As green finance provides businesses with access to capital, Vietnam should get its legal framework further improved to raise funds for a green and sustainable economy, experts addressed a forum on green finance hosted by Vietnam Financial Times on Monday.

Can Van Luc, member of the National Fiscal and Monetary Policy Advisory Council, said at the event that credit balances for green projects in Vietnam had reached nearly VND637 trillion (US$24.9 billion) as of March 31 this year, equivalent to some 4.5 percent of total outstanding loans to the national economy.

He added that the Southeast Asian country had issued $284 million worth of green bonds in the 2016-20 period and $1.16 billion worth of the bonds between 2019 and 2023.

Luc highlighted that on the global market, credit balances for green projects were estimated at $4.16 trillion, and the total value of sustainability bonds issued last year was $939 billion.

He elaborated that there is significant potential for Vietnamese businesses to access this substantial amount of green capital.

Green finance is a global trend and legal frameworks for green credit, shares, bonds, and investment funds are undergoing improvement, the expert added.

He underlined the need for Vietnam to mobilize a substantial amount of capital from green credit and securities to implement its green growth strategies and fulfill its commitment to net-zero emission by 2050.

He recommended credit institutions to develop their specific plans for appraising green credit.

Speaking at the forum, Vu Chi Dung, chief of the State Securities Commission of Vietnam’s International Cooperation Department, said that the incomplete legal framework poses a huge challenge to green capital market development in the country.

Dung added that local firms are not fully aware of the long-term benefits of sustainable development and have limited knowledge about green finance.

He suggested that the country introduce more incentives to encourage businesses to issue and invest in green products, and call for the active participation of independent assessment service providers.

The State Securities Commission official concluded that Vietnam should enhance its legal framework and policies to bolster its green capital market.

Tran Anh Dao from the Ho Chi Minh Stock Exchange believes that the country can achieve its net-zero emission goals by mobilizing a substantial volume of capital, particularly through the financial market.

She recommended that businesses increase their awareness of Environmental, Social, and Governance (ESG) standards to attract green capital.

Companies must strictly adhere to environment-related regulations on greenhouse gas emission inventory and emission reduction.

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