“Green handshakes” for sustainable growth

It is not only businesses that are moving forward. Vietnam’s Government is also introducing a wide range of solutions to advance the goal of sustainable growth.

At official events, Prime Minister Pham Minh Chinh has consistently underlined the target of achieving at least 8 per cent economic growth by 2025, with ambitions for double-digit growth in the years that follow. He has made it clear that rapid growth must remain closely aligned with long-term sustainability.

Recent policy measures have been designed to fuel fresh growth drivers, fostering breakthroughs in science and technology, supporting innovation, encouraging digital transformation, investing in human capital, exploring nuclear power and renewable energy—all in service of the Government’s sustainability ambitions.

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At present, the Ministry of Agriculture and Environment has been tasked with establishing a green project classification and corresponding criteria, providing a foundation for mobilising capital for sustainable development. The Ministry of Industry and Trade is expected to push for more sustainable export strategies. Elsewhere, the Ministry of Science and Technology and the State Bank have been assigned to collaborate with relevant ministries to support green transformation and to promote circular, creative and sharing economies alongside emerging sectors such as artificial intelligence, big data, cloud computing and clean energy.

Dr Vo Tri Thanh, former Deputy Director of the Central Institute for Economic Management and now Director of the Institute for Brand and Competitiveness Strategy Research, has affirmed that green transformation is no longer optional: it is a necessity for both enterprises and nations.

As Dr Thanh points out, green development has become more than a political statement; it is also a reflection of evolving market demands. Today’s consumers seek safer, more sustainable products and services, while international markets, especially in developed countries, increasingly require imported goods to be environmentally responsible and transparently sourced.

Turning to green finance, Dr Thanh noted that 80 per cent of financial capital today is tied to ESG principles—environmental, social and governance factors. For businesses yet to embrace sustainable transformation, accessing this capital is becoming significantly more difficult.

According to him, green finance represents a profound shift not just in policy but in the frameworks of institutions and technology. It introduces new concepts: green benchmarks, sustainable standards, responsible origins.

While the direction of travel is clear, Dr Vo Tri Thanh acknowledged the significant challenges Vietnamese businesses still face in their journey towards green and sustainable growth, particularly around the cost of transition and the pressures exerted by markets and regulatory structures.

Institutionally, the journey is complex. It demands shifts in mindset and practice, policy and law, and a collaborative effort from every part of society.

“It cannot be done by businesses or the State alone,” Dr Vo Tri Thanh stressed. “It requires the collective will of Government, organisations, individuals and the business community.”

In terms of costs, according to Dr Vo Tri Thanh, green transformation is a capital-intensive endeavour. It requires a coordinated approach that touches every aspect of modern life from how we work and consume to how we produce, affecting the whole of society, but especially businesses.

To support businesses on this path, Dr Thanh emphasised the importance of both clear policy and well-managed communication.

There is a pressing need to raise awareness among businesses and the wider public about the green economy and the principles of green finance. At the same time, policy refinement must be treated as an urgent task if the transformation is to succeed.

Echoing these views, Dr Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council and Director of the Carbon Finance Development Consulting Institute (CODE), noted that while Vietnam speaks extensively about green and sustainable growth, action often falls short of rhetoric.

He pointed to examples in renewable energy finance, such as green bonds and green credit offered for solar and wind power projects, which, in practice, operate much like conventional loans with standard requirements for collateral, interest rates and terms, and no preferential treatment or incentives.

Dr Nghia further highlighted estimates from the World Bank, which suggest that Vietnam will require between US$360–400 billion to meet its energy transition and emission reduction targets by 2030. At present, government support packages and green credit offerings from banks fall short of this monumental funding need.

As it stands, green credit accounts for only 4.5 per cent of the total outstanding loans in the economy, well below the Government’s 2025 target of 10 per cent.

In light of this, Dr Nghia called on the Ministry of Finance to place greater focus on the green transformation agenda. He stressed the importance of preparing sufficient capital to help businesses make meaningful progress—particularly those investing in technology-driven solutions.

At the 2021 United Nations Climate Change Conference (COP26), Vietnam joined 147 other countries in pledging to achieve net-zero emissions by 2050. The country also signed on to the Global Methane Pledge with 103 nations, the Glasgow Leaders’ Declaration on Forests and Land Use with 140, the Global Coal to Clean Power Transition Statement with 48, and the Global Alliance for Adaptation Action with 150 countries.

Article published from the original article in Tatler Vietnam April 2025 issue

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