How much is the Vietnamese banking industry betting on the ‘greening’ campaign?

This evolution is most evident in two main areas:

• Green in operations: Vietnamese Banks are adopting initiatives aimed at lowering CO₂ emissions, conserving resources and protecting the environment—efforts that include waste recycling and the shift towards digital banking to reduce the environmental footprint of day-to-day operations.
• Green in business: Financial support is being extended to customers and projects aligned with sustainability, including renewable energy ventures such as solar and wind power, wastewater treatment initiatives, and afforestation. Through tailored green financial products and community engagement, Vietnamese banks are also encouraging clients to take part in environmental stewardship

Although the vision of a sustainable future is clear, the Vietnamese banking sector must navigate considerable challenges on its path to green transformation.

Foremost among these is the absence of a cohesive and comprehensive legal framework. Vietnam is still laying the groundwork for its green credit ecosystem, yet ambiguity around environmental benchmarks, and a lack of clear certification criteria for green projects, continues to hinder progress. The shortage of regulatory tools to guide monetary and credit policy in support of green finance has created an uncertain landscape. Without established standards for environmental banking governance or detailed guidance on managing environmental and social risks, credit institutions are left grappling with how best to build effective frameworks and develop green financial products.

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A second major hurdle involves the issuance of green bonds under Vietnamese bank standards. While the regulatory groundwork is underway, the path to launching compliant green bonds remains fraught with complexities. Present regulations largely address capital raising by businesses for their own green initiatives, yet offer limited guidance for banks wishing to source green funds for lending or refinancing other enterprises. The absence of a unified set of criteria, along with a lack of detailed project portfolios and environmental impact assessment protocols, adds to the uncertainty credit institutions must contend with.

In addition to the legal framework, internal capacity remains a notable constraint. The evaluation, appraisal and oversight of social and environmental risks calls for a highly specialised workforce—one that many Vietnamese banks, particularly those with vast networks, do not yet possess. Building effective procedures, shifting internal perceptions, and developing human resources in sustainable finance and environmental stewardship is a gradual process, one that demands considerable dedication in both time and investment.

Customers pose a further challenge. A limited understanding of the significance and long-term implications of environmental and social risks in business can make post-lending risk management considerably more complex. While green credit offers enduring value for both the economy and society, the upfront costs associated with adopting green technologies and waste treatment solutions often act as deterrents, leaving many enterprises hesitant to pursue this form of financing.

Vietcombank, in recent years, has woven sustainability into its core growth strategy—elevating the financing of green projects as a principal objective. The Vietnamese bank continues to direct capital towards green sectors, notably renewable energy, environmentally conscious agriculture and waste treatment initiatives. By the close of the first quarter of 2024, its outstanding green credit had climbed to VND 47,700 billion, accounting for 3.7% of total loans. In 2023, Vietcombank also re-lent green capital from the Japan Bank for International Cooperation (JBIC), allocating a total of USD 300 million to fund renewable energy ventures and other environmental initiatives.

With a longstanding focus on rural and agricultural finance, Agribank has channelled substantial resources into supporting enterprises and programmes in these sectors. Particular emphasis has been placed on high-value production, clean energy, and advanced agricultural methods—bolstering the expansion of green credit while integrating environmental and social risk management into lending practices. As of 31 December 2023, Agribank’s outstanding green loans stood at VND 28,277 billion, benefiting 42,883 clients.

BIDV currently leads the market in green project lending, with a portfolio valued at around USD 3 billion as of the end of 2023. It was also the first domestic bank to issue green bonds for business financing. The bank offers preferential loan packages with more attractive rates for companies meeting international green standards.

In 2023, ACB became the first Vietnamese bank to release a standalone ESG report, affirming its commitment to sustainability through green technology investment, streamlined operations, and energy-saving initiatives. Staff development and a sustainable work culture are also key priorities. According to its 2022 sustainability report, ACB managed to recycle 215 tonnes of paper and 32 tonnes of plastic. Over the past decade, the bank has invested more than VND 307 billion in outreach and practical projects to promote environmental awareness. It further demonstrated leadership by introducing a VND 2,000 billion Green/Social credit package at the start of 2024.

Military Bank (MB), too, has shown a notable shift in strategic direction, particularly since 2023, when it pledged to integrate ESG practices aligned with international standards. Beyond conventional charitable efforts, sustainability now underpins MB’s entire portfolio—from financing expansive renewable energy schemes to promoting energy-efficient consumption and advising clients on green alternatives. Almost all internal processes have been digitised, while 90% of the bank’s products are now offered via digital platforms—reducing reliance on physical documentation. The volume of loans directed to green projects has risen sharply, with significant investment flowing into renewable energy.

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