Green credit - an inevitable requirement in the era of sustainable development
In the context of the global entering a period of recovery after the COVID-19 pandemic, "green recovery" is not only a policy trend but has become a new development standard. Countries are competing not only for growth rate, but also for climate change adaptation and emission reduction commitments. In that flow, green credit emerged as a strategic pillar in macroeconomic management, finance - currency, and system risk management.
Green credit is no longer an academic concept or a limitation in the field of renewable energy, but has expanded to industries such as clean agriculture, sustainable transportation, green construction, environmental technology, and circular economy. This is an important financial tool to restructure the economy towards sustainable and equitable development.
Vietnam has demonstrated a strong commitment to this transformation journey through: Committing to net zero emissions by 2050 at COP26; National Action Plan on Green Credit and Green Banking issued by the State Bank (2022); increasingly proactive support of the Ministry of Finance, the Ministry of Planning and Investment, and many large commercial banks.
However, these strong commitments are facing internal capacity limitations, especially: Lack of a unified green classification framework; Lack of experts and well-trained creditors; Enterprises are still confused in accessing green capital and building sustainable projects.
That poses an urgent need: a large-scale, methodical, in-depth and practical training and capacity building program is needed to synchronize the capacity of the entire ecosystem - from policy making, banking operations to implementation by businesses.
Challenges in implementing green credit in Vietnam
Although Vietnam has shown a strong commitment in the green transformation roadmap, implementing green credit in reality is still facing many fundamental and systematic challenges, especially considering the characteristics of the economy with more than 90% being small and medium enterprises (SMEs) - an area with significant limitations in capacity, resources and sustainable transformation thinking.
For credit institutions (CIs)
- Lack of a unified green classification framework and internationally compatible domestic standards: Vietnam has not yet issued a comprehensive green classification framework with legal value. This makes it difficult for banks to identify and classify "green" loans correctly, and at the same time lacks a basis to adjust credit policies, risk management or transparent reporting according to global practices and developed countries.
- Difficulties in noi dunging ESG risks into credit management: The localization and integration of environmental - social - governance (ESG) risks into the credit appraisal and decision-making process is still very preliminary. This reduces the effectiveness of sustainable risk assessment and development of appropriate credit products.
- Lack of professional capacity in green credit within the bank: Most credit institutions have not been trained in Green Project Appraisal, Emission life cycle Assessment, or identify low-carbon transformation opportunities. This human resource is not enough to support businesses in building green credit records that meet standards.
- The green credit ratio is still very low, not yet spreading to many sectors: By 2023, the estimated green credit ratio will account for less than 5% of the total outstanding debt of the whole sector, mainly focusing on renewable energy projects. Other important sectors such as clean agriculture, energy-saving industry, green construction or clean logistics have not yet had a systematic and effective access to credit capital.
For businesses, especially in the SMEs sector
- Lack of knowledge and skills in accessing green credit: Most SMEs do not have a full and deep understanding of the value that green credit brings - from access to preferential capital, enhancing ESG reputation, to the opportunity to participate in the green global supply chain. This has caused them to not form a strong enough internal motivation to proactively learn, learn and transform business models.
- Difficulties in preparing standard financial and environmental records: Strict requirements on environmental impact assessment, emission measurement, ESG reporting or financial transparency are major obstacles for SMEs - which already lack professional personnel and financial resources to hire consultants or invest in the system.
- Lack of motivation for short-term transformation: Investment costs for green production solutions are often high, the payback period is long, while the support mechanism of the State and banks is still not synchronous and the approach is inconsistent. This eliminates the driving force for change of enterprises in the initial stage.
Strategic role of training and capacity building
Green credit - the pillar of sustainable finance - cannot be effectively implemented without a large-scale, comprehensive and practical training and capacity building program. In the context of Vietnam's commitment to achieving net zero emissions by 2050, training is not only a need for technical assistance but also a strategy to transform thinking and create an institutional foundation for green growth.
An effective green financial system needs to be built on a multi-layered, inter-sectoral human resource platform, with systematic capacity improvement, a long-term vision and spreading across the width (the entire system) and depth (specialization).
1. Training for policy planning and management levels
For agencies such as the State Bank, the Ministry of Finance... need to receive in-depth training on: Developing and updating a set of national green framework criteria, ensuring compatible and flexibility with global standards; ESG risk measurement, monitoring and reporting system associated with macro indicators and financial system safety; Design multi-sectoral incentive policies, coordinating between credit, tax, green investment funds and market incentives.
2. Training for commercial bank regulators
Bank leaders need to deeply understand and proactively integrate green credit into: Long-term growth and risk management strategy, gradually shifting credit portfolio to sustainable development areas; Building a risk assessment model associated with ESG, transformation risk management and physical risks; Standardizing the internal reporting and monitoring system, as a foundation for international calls and green listing.
3. Training for credit officers - internal appraisal - control
This is the main working force. They need: Green project appraisal skills, emission cycle assessment, determination of financial feasibility and environmental impact; Capacity to convert ESG criteria into a qualitative index, associated with credit conditions and post-disbursement supervision; Sustainable risk management thinking, not only looking at the ability to repay short-term debts, but also associated with long-term transformation.
