Vietnamese businesses struggle to get green credit

Applying for “green” credit remains challenging for Vietnamese enterprises due to a lack of green project taxonomy and misunderstanding of policies, experts told the Global Climate Partnership Workshop in HCM City on Monday. Photo baodautu.vn

Companies are still struggling to get “green” credit since they lack a green taxonomy and fail to understand policies and mechanisms, experts told the Global Climate Partnership Workshop in HCM City on Monday.

Green credit provides funding for manufacturing and business activities that have little or no impact on the environment, and green taxonomy is a classification system highlighting whether or not investment options are sustainable.

Since Việt Nam is committed to achieving Net Zero by 2050, it needs to invest around US$368 billion by 2040, Trịnh Thị Hương, deputy director of the Ministry of Planning and Investment’s Enterprise Development Agency, said.

Thus, in addition to public spending, investments by the private sector and foreign sources are direly needed, she said.

Her agency has been improving its policies and mechanisms to help enterprises become more sustainable and environmentally friendly, she said.

Bùi Quang Duy, global deputy head of FI investments, climate finance, at responsAbility Investments AG, said Việt Nam is among the promising markets for “green” investments, and the number of green projects invested by his company has been increasing consistently since 2018.

It is responsAbility’s second largest market, he added.

The ministry said to attract more green investments it has carried out programmes and initiatives to encourage companies to opt for sustainable development and green transition.

They include the Vietnam Environmental, Social, and Governance Initiative, a UNESCAP project on inclusive business in agriculture and food processing, and the “Leveraging Việt Nam’s Social Impact Business Ecosystem in Response to COVID-19” project.

If there are definitive standards for green projects, they would be able to solicit more investment, David Ambadar of the German Agency for International Cooperation said.

Besides green credit, the country needs to improve its green bond market and build a mechanism to issue these bonds to localities, he said.

Phạm Thị Ngọc Thủy, director of the Office of the Private Economic Development Research Board, said it is important to promptly promulgate a green taxonomy and update related parties on policies and mechanisms to help ease the problem.