The “Sustainable Finance Forum”, organized by Vietnam Banks Association (VNBA) in partnership with the Global Reporting Initiative (GRI) and the International Finance Corporation (IFC) and sponsored by the governments of Australia, Japan and Switzerland, held on May 28 in HCM City, provided a venue for participants to examine how regulatory and market developments can help promote financial returns and sustainable finance.

The forum brought together a range of stakeholders and participants, including representatives from the Ministry of Planning and Investment, the State Bank of Vietnam, the State Securities Commission, local banks, and the private sector, including Ayala Energy, Dragon Capital, and MSCI.

Given the country’s investment deficit regarding sustainable development projects, there is a growing need for innovative solutions that open up opportunities for private investment into economically, socially, and environmentally-sustainable projects, delivering jobs and inclusive growth as well as helping underpin achievements in the Sustainable Development Goals agenda.

“While banks have a pivotal role to play in helping unlock opportunities to link investment to sustainable projects in Vietnam, many still have significant scope to adopt international sustainability practices to better manage environmental, social and corporate governance risks within their portfolios and develop customized financial products for this market,” said Mr. Nguyen Toan Thang, VNBA General Secretary.

A key feature of the forum was its focus on green growth strategies and Vietnam’s progress in attracting climate finance, given the scale of the climate challenge facing the country.

According to a recent IFC assessment, the climate-smart business investment potential in Vietnam alone is an estimated $753 billion, with the majority ($571 billion) in meeting the country’s low-carbon transportation infrastructure needs by 2030.

Potential investment in renewable energy totals $59 billion, with over half of this ($31 billion) in solar PV and another $19 billion for small hydropower projects, while new green buildings represent an almost $80 billion investment opportunity.

While Vietnam must increase the effectiveness of climate finance and diversify funding sources, the lack of effective domestic funding for targeted investments inhibits the leveraging of external funds. As such, building an enabling policy environment will be critical to accessing green growth finance from private investors.

“We are working with both regulators and financial institutions to help create a market for climate business in Vietnam and across the East Asian region through a combination of innovative investment and advisory products,” said Mr. Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Laos.

VN Economic Times/VNN