Vietnamese businesses struggle to get clean credit

Vietnamese companies lack a green taxonomy and fail to understand policies and mechanisms, experts say.

HO CHI MINH CITY: Companies are still struggling to get “green” credit since they lack a green taxonomy and fail to understand policies and mechanisms, experts have told the Global Climate Partnership Workshop in Ho Chi Minh City.

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 Vietnam is committed to achieving net zero by 2050, it needs to invest around US$368bil by 2040, Trinh Thi Huong, deputy director of the Planning and Investment Ministry’s Enterprise Development Agency said.

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

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

Bui Quang Duy, global deputy head of financial institution investments, climate finance, at responsAbility Investments AG, said Vietnam 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 Vietnam’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. — Viet Nam News/ANN

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