© Tron Le
Vietnam’s central bank has announced changes to its sustainable banking framework in a bid to boost access to green credit for companies, in a fast-growing Asian economy that is seeking to wean itself off coal and ramp up renewable energy production.
Under the updated regulations, the State Bank of Vietnam (SBV) will take on responsibilities for issuing guidance on green credit and environmental risk management as well as guidelines for the filing of reports by lenders relating to green credit, according to an announcement posted on the site of the State Securities Commission.
The announcement said the SBV would develop “preferential policies and support mechanisms” for financial institutions to encourage the development of green banking, including through refinancing and rediscounting initiatives.
Vietnamese state media said the changes, issued this month under the SBV’s Decision 1663/2024, would effectively “create a unified legal basis for credit institutions to implement”, in a country where loans classifiable as “green” account for just 4.5% of total outstanding bank credit.
The decision states that by 2025, all domestic lenders and foreign banks operating in Vietnam should have internal regulations on environmental risk management in credit-granting activities, and should be conducting environmental risk assessments in this area of their work. It aims for at least 10 national banks to have a specialised unit handling environmental risks by next year.
State media said the new framework would help to provide clarity as investors await the publication of the green investment taxonomy that is being drawn up by Vietnam’s environment ministry to allow for easier assessment of investment projects’ environmental impact.
The green credit push comes as coal use, imports and coal-fired emissions have all climbed to record levels in Vietnam this year.
The nation has nonetheless pledged to reach net-zero emissions by 2050, with a Just Energy Transition Partnership (JETP) providing US$15.5bn of public and private capital for climate investment to help Vietnam accelerate its energy transition for the next three to five years.
This page was last updated January 6, 2025
Written by
Katy Lee has been a writer for Green Central Banking since early 2024, focused on our Asia coverage. A Paris-based journalist who has written for major international titles for more than a decade, she is the co-host of The Europeans, an award-winning podcast about Europe which often covers environmental issues.
