing.
Lack of Standardized GHG Data: Without Higg FEM GHG data, businesses are at a disadvantage when carbon taxes or similar regulations are implemented, potentially facing higher taxes or import restrictions.
IV. TTS-CERT AND HIGG FACILITY ENVIRONMENTAL MODULE CONSULTING
TTS-CERT helps Vietnamese businesses convert complex environmental data into international-standard Higg FEM reports:
Expert Consultation: TTS-CERT guides accurate calculation of GHG emissions and water consumption according to Higg standards, ensuring accuracy and transparency in reporting.
Score Optimization: TTS-CERT recommends practical environmental improvements (e.g., solar energy systems, boiler optimization) to maximize Higg FEM scores, helping businesses exceed legal thresholds and gain market advantages.
