Banks lead Vietnam’s ESG push with record sustainability disclosures. (Photo: iStock)
Vietnam is undergoing a significant transformation in its financial sector, particularly in promoting sustainable economic development. This drive has been catalyzed by proactive government initiatives aimed at aligning with global sustainability trends.
In 2024, the State Bank of Vietnam (SBV) announced that a remarkable 33 financial institutions published sustainability reports, marking the highest number recorded so far. Additionally, the government has introduced a resolution that provides a 2% interest rate subsidy for eligible businesses, enhancing liquidity for green credit initiatives.
Vietnamese Banks Take the Lead with Sustainability Reports
The momentum in publishing sustainability reports is palpable, especially among Vietnamese commercial banks. With a notable uptick in 2024, many institutions have started to adhere to ESG (Environmental, Social, and Governance) criteria in their disclosures. As of May 2024, six banks had already taken the initiative to release their sustainability reports, further solidifying their commitment to responsible banking.
Pham Thanh Ha, Deputy Governor of the State Bank of Vietnam, voiced the importance of sustainability in future financial growth during a recent forum. He highlighted that sustainability reports are more than just paperwork; they represent a commitment to leadership in a rapidly changing world. However, he also pointed out the challenges that remain, including the maturation of legal frameworks and the necessity for advanced data collection and analytical capabilities. Pham encouraged banks to leverage artificial intelligence (AI) and digital tools to enhance the accuracy and efficiency of their reporting processes.
Moreover, the trend of green credit issuance is gaining traction. In the first quarter of 2025, 58 financial institutions reported outstanding green loan balances aggregating over VND 704.2 trillion (approximately USD 27.1 billion), reflecting a 3.5% growth compared to the previous quarter. Over the last seven years, green credit has surged at an annual average rate of 21.2%, significantly outperforming the overall credit growth rate.
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Green credit issued by Vietnamese commercial banks is on the rise. (Image: iStock)
Interest Rate Subsidies to Boost Green Finance Momentum
The Asian banking sector is witnessing a transformation where sustainable finance is becoming a major driver of innovation. Cassandra Goh, Managing Director at Silverlake Axis, noted that while green loans currently constitute only 4.2% of Vietnam’s total credit portfolio, their growth trajectory is promising. Goh also mentioned Vietnam’s plans to establish national green taxonomies, taking inspiration from existing frameworks in countries like Singapore and Indonesia, with completion scheduled for later this year.
To augment green economic development, Vietnam’s National Assembly recently passed a resolution aimed at expanding subsidies for private enterprises, household businesses, and individuals engaged in circular economy practices and green projects that align with ESG standards. This initiative allows qualifying borrowers to benefit from a 2% interest rate subsidy—an exciting development that aims to stimulate further investment in sustainability.
Dale Hardcastle, Director of Bain & Company’s Global Sustainability Innovation Center, provided insight into the challenges posed by a potential macroeconomic slowdown. He expressed optimism, indicating that governments, corporations, and investors are recalibrating their strategies to accommodate resilient growth trends in the green economy across Southeast Asia and the Asia-Pacific region.
Source: Vietnam Investment Review, Vietnam+, State Bank of Vietnam
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