Policies for a robust greener transition

Policies for a robust greener transition

The green transition and sustainable innovative startups are global trends and essential requirements in Vietnam’s socioeconomic development.

The current policy system supporting innovative startups has achieved some initial results. However, there remain many bottlenecks that need to be addressed to create a more favourable environment for innovation linked to sustainable development.

Assoc. Prof. Dr. Nguyen Dinh Tho, institute of Strategy and Policy on Agriculture and Environment

Legal frameworks and strategies empower Vietnam to reform traditional industries, foster green entrepreneurship, and build a resilient economy aligned with international environmental standards and digital transformation goals.

These include the National Green Growth Strategy for this decade and beyond, which provides the foundation for Vietnam’s shift to sustainable, inclusive growth; the Law on Environmental Protection, which introduced key legal provisions on circular economy and extended producer responsibility (EPR); and the Law on Support for Small- and Medium-Sized Enterprises, which outlined policies for innovative startups.

Other frameworks introduced in recent years include a national project supporting the innovative startup ecosystem, which fostered innovation centres and incubators supporting green and sustainable initiatives; the Fourth Industrial Revolution Strategy to 2030, emphasising digital transformation and emerging technologies like AI and big data; and Resolution No.57-NQ/TW, a highlight strategy on science, technology, and innovation as central to Vietnam’s development strategy.

To encourage and develop green startups in Vietnam, improving relevant policies is essential. Existing mechanisms can better support innovative startups to thrive, while making practical contributions to the country’s green transition and sustainable development goals.

Firstly, public procurement regulations are a vital tool for promoting sustainable practices within the economy. To encourage green startups to participate in public projects, detailed guidelines on sustainable procurement should be issued across sectors such as construction, technology, and agriculture. Giving preference to green startups during the bidding process through technical bonus points and environmental profile criteria can create more opportunities for these businesses to join major public projects.

Links should be boosted between large enterprises and green startups. Large businesses can provide startups with financial resources, infrastructure, and customer networks, while startups offer innovative and eco-friendly solutions. The government could implement a green acceleration programme to connect large enterprises with startups, alongside offering tax or credit incentives for companies investing in or collaborating with startups in this sector.

Meanwhile, sustainable investment funds play a critical role in providing capital for green innovation startups. The government should activate a relevant innovation fund, involving both public and private stakeholders, to support creative enterprises. Venture capital funds should apply environmental, social, and governance criteria to ensure that investments not only generate profits but also contribute to environmental protection and social development.

The government can also launch national media campaigns to encourage green consumption and sustainable startup models. Education on sustainable entrepreneurship should be incorporated into high school and university curricula, helping students understand new trends in entrepreneurship and environmental solutions. A specialised e-commerce platform for green products can help startups reach a broader market.

Institutions and policies supporting green startups must be improved, as the current institutional and legal framework for startups remains inadequate and unclear. To foster innovation and sustainable development, laws and regulations should be reviewed and revised to better encourage the growth of sustainable businesses, especially in green technology, renewable energy, and waste treatment.

Furthermore, building a supportive ecosystem is vital for the development of green startups. The government should establish startup and innovation support centres across regions and localities. Strengthening connections among businesses, research institutions, government, and investment funds will help create a sustainable startup ecosystem, enabling startups to find investment and collaboration opportunities.

Meanwhile, to provide financial support for green startups, the development of green financial tools - such as green bonds, credits, and sustainable startup investment funds - is necessary. The government can encourage private sector participation in eco-friendly initiatives by offering incentives in tax, land use, and credit for companies producing and consuming green products.

Additionally, international integration and cooperation are essential for Vietnam to access advanced green technologies and learn from successful global models of sustainable entrepreneurship. The government should work with international organisations and developed countries to access green technologies, enabling local businesses to develop innovative solutions in renewable energy, waste treatment, and sustainable production. Vietnamese digital technology and green startups should be encouraged to invest abroad and join global value chains, thus increasing the nation’s influence in the international community.

Finally, the government should encourage digital transformation in green startups by supporting the development of digital infrastructure and providing access to open technology platforms, cloud computing, AI, the Internet of Things, and blockchain to optimise production processes, supply chains, environmental data management, and ecological impact monitoring.

Alongside that, subsidies or fee reductions for using digital platforms should be available for small and newly established environmental startups. The government should also promote research and development and relevant tech transfer through innovation support initiatives in cleaner production, smart agriculture, renewable energy, bio-based products, and green materials.

Improving policies to support green startups is a key factor in promoting the sustainable development of the country. It helps them grow and creates opportunities for the green transformation of the economy, while also contributing to the achievement of both national and global development goals.

VIR