On December 4, Investment Newspaper organized the Workshop "Leveraging large capital sources for green credit" with the support of the Bank for Agriculture and Rural Development of Vietnam (Agribank).
In his opening speech at the Forum, Mr. Le Trong Minh, Editor-in-Chief of Investment Newspaper, emphasized that sustainable development is increasingly becoming an all-encompassing trend in the world and that circular economy and green growth are the models chosen by many countries. In addition to aiming for green growth, major changes in the world along with challenges from climate change and rising global temperatures are requiring countries to accelerate growth model innovation, seize opportunities, overcome challenges, and move towards sustainable and inclusive development.
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| Mr. Le Trong Minh, Editor-in-Chief of Investment Newspaper delivered the opening speech at the Workshop. |
The trend covers many countries' choices
For Vietnam, green growth and sustainable development have an organic and close relationship with each other, being both a viewpoint and a consistent goal in the socio-economic development policies of the Party and the State. The implementation of the green growth model and sustainable development goals also demonstrates Vietnam's commitment as a responsible country in contributing to the efforts of the international community for a green and sustainable planet.
As a party to the United Nations Framework Convention on Climate Change, and one of the few countries severely affected by climate change, Vietnam is committed to doing its utmost to respond to climate change, effectively implementing measures to reduce greenhouse gas emissions with the active support of the international community.
Since the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), Vietnam has been making efforts to implement many solutions to fulfill its commitment to achieving net zero emissions by 2050.
This ambitious goal was reaffirmed by Vietnam at COP27 and continued to be emphasized by the Vietnamese delegation led by Prime Minister Pham Minh Chinh at COP28 taking place in the United Arab Emirates.
The fact that a developing country like Vietnam, which is still facing many difficulties, has still made commitments to respond to climate change like developed countries has affirmed the determination of the Vietnamese Government in implementing the goal of inclusive, green and sustainable development.
The National Strategy on Green Growth for the 2021-2030 period, with a vision to 2050, and the National Action Plan on Green Growth for the 2021-2030 period approved by the Prime Minister in 2021 and 2022 are some of the most recent examples of efforts to achieve this goal.
The problem of unlocking great resources is waiting
Vietnam's journey to realize its green goals requires not only the improvement of policy mechanisms, raising awareness, and building a monitoring system capable of implementing commitments, but also a huge amount of resources. According to the World Bank's estimate (2022), Vietnam will need about 368 billion USD by 2040, equivalent to 6.8% of GDP per year when pursuing a development path that combines resilience and net zero emissions. Of which, the decarbonization journey to meet international commitments accounts for about 30% of the resource demand.
However, the public sector cannot meet that figure. According to a report by the Ministry of Planning and Investment, to achieve the goals of green growth and net zero emissions in the 2021-2050 period, Vietnam will need to mobilize an additional 144 billion USD from the state budget, equivalent to 2.2% of GDP.
For a developing country in transition with a low-middle income, mobilizing such large resources is not a simple problem. According to Mr. Le Trong Minh, in the above context, green finance is one of the solutions, and green credit is a key.
In Vietnam, green credit is also showing many positive signs with an average growth rate of about 23% in the 2017-2022 period, higher than the general credit growth rate of the economy. Along with the trend of businesses increasingly complying with environmental, social and sustainability (ESG) criteria, leading to a corresponding increase in demand for green credit, banks are also increasingly active and confident in disbursing more loans to green projects with the support of Government policies and regulations of the State Bank such as Directive No. 03/CT-NHNN dated March 24, 2015 on promoting green credit growth and managing environmental and social risks in credit granting activities; Decision No. 1604/QD-NHNN dated August 7, 2018 approving the Project on developing green banks in Vietnam and Circular No. 17/2022/TT-NHNN dated December 23, 2022 guiding the implementation of environmental risk management in credit granting activities of credit institutions and foreign bank branches.
“However, with a total of less than VND600 trillion in green credit provided by banks to date, it can be seen that this potential source of green capital has not yet been fully tapped. A large resource is still waiting not only from domestic banks but also from external partners who are currently showing great interest in the opportunities opened up by the greening process in Vietnam,” said Mr. Le Trong Minh.
Therefore, according to Mr. Minh, the question is what problems need to be solved to be able to unblock and lead that large source of capital, promote green credit to develop strongly in Vietnam, and meet the rapidly increasing demand? What are the mechanisms and legal frameworks that need to be improved? What solutions can create more sources and promote the flow of green credit in the country? Which areas need to be prioritized? What do businesses need to pay attention to in order to meet the conditions for green credit?...
These are also the contents discussed below at the Workshop "Leveraging large capital sources for green credit", following a series of workshops organized by Investment Newspaper on the topics of climate change, green growth, sustainable development, the most recent of which is the 2023 Sustainable Development Workshop held in mid-November 2023.
"Hopefully, the opinions of the experts present here today will somewhat clarify," Mr. Le Trong Minh also emphasized.
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