Strategic direction of the economy
In Vietnam, investment forms based on ESG (Environmental, Social and Governance) criteria, green investment funds, green bonds and green stocks are gradually asserting their important role in mobilizing capital for sustainable projects.
Green investment funds have appeared quite early in Vietnam. However, in the initial stage, the number of investment funds was limited and not many investors were interested. Until recently, when green finance became a strategic direction, green investment funds opened up new opportunities for investors. In addition, policies for developing the green stock market have been and are being formed.
Dr. Nguyen Thanh Nga - Deputy Director of the Institute of Strategy and Financial Policy, Ministry of Finance - said that according to PWC's report (2024), the ESG commitment rate of listed enterprises is 93%, exceeding the average of Vietnam at 80%. More than half of listed enterprises in Vietnam (58%) are and will be in the planning stage in the next 2-4 years. Notably, the green bond market is recording many positive signals with the issuance value increasing sharply, showing clear growth.
According to FiinRatings, in 2024, VND 6,870 billion of green bonds will be issued, an increase of 275% compared to 2023.
Along with that is the increasingly dense presence and appearance of the entire banking group from Vietcombank, BIDV, SeABank, HDBank to non-financial enterprises such as Vinpearl, BIM Land, BIWASE... In which, HDBank became the first private bank to issue 3,000 billion VND of green bonds, marking an important step in raising capital for green projects.
Driving force for sustainable future
Despite showing positive signs, the green finance market in Vietnam is still in its early stages and faces many barriers. One of the biggest challenges is the lack of awareness about green finance. Many businesses and investors do not fully understand concepts such as ESG (Environmental, Social, Governance) or green bonds, leading to limitations in accessing and implementing these products.
Dr. Le Duy Binh, Director of Economica Vietnam, commented that there are still challenges in developing green finance in Vietnam, with liquidity still quite low. The reason is that awareness of green finance is still limited, many investors are not interested in this product. At the same time, there is a lack of institutional investors participating in all segments of the credit, stock and green bond markets.
However, green finance still offers great opportunities for sustainable development. The Vietnamese government has made a strong commitment to the goal of achieving net zero emissions by 2050, creating great momentum for the development of the green finance market.
Dr. Le Duy Binh emphasized: "Vietnam promises to be an attractive destination for international green capital with a legal environment that is being improved. Financial institutions and businesses are also making efforts to conduct circular business, develop green finance more and more effectively to mobilize investment resources for development and international integration in sustainable development."
Sharing the same view, Dr. Nguyen Tri Hieu - an economic expert also said that green credit is not only a financial tool but also a solution to promote green growth. With the development of technology and new financial initiatives, green credit will become an important tool, meeting international commitments on environmental protection.
