On September 25, 2024, in Hanoi, The State Bank of Vietnam (SBV) coordinated with the Korea Council for International Financial Cooperation and other partners to organize a scientific seminar "Towards a sustainable future: Strengthening Vietnam - Korea financial cooperation". The seminar was chaired by Deputy Governor of the SBV Pham Quang Dung, attracting the participation of representatives of management agencies, credit institutions, businesses and experts from the two countries.
At the event, Korean experts shared their experiences in implementing Environmental, Social and Governance (ESG) criteria. The SBV Deputy Governor emphasized that in the face of environmental and social challenges, the banking industry plays a pioneering role in promoting sustainable values. Banks are not only financial providers but also have a responsibility to apply ESG criteria to contribute to the achievement of sustainable development goals.
The SBV soon issued Directive No. 03/CT-NHNN in 2015 on green credit and environmental risk management in banking activities. This was followed by Decision No. 1604/QD-NHNN in 2018 to develop green banking and combat climate change. To date, the SBV has completed regulations on green banking, notably Circular No. 17/2022/TT-NHNN guiding environmental risk management in credit. This demonstrates the SBV's determination to promote green capital flows and bring Vietnamese banking activities closer to international standards on ESG.
Through the implementation process, credit institutions (CIs) in Vietnam have changed their awareness, proactively received green capital and built internal regulations on environmental risk management. By the end of 2023, 100% of commercial banks had developed regulations on environmental risk assessment, and 17 banks had established specialized units on this issue. In the period of 2017-2023, green credit grew by an average of 22% per year, reaching VND 636,964 billion by March 2024, accounting for 4.5% of total outstanding loans in the whole economy.
However, the application of ESG in Vietnam is still in its early stages and faces many challenges such as an incomplete legal corridor, limited awareness of ESG, and the transition to a sustainable model requires large financial resources.
The seminar also focused on discussing ESG initiatives in the banking system, Korea's experience and feasible solutions to promote ESG adoption in Vietnam.
