1. KEY TAKEAWAYS

Fueled by environmental concerns, international regulations, and the potential for profit, Vietnamese banks are actively embracing green finance practices. This translates to a rise in green credit packages and collaborations with businesses on sustainable projects. However, the lack of a green classification system and limited preferential treatment for green initiatives pose challenges. Despite these hurdles, Vietnam boasts significant potential to generate substantial revenue from carbon credit markets.

2. GREEN FINANCE ON THE RISE

Vietnamese banks are experiencing a surge in green finance as they recognize its importance for sustainable development. This shift is driven by a trifecta of factors: the urgency to address Vietnam’s environmental challenges and combat climate change, upcoming international regulations like the EU’s Carbon Border Adjustment Mechanism that necessitate eco-friendly practices, and the potential for profit in areas like carbon credit trading and renewable energy.

3. BANKS TAKE ACTION

Vietnamese banks are putting their green commitments into action. Standard Chartered Bank is collaborating with USAID to bolster renewable energy and upgrade the power grid. Meanwhile, United Overseas Bank is extending a helping hand to sustainable agriculture by offering green trade finance for certified organic and fair-trade products. Orient Commercial Bank is partnering with the IFC to provide green credit at preferential rates, while Asia Commercial Joint Stock Bank has launched a green and social credit package specifically designed to support eco-friendly businesses.

4. CHALLENGES AND OPPORTUNITIES

While progress is evident, Vietnam’s green finance journey faces hurdles. The lack of a green classification system makes it difficult to assess the effectiveness of green credit policies. Additionally, businesses find it challenging to secure preferential treatment for their eco-friendly projects. However, Vietnam has significant potential to overcome these obstacles. Its dense forest cover presents a lucrative opportunity for carbon credit trading, while renewable energy and plastic recycling offer additional avenues for revenue generation.

5. CONCLUSION

Vietnam’s green finance journey requires a clear roadmap for success. Establishing a green classification system is crucial to accurately evaluate green credit policies and their impact. Additionally, implementing attractive policies like tax breaks and lower interest rates can incentivize green investments.  Encouraging businesses to embrace eco-friendly practices is equally important. By addressing these challenges and capitalizing on the substantial revenue potential from carbon credit trading, renewable energy, and plastic recycling, Vietnam’s banking sector can become a driving force for a sustainable future.

According to Tuoi Tre News.