Mr. Vu Quang Dong - Deputy Director of Capital & Market Division of Vietcombank said that through the issuance of green bonds, Vietcombank wishes to actively contribute to the sustainable development of Vietnam and spread green financial orientation to the community.

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Towards supporting environmentally friendly projects

- Why did Vietcombank decide to issue green bonds at this time?

In 2021, at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), for the first time, the Vietnamese Government made a strong commitment to climate change, making Vietnam a country with net zero emissions by 2050. This is considered a strong commitment of Vietnam in pursuing sustainable development.

As a leading commercial bank, Vietcombank always puts sustainable development and environmental protection as the core goals in its operational strategy. We recognize the increasing demand for investment in environmentally friendly projects, and green bonds are an effective tool to mobilize capital to support these projects.

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- Can you elaborate on the structure and special elements of the green bond that Vietcombank has just issued?

This is Vietcombank's first green bond issuance. At the same time, Vietcombank is the first bank in Vietnam to issue green bonds in compliance with Vietnamese law and voluntarily comply with the Green Bond Principles of the International Capital Market Association (ICMA).

Vietcombank's green bond framework was consulted by the international organization Global Green Growth Institute (GGGI) and was highly rated by the prestigious credit rating organization S&P Global with a Medium Green rating (the second highest level in the six-level scale according to S&P Global's Shade of Green rating framework), affirming the quality, compliance, and high level of transparency in project selection, management of disbursement of funds from issuance, and Vietcombank's governance and reporting regimes.

Our VND2,000 billion green bond was designed with a structure that does not require collateral and does not require payment guarantees. The entire value of the offered bonds has been fully purchased by investors, demonstrating their great confidence in Vietcombank's management capacity and commitment.

- Could you please share more about the process of evaluating and selecting funded projects?

We apply a very rigorous assessment process. First, selected projects must meet the criteria of the Green Bond Framework, developed in consultation with GGGI and rated by S&P. This framework is closely integrated with the bank's credit approval process, with the participation of ESG experts from Vietcombank's departments. We also require clients to conduct environmental and social impact assessments as well as develop measures to mitigate negative impacts on the environment, to ensure that projects not only meet green standards but also truly contribute to the sustainable development of the environment. Project approval is strictly implemented according to Vietcombank's regulations.

- How will Vietcombank monitor and report on the effectiveness of using capital from this green bond?

Monitoring and reporting are conducted transparently and rigorously. Vietcombank will annually publish an audit report on the capital allocation status and an environmental impact assessment report of funded projects to the public. The information includes disbursed capital, types of projects allocated capital, capital allocation ratios, and audit opinions on the appropriateness of capital allocation with our green bond framework. In addition, undisbursed capital will be managed in accordance with regulations and ensure transparency throughout the life of the bond.

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Focus on building green banking strategy

- What are Vietcombank's future plans to expand this green strategy?

We will not stop at issuing green bonds. Based on the strategy of Vietcombank's development strategy to 2025, with a vision to 2030, VCB focuses on building a green banking strategy and diversifying green financial instruments, perfecting criteria and policies to direct credit flows to businesses using new technology, low carbon emissions, and competitiveness in the international market, businesses investing in renewable energy, clean energy, green infrastructure, and the startup community to contribute to environmental protection and improve the efficiency of resource and energy use.

As of December 31, 2023, Vietcombank's total outstanding green credit balance reached VND 46,100 billion, equivalent to 3.6% of the total outstanding balance, of which 84% of the green credit structure was renewable energy. Vietcombank's issuance of VND 2,000 billion worth of green bonds was a great success in a short time, receiving positive responses from investors and prestigious international organizations, affirming Vietcombank's quality and leading role in this field.

We will strive to promptly launch new products and new steps to meet the trend of green finance and green economy and commit to actively contributing to building a sustainable and environmentally friendly Vietnamese economy.

Tue An (performed)