As green finance plays a key role in green growth, Việt Nam needs to develop a set of green finance criteria to promote source of capital, experts said at a conference on May 27.
At the forum on promoting green finance held in Hà Nội, Associate Professor Dr Bùi Hữu Toàn, Party Committee Secretary and Chairman of the Banking Academy of Vietnam, said: “On the international stage, Việt Nam is one of the leading countries with a commitment to achieve a net zero emission target by 2050 and participates in the global cooling initiative with more than 60 other countries.
“However, the transition from a ‘brown’ to a ‘green’ economy is not an easy task, as to reach the net zero goal by 2050, Việt Nam needs a huge capital of nearly US$360 billion.”
According to Toàn, to meet the commitments, finance plays a key role, in which the banking industry is the channel to fund activities towards sustainable development.
“The Vietnamese banking industry has so far taken positive steps to promote green finance, but there are still many challenges that need to be resolved synchronously, from perfecting green finance mechanisms to clearly defining conditions for green businesses,” Toàn noted.
The Deputy Director of the Ministry of Agriculture and Environment’s Department of Climate Change Nguyễn Tuấn Quang, noted: “Việt Nam has committed to converting to clean energy and energy efficiency. If the country does not apply it, it will not be able to compete, especially for export products, and might be out of the world game.”
“To achieve the goals, one of the important solutions is to convert energy from ‘brown’ to ‘green’. However, the transition process is not simple, it takes time, technology and finance. The capital for the transition is very large, requiring mobilisation from the entire society, the private sector and financial institutions. Therefore, Việt Nam needs to develop a set of green standards and criteria. Without the set, it is impossible for businesses to access green finance. It will be difficult for banks in lending if businesses cannot prove their green nature based on which criteria.
“The solution to promote green finance is to improve the legal system. Currently, green finance concepts are still unclear and not comprehensively mentioned, so it is necessary to improve the legal corridor,” Quang said.
Recently, the Ministry of Natural Resources and Environment submitted to the Government for consideration a set of green finance criteria, including seven areas considered for green finance.
Quang said another solution would be to focus on supporting businesses and investment projects that are associated with green criteria: In principle, businesses that commit to reducing greenhouse gas emissions would be granted carbon credits. This would be very important because the carbon market controls about 20 per cent of global emissions.
“Currently, the Government has assigned the Ministry of Natural Resources and Environment to coordinate with the Ministry of Finance to pilot the carbon market in 2025, then put it into implementation,” Quang said.
He said domestic banks had so far made efforts to implement green finance programmes, but their green credit remained modest. Therefore, more green finance was needed from international financial institutions.
After COP26, international institutions committed to funding about US$130 trillion to make climate change prevention a focus in business activities. If Việt Nam could access the green finance source, it could achieve the net zero goal by 2050. Therefore, it would be necessary to strengthen global cooperation to access international green financial resources.
Tô Trần Hòa, Deputy Director of the State Securities Commission’s Market Development Department, also admitted that the Vietnamese green capital market still had many limitations. Organisations raised only VNĐ 8 trillion in green bonds in 2024, accounting for only about one per cent of the country’s total bond value.
“Currently, the Vietnamese market does not have green credit criteria. All bond issuances in the country use international standards. This requires Việt Nam to have green criteria so that organisations have a basis for issuance,” Hòa said.
Regarding the legal framework, Hòa said, the Vietnamese financial market mentioned the development of green credit, but these policies had only been decrees and orientations. The policies needed to be further improved.
According to Hòa, the State Securities Commission has a green capital market development plan through the development of a green market infrastructure and a carbon market, in which Phase 1 in 2025-2027 will see the preparation of legal documents, piloting a carbon trading exchange and building technical infrastructure and Phase 2 from 2028 will see the official operation of the carbon trading exchange, the expansion of transactions and connection with international markets.
Besides, Hòa said, the State Securities Commission has so far also developed many programmes and manuals to guide businesses in building financial reports and green financial reports.
Thu Hà (BIZHUB/VNS)
