Banks lead Vietnam’s ESG push with record sustainability disclosures. (Photo: iStock)
Vietnam’s financial industry is undergoing a remarkable transformation towards sustainable and green economic development, significantly influenced by proactive government initiatives. This shift reflects a broader global trend where financial institutions are increasingly prioritizing environmental, social, and governance (ESG) criteria in their operations and reporting.
Vietnamese Banks Take the Lead with Sustainability Reports
In an impressive display of commitment, 33 financial institutions in Vietnam published sustainability reports in 2024, marking a milestone for the industry. This surge in transparency indicates a growing awareness of ESG factors among commercial banks. Notably, more than ten banks have gone a step further by issuing separate ESG reports, showcasing their dedication to sustainable practices.
Pham Thanh Ha, Deputy Governor of the State Bank of Vietnam (SBV), emphasized the essential role of sustainability in future banking and financial growth during a recent forum. He pointed out that these sustainability reports are not just regulatory requirements; they are vital tools that reflect an institution’s commitment to responsible practices and leadership in the sector.
Despite the positive momentum, challenges persist. Pham acknowledged that the industry is still in its infancy regarding sustainability reporting. Issues such as inadequate legal frameworks, difficulties in data collection, and limited analytical capabilities remain hurdles. To combat these issues, he encouraged financial institutions to embrace artificial intelligence (AI) and digital tools to elevate the quality and efficiency of their sustainability reporting.
Moreover, the growth of green credit—loans directed towards environmentally friendly projects—has been remarkable. In the first quarter of 2025, 58 financial institutions reported outstanding green loan balances exceeding VND 704.2 trillion (approximately USD 27.1 billion), which represents a notable 3.5% increase from the previous quarter. Over the last seven years, green credit has seen an astounding average annual growth rate of 21.2%, outpacing the overall credit growth in the country.
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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
Cassandra Goh, Managing Director at Silverlake Axis, highlighted the increasing significance of sustainable finance as a catalyst for innovation within the Asian banking sector. While green loans currently make up just 4.2% of Vietnam’s total credit portfolio, the growing trend is undeniably promising. Goh also mentioned that Vietnam aims to develop national green taxonomies, drawing inspiration from existing frameworks in Singapore and Indonesia, with the goal of completion by the end of the year.
To further energize green economic development, the National Assembly recently passed a resolution mid-May to expand subsidies for private enterprises, household businesses, and entrepreneurs engaged in circular economy practices, green initiatives, or projects aligned with ESG standards. Borrowers who qualify for this initiative will benefit from a 2% interest rate subsidy, creating a more favorable environment for sustainable investment.
Dale Hardcastle, Director of Bain & Company’s Global Sustainability Innovation Center, succinctly commented on the current landscape. Even amidst concerns regarding possible macroeconomic slowdowns that could impede green growth, it seems that governments, corporations, and investors are proactively recalibrating their strategies. Consequently, Southeast Asia and the Asia-Pacific region could continue to experience robust growth in the green economy despite these challenges.
For more insights, refer to the detailed articles on this topic from the Vietnam Investment Review, Vietnam+, and the official updates from the State Bank of Vietnam.
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