4. Training for businesses - especially SMEs
With more than 90% of Vietnamese enterprises being small and medium, understanding and proactive access to green credit is still very limited. Training needs to focus on: Providing basic knowledge on green criteria, ESG; Guidelines for building green credit records, low-carbon financial models, measuring the effectiveness of green investment; Raising awareness of the long-term value of green credit, thereby creating motivation for self- transformation instead of waiting for compulsory requirements from the market.
5. Bringing green credit into university training programs and vocational organizations
strategic steps are: Integrating green credit, ESG, sustainable finance into official subjects at universities in the economic, financial - banking, and business administration sectors; Training a team of lecturers and professional consultants on green credit to build a qualified professional force to support practical implementation in localities and business associations; Coordinate with financial institutions, industry associations, organize on-site training courses for businesses and entrepreneurs in provinces and cities nationwide.
In short, green credit will not be able to "catch the roots and bloom" if it only stops at policies or incentives. Training and capacity building is the " institutional foundation" to build an effective green financial ecosystem, where every individual - from policymaker, banking leader, credit expert to every small enterprise - becomes a proactive link in the national green transformation journey.
Strategic proposal - Design a comprehensive green credit training ecosystem
For green credit to truly become a sustainable driving force for the Vietnamese economy, it is necessary to have a synchronous, consistent training ecosystem and closely coordinate between the subjects: State - State Bank, commercial banking system, universities, training - consulting organizations, and the business sector. This ecosystem not only transmits knowledge, but also creates thinking, skills, and a culture of sustainable development in the entire financial system.
For the State and the State Bank
a. Building a national capacity framework for green credit:
This framework needs to clearly define the necessary standards, skills, and professional competencies for each group of subjects: policy makers, banking specialists, businessmen, consultants, auditors, and students in the economic sector. This will be the basis for designing training programs, capacity assessment, practice certificates and professional standardization in the future.
b. Establishing a National Green Credit Training Center - ESG:
This center should be organized according to the public-private partnership (PPP) model, with the support of the State Bank, the Ministry of Finance, universities, major commercial banks, and international organizations such as the WB, ADB, IFC, etc. The goal is to provide standard training programs, green project appraisal guidance documents, typical case studies, and digital platforms to share knowledge in the green credit ecosystem of Vietnam.
c. Issue instructions to integrate green content into the regular training program:
It is mandatory for academies and universities in the finance - banking and economics sector to integrate green credit, ESG, and sustainable finance into the training program. This is a way to build a green human resource generation right from the lectures, creating high-quality resources for the market in the next 5 - 10 years.
For the commercial banking system
a. Develop internal training strategies according to levels:
Banks need to build a training roadmap from basic to advanced, applying the blended learning model (combining e-learning, in-person classes and practical training according to the project). Officials from credit level, risk management to mid-level and high-level management all need to update their knowledge of green taxonomy, emission cycle assessment, conversion risk assessment models, etc.
b. Encourage the linkage of ESG - green credit capacity with recruitment and promotion KPI:
The bank needs to include the criteria of "ESG assessment capacity, green credit" in the work performance assessment system (KPI) and appointment criteria. This will be a motivation for the team to proactively learn and improve their professional capacity in a practical way.
c. International cooperation to update global standards:
Participating in training programs of IFC, ADB... or signing MOUs with international consulting organizations will help Vietnamese banks access green classification frameworks, risk measurement tools, advanced ESG valuation technology - creating a foundation to reach the global green capital market.
For businesses and supporting organizations
a. Cooperation in organizing green capital access training courses:
Industry associations, commercial departments, and provincial Departments of Industry and Trade need to coordinate with banks to organize training courses for businesses - especially SMEs - on building green projects, completing loan applications, and establishing a low-carbon business model.
b. Promoting the formation of a green business network:
It is necessary to encourage the formation of green business associations in the locality, connecting with banks, investment funds, climate risk insurance organizations and ESG consulting units. This is a platform for sharing knowledge, spreading good practices and building a domestic green market.
c. Increase capacity for independent auditing and consulting organizations:
Auditing and consulting units must improve their capacity to support businesses and banks in determining greenliness, assessing emissions, measuring environmental and social efficiency, and preparing ESG reports that meet international standards.
Conclusion
Green credit is not simply a stream of capital - but a flow of knowledge, a transformation of awareness and a belief in a sustainable future. In order for Vietnam not to be on the sidelines of the global green financial wave, it is necessary to invest strongly and drastically in improving human capacity - from policymakers, banking teams, businesses to today's students, tomorrow's green leaders.
The success of green credit does not lie in the current debt balance, but lies in the ability to create a synchronous learning - training - innovation ecosystem, where all entities are equipped with enough capacity to play an active role in the journey of sustainable transformation.
Vietnam's green credit ecosystem will not be sustainable without long-term investment in people - the most valuable asset in the journey to realize sustainable development goals by 2050.
