Moody's Ratings, VNBA work on green finance

Moody's Ratings, VNBA work on green finance

The Vietnam Banks Association (VNBA) and Moody's Ratings agreed to boost cooperation on green finance through seminars and technical exchanges.

View of the meeting. The banking industry plays a key role in Việt Nam's green transformation as it mobilises and allocates financial resources effectively to green sectors. — Photo VNBA

The Vietnam Banks Association (VNBA) on Thursday worked with the international credit rating agency Moody's Ratings to discuss issues related to green finance and the direction of sustainable financial development in the Vietnamese banking industry.

Speaking at the meeting, Nguyễn Thanh Sơn, Director of the VNBA’s Training Centre, said that in the context of the global acceleration of green transformation, Việt Nam considers the process an inevitable trend and a strategic driver to meet the country’s goal of sustainable development, especially the commitment to achieve zero net emissions by 2050.

The banking industry plays a key role in this process as it mobilises and allocates financial resources effectively to green sectors.

Green finance in Việt Nam is currently based on two main pillars, green credit and green bonds. As of December 31, 2024, nearly 50 credit institutions deployed green loans, focusing mainly on renewable energy and clean energy projects. Meanwhile, the green bond market is still modest compared to its potential but is receiving increasing attention from both banks and businesses, aiming to build an effective long-term capital raising channel.

“Notably, many Vietnamese banks have begun to practise and integrate environmental, social and governance (ESG) standards into their internal risk management processes,” Sơn said.

According to Sơn, Circular 17/2022/TT-NHNN guiding the implementation of environmental risk management in credit granting activities of credit institutions and foreign bank branches of the SBV is an important legal foundation for credit institutions to gradually specify ESG criteria in their operations.

The Global Head of Sustainable Finance for Moody's Ratings, Rahul Ghosh, said the company has integrated ESG into the global credit rating system, and updated the prominent trends in sustainable finance in the Asia-Pacific region.

Ghosh said that Moody’s Ratings has currently rated more than 800 financial institutions and issued in-depth reports, in which ESG is identified as a factor with a long-term impact on credit profiles.

At the meeting, the VNBA and Moody’s Ratings agreed to continue to strengthen cooperation, through specialised seminars and technical exchanges, to support the Vietnamese banking system to improve its adaptive capacity in the current volatile transition period. 

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