IFC assists Vietnam to boost green finance for a low-carbon economy
Capital markets have a big role to play in Vietnam’s transition to a climate-resilient and low-carbon economy, helping mobilize green capital.
The International Finance Corporation (IFC), in partnership with the Swiss State Secretariat for Economic Affairs (SECO), today [November 11] signed a memorandum of understanding (MoU) with the State Securities Commission of Vietnam (SSC), aiming at supporting government efforts to leverage the capital market to tackle climate change through green and sustainable finance.
|Overview of the signing ceremony.|
According to the IFC, the move would help the Vietnamese Government promote sustainable finance, spur private sector investment, eventually realize its climate commitments, and promote a low-carbon growth model to achieve carbon neutrality by 2050.
With IFC’s assistance, the SSC will promote the adoption of environmental, social, and governance (ESG) standards and practices and enforce ESG requirements among market players. This will help strengthen the sustainable finance framework, encouraging innovative financial products such as green bonds, transition bonds, and sustainability-linked bonds to attract international investors looking for sustainable assets.
“Capital markets have a big role to play in Vietnam’s transition to a climate-resilient and low-carbon economy, helping mobilize green capital,” said Nguyen Duc Chi, Deputy Minister of Finance.
“Promoting green and sustainable finance is a long-term priority for the SSC. IFC’s continued efforts to encourage the adoption of ESG standards and practices among public companies will help scale up green finance, creating a sustainable capital market in Vietnam,” said Pham Hong Son, Vice Chairman of the State Securities Commission of Vietnam.
These efforts are part of a new initiative between IFC and SECO—the Integrated ESG Program—to help regulators, investors, companies, and partners in Vietnam manage ESG risks and bottlenecks by promoting effective decision-making and environmental and social (E&S) risk management.
"Strengthening ESG capacity is critical to achieving the climate commitments and the Sustainable Development Goals (SDGs)," said Werner Gruber, Head of the Swiss Cooperation Office in Vietnam. "Failure to consider ESG risks can lead to poor and unsustainable investment decisions. Our work with IFC aims to improve ESG standards and practices in Vietnam to guide financial flows towards sustainable investments for a more inclusive and sustainable economic development.”
Using IFC’s ESG standards – its Performance Standards and Corporate Governance Methodology, the integrated ESG approach addresses critical ESG topics, including effective environmental and social risk management and systems, disclosure and transparency, climate risk and mitigation, and gender.
“Greening the capital markets with a focus on improved ESG standards is a priority as Vietnam aims to unlock private investment to achieve its twin goals of becoming a high-income and carbon-neutral economy by 2050,” said Kim-See Lim, IFC Regional Director for East Asia and Pacific. “IFC is excited to deepen its partnership with SSC and SECO to help spur a conducive environment for private sector climate investment, which is vital for supporting sustainable and resilient growth in Vietnam.”
One of the most vulnerable countries to climate change and natural disasters and one of the most carbon-intensive economies in Asia, the Vietnamese Government aims to decarbonize the economy and achieve carbon-neutral status by 2050, as committed at the 2021 United Nations Climate Change Conference (COP 26). This will require massive investments over the next 30 years, with state resources meeting only part of the financial need.
- Vietnam ready upgrade US ties on 10th anniversary of comprehensive partnership
- Largest-ever US business delegation seeks investment opportunities in Vietnam
- China's Sunny Group plans US$2.5 billion investment in Vietnam
- $8 billion to be pumped into Vietnam’s Central Coast
- FDI to Vietnam’s real estate rises by over 70% in 2022
- Laos vows to facilitate Vietnam's investors
- Hanoi lures nearly $1.7 billion in foreign investment in 2022
- European Investment Bank will provide Vietnam climate finance
- Vietnam stands as credible partner for foreign investors
- Vietnamese Gov’t to divest state capital at 141 businesses until 2025
Economic – science cooperation key pillar in Vietnam-US relations: Party chief
There cannot be another genocide: Ambassadors
Vietnam's GDP growth expands by 3.32% in Q1
Vietnam considers issuing e-visas to citizens of all countries and territories
Business executives to face disciplinary action for failure to stop smuggling activities
Travel enthusiasts flock to Hanoi Tourism Festival 2023
Effective public investment as a top political mission: PM
Hanoi named among Vietnam's most beautiful places
Hanoi among cities with most trees in the world