Significant progress
Aiming for green growth, many Vietnamese banks have proactively positioned themselves as "paving the way" for sustainable finance. In particular, BIDV stands out for its pioneering role: It has issued VND 5,500 billion in green and sustainable bonds in the period of 2023-2024, published an international standard Sustainable Development Report, and committed to achieving net zero emissions by 2045. By the end of 2024, BIDV has financed 2,068 green projects with outstanding loans of nearly VND80,870 billion, accounting for nearly 12% of the total outstanding green credit of the entire system.
Another bright spot is BIDV's "green deposit" product. After only a few months of implementation, this product has mobilized more than VND5,000 billion, showing increasing market interest in sustainable finance.
Taking advantage of its strengths in the agricultural and rural sector, Agribank approaches green credit in the direction of linking clean production and sustainable agricultural development. The bank's "Clean Agricultural Preferential Credit" program has supported more than 40,000 customers. By the end of 2024, Agribank's outstanding green credit reached nearly VND29,000 billion, mainly for renewable energy projects, green agriculture and sustainable forestry.
At Vietcombank, in 2024, Vietcombank successfully issued VND 2,000 billion in green bonds. Accordingly, this bank has become the first bank in Vietnam to issue green bonds in compliance with Vietnamese law, and at the same time voluntarily complied with the Green Bond Principle of the International Capital Market Association (ICMA) and was highly appreciated by S&P Global (an independent organization giving Second Party Opinion) with the Medium Green rating. This is the second highest on a six-point scale according to S&P Global's Shade of Green assessment framework.
S&P Global assessed: Vietcombank's green credit funds contribute to solving the most urgent environmental problems the country is facing, such as carbon emissions and pollution. This affirms Vietcombank's commitment to its efforts to participate in the global green finance chain.
In addition to state-owned banks, private joint stock banks are also actively participating with innovative green financial models. By the end of 2024, Techcombank recorded outstanding green loans of about VND16,400 billion, focusing on renewable energy and clean transportation. This is the first private bank to apply ICMA international standards in issuing green bonds.
HDBank continues to maintain its position as one of the banks with the leading credit growth rate, in which green loans - especially in the renewable energy sector - are increasingly focused on. This bank is applying technology to reduce emissions and develop environmentally friendly credit products, demonstrating a strong commitment to sustainable financial trends.
Another example is MB - currently promoting a plan to issue green bonds worth from 100 to 300 million USD in the international market to increase capital for green projects in 2025.
According to data from the State Bank, by December 31, 2024, outstanding credit for environmental protection purposes had reached over VND4.28 trillion, accounting for more than 27.4% of the total outstanding loans of the entire economy. Credit for green sectors continues to increase sharply in the number of participating credit institutions, scale and speed - showing the real shift of capital flows in the banking system.
Difficulty expanding green credit without a legal framework and general regulations
Despite a significant increase in the scale of credit towards environmental protection, capital flows that truly meet green credit standards have not yet reached a level commensurate with expectations for green growth. Speaking with Lao Dong, Ms. Phung Thi Binh, Deputy General Director of Agribank, said that the reason does not only come from the business side but also from systematic barriers.
According to Ms. Binh, the total outstanding loans through green finance and climate finance programs in the agricultural and rural sector of Agribank are positive, but the figures are still modest compared to the scale of the whole system and do not accurately reflect the actual potential.
One of the major difficulties is the lack of a clear and synchronous legal framework. Vietnam currently does not have specific regulations on green classification, green finance or the carbon credit market, causing the implementation of green credit to lack a solid legal foundation, Ms. Binh commented.
In addition, many businesses, especially domestic businesses, are not ready enough to access international standards and practices. Investing in environmentally friendly technology often requires high costs and long payback times, while short-term financial pressure makes them afraid of borrowing green capital. Even large enterprises tend to prioritize traditional projects with faster profits than choosing green projects with many potential risks.
The combination of lack of legal foundation and limited absorption capacity of businesses is slowing down the process of expanding green credit in the banking system, Ms. Binh emphasized.
Ms. Binh also said that monitoring capital use, especially in the agricultural sector, is a big challenge. Ensuring customers comply with technical procedures requires large human resources, effective control processes and close coordination from borrowers.
Barriers from businesses themselves prevent green capital from spreading
Sharing the same view, Dr. Can Van Luc, an economic expert, said that the underlying reason why many businesses are not able to effectively access green credit capital is because most of them are still in the "startup stage" of the transformation journey.
The rate of enterprises with specific knowledge and actions related to ESG (environment, society, governance) is still very low. Many businesses have not fully assessed the risks as well as the opportunities that green transformation brings to the supply chain, products or business strategy, Dr. Luc analyzed.
Mr. Luc also pointed out that difficulties in resources, lack of information and management capacity are major barriers that make green transformation not really a part of the long-term strategy of many businesses. When businesses themselves are not ready, access to green credit capital - which requires high standards, transparency and long-term orientation - becomes even more distant.
Therefore, although credit institutions have a policy of developing green credit, they are forced to focus on large customer groups - units capable of meeting strict requirements. Meanwhile, small and medium-sized enterprises are easily left behind in the transformation journey.
policy is not synchronous, banks are confused in implementation
According to the Department of Economic sectors Credit - State Bank, the banking system is still facing many difficulties in implementing green credit synchronously and effectively. The biggest obstacle is the lack of a national green classification portfolio as well as a clear system of environmental assessment criteria and quantities. This causes credit institutions to lack a basis to identify, classify green economic activities and accurately count credit resources for green growth and environmental protection.
The institutions and policies to support investment in green growth have not yet been fully issued. Important mechanisms such as the green bond market, carbon market, or preferential policies on taxes, fees, capital, engineering, planning, etc. for each industry and field are still not complete, causing banks to lack the necessary support tools to expand green credit.
The problem of capital sources is also a major bottleneck. Mobilizing international resources is difficult due to global economic and political instability, high USD interest rates and exchange rate risks. Meanwhile, domestic capital sources are not suitable for the term - green projects need long-term capital but banks mainly mobilize short-term capital, creating a large gap and liquidity risks.
Another factor is the uneven awareness of businesses and investors about green finance. The fear of new financial products, combined with a lack of information and monitoring data on environmental compliance, makes it difficult for credit institutions to assess and control risks. In particular, investing in green credit requires banks to improve their professional capacity, invest in risk management systems, technology and staff training - something that not all banks are willing to implement synchronously in current conditions.
