Banks lead Vietnam’s ESG push with record sustainability disclosures. (Photo: iStock)
Vietnam’s financial landscape is undergoing a significant transformation as it embraces sustainable and green economic development. With eager government support and a burgeoning awareness of Environmental, Social, and Governance (ESG) principles, the momentum has reached an impressive peak in 2024.
Surge in Sustainability Reports
In a landmark achievement, a record 33 financial institutions in Vietnam released sustainability reports in 2024—an unprecedented number that signals a promising shift toward accountability and transparency in the banking sector. The State Bank of Vietnam (SBV) has encouraged these developments, recognizing the importance of sustainability in shaping the future of finance. Notably, many of these reports now incorporate ESG criteria, with over ten banks publishing separate, detailed ESG reports.
Pham Thanh Ha, Deputy Governor of the SBV, highlighted the vital role of these reports at a recent forum, emphasizing that they reflect the commitment and leadership of financial institutions towards sustainable practices. While this progress is commendable, he also pointed out challenges that remain, particularly in the areas of legal frameworks, data collection, and analytical capabilities. To address these issues, he urged banks to leverage artificial intelligence and digital tools to improve the quality and efficiency of their sustainability reporting processes.
Growth of Green Credit
The rise of green credit in Vietnam is another noteworthy aspect of this sustainability momentum. By the first quarter of 2025, 58 financial institutions reported outstanding green loan balances totaling over VND 704.2 trillion (approximately USD 27.1 billion), reflecting a 3.5% increase from the previous quarter. Over the past seven years, green credit in the country has grown at an impressive average annual rate of 21.2%, significantly outpacing overall credit growth. This trend underscores the increasing prioritization of environmentally-conscious lending practices among Vietnamese banks.
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Green credit issued by Vietnamese commercial banks is on the rise. (Image: iStock)
Government Initiatives to Support Green Finance
The government has also played a crucial role in driving green finance. As part of efforts to stimulate this sector, the National Assembly passed a resolution in mid-May aimed at expanding interest rate subsidies for private enterprises, household businesses, and entrepreneurs engaged in green and circular economy projects. Under this scheme, eligible borrowers can benefit from a 2% interest rate subsidy, providing a significant incentive to embrace sustainability.
Cassandra Goh, Managing Director at Silverlake Axis, observed that sustainable finance is emerging as a key driver of innovation within the Asian banking sector. Although green loans currently represent just 4.2% of Vietnam’s total credit portfolio, the upward trajectory is unmistakable. Goh also noted Vietnam’s commitment to developing a national green taxonomy, inspired by frameworks in places like Singapore and Indonesia, with hopes for completion by the end of this year.
Challenges Ahead
Despite the progress, concerns linger regarding broader economic factors that may impact green growth. Dale Hardcastle, Director of Bain & Company’s Global Sustainability Innovation Center, noted that while macroeconomic slowdowns can pose challenges, there is visible resilience in Southeast Asia and the Asia-Pacific as governments, corporations, and investors adapt their strategies. This resilience suggests that the green economy may continue to thrive, even in uncertain times.
As these developments unfold, Vietnam is poised to continue its journey toward becoming a leader in sustainable finance, harnessing both innovation and commitment from its financial institutions and government alike.
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