“BIDV’s Leadership in Sustainable Finance: Driving Vietnam’s Green Growth”
The banking sector plays a pivotal role in Vietnam’s National Strategy for Green Growth for the period of 2021–2030, with a vision towards 2050. As one of the leading financial institutions in the country, BIDV recognizes its responsibility in supporting the government’s commitments to combat climate change.
Anticipating the “green” trend, BIDV has adopted international standards to establish itself as a green bank, notably developing products to promote sustainability. In its lending activities, as of March 31, 2024, BIDV is one of the largest providers of green credit in the market, with a total outstanding balance of VND 73,394 billion, accounting for 4% of BIDV’s total credit balance, and serving 1,698 clients across 2,069 green projects/schemes.
Building on the success of its green bond issuance in 2023, BIDV introduced the Green Deposit product in June 2024 to mobilize capital for emission reduction and environmental protection projects. With this product, BIDV pledges to utilize the entirety of the mobilized funds to finance green projects (including renewable energy, clean energy, and green buildings), contributing to environmental protection and fostering a consciousness about sustainable development within the community.
The Green Deposit has garnered significant interest from domestic and foreign enterprises since its launch. It offers flexible deposit terms of 6 months and above. Enterprises utilizing the Green Deposit will receive a certificate from BIDV, and the bank will also transparently disclose the projects funded through this product on its official website.
The Untapped Green Lending Space for Banks
The gap between the demands of businesses and the ability of domestic banks to provide green credit is significant. This is largely due to legal lending parameters and the availability of funding resources.
Green Finance: Unlocking the Potential of Sustainable Capital Markets
To foster the growth of the green capital market, Dr. Can Van Luc proposed several solutions, including the establishment of a refinancing fund and the introduction of a green credit package with preferential interest rates. These initiatives are designed to encourage and support sustainable investing practices, promoting a greener and more environmentally conscious economy.
90% of Banks Embrace ESG Practices
“The vast majority of banks, between 80-90%, have embraced the principles of ESG (Environmental, Social, and Governance) practices, either partially or fully. Notably, almost 50% of banks have established dedicated departments for managing environmental credit risk, showcasing a profound commitment to sustainable lending practices.”
