VIETNAM

The State Bank of Vietnam’s Dispatch No. 9050/NHNN-TD, issued in 2017, mandates that all credit institutions (such as banks and financial institutions) in Vietnam submit quarterly reports covering two key areas:

1.    Green sector lending: Banks must report their credit (loan) extension to 12 designated ‘green’ sectors. These sectors are chosen based on their contribution to environmental sustainability and may include areas like renewable energy, energy efficiency, sustainable agriculture and waste management. By tracking loans to these sectors, the government aims to monitor and encourage financial support for projects that align with environmental and climate goals.
2.    Environmental and social risk assessment: When extending credit, banks must conduct assessments of environmental and social risks associated with the loans. This involves evaluating the potential environmental impacts and social implications of the projects they are funding to ensure they meet sustainability criteria. These assessments help reduce financing for projects that might cause significant environmental harm or negatively impact communities and promote responsible lending practices.

This dispatch is part of Vietnam’s broader strategy to integrate ESG considerations into the financial sector, ensuring that credit flows support sustainable development and align with national environmental and social objectives.

In June 2022, Vietnam introduced its Circular Economy Development Scheme, setting ambitious environmental targets to enhance sustainability and reduce waste. The scheme is part of Vietnam’s ongoing commitment to meeting climate and environmental goals, aligning with global trends in circular economy practices. Key objectives include reducing greenhouse gas (GHG) emissions per GDP by at least 15% by 2030. Other targets focus on tackling plastic waste: by 2025, the scheme aims for 85% of plastic waste to be reused, recycled, or treated, cutting plastic waste in oceans by half and reducing non-biodegradable plastic bags and disposable plastics.

Supporting this shift, Extended Producer Responsibility (EPR) regulations came into effect in early 2024. Under EPR, producers and importers are now accountable for managing waste throughout the entire life cycle of their products, from manufacturing to disposal. This framework incentivises companies to design more sustainable products and reduce waste, shifting responsibility away from consumers and encouraging businesses to adopt sustainable practices. 

In terms of energy development, Vietnam's Prime Minister approved the long-awaited National Power Development Plan VIII (PDP8) in May 2023. It sets ambitious goals for renewable energy and LNG expansion in the next three years, including phasing out coal by 2030. Between 2030 and 2050, Vietnam must make profound shifts in energy production, manufacturing, agriculture, infrastructure, and urban planning. This will demand unprecedented investment, technology transfer, international cooperation, and public-private partnerships to mobilise resources and technical expertise.

Despite government commitments and growing awareness, ESG adoption in Vietnam remains low, particularly among small and medium-sized enterprises. Larger enterprises, such as foreign-invested, public, and export-oriented companies, are more advanced in ESG implementation. Key barriers to broader adoption include a lack of knowledge and expertise, weak governance structures, and regulatory challenges, with unclear and non-transparent regulations hindering business progress.