International Financial Hub: Unlocking Global Green Capital for Banks

In your opinion, will the establishment of Vietnam’s two international financial centers open up opportunities for the development of green banking?

I believe this marks Vietnam’s true gateway to sustainable financial integration. Previously, domestic banks faced challenges in accessing international green capital due to differences in reporting standards, environmental and social risk management, and a lack of mechanisms for identifying green projects. However, with the international financial centers operating under ESG and IFRS (International Financial Reporting Standards), we will share a common language with global investors.

This enables Vietnamese banks to directly access capital from climate funds, ESG funds, and development financial institutions like IFC, ADB, or green bond funds in a more transparent and competitive manner.

Additionally, the international financial centers will establish standardized infrastructure for green asset transactions and identification, where sustainable financial instruments such as green bonds, carbon credits, and impact investment funds are listed and traded publicly. As a result, Vietnamese banks can evolve beyond traditional lending to become “green financial architects,” acting as intermediaries between international investors and domestic businesses.

More importantly, adopting IFRS will enhance international market confidence. When Vietnamese banks’ financial reports include climate risk assessments and ESG compliance, cross-border transaction costs will significantly decrease. This is a pivotal step in elevating Vietnam’s banking system on the global financial map.

What is the biggest barrier currently preventing Vietnamese banks from accessing international green capital?

The largest barrier is the lack of synchronization among institutions, standards, and capabilities. Green finance institutions are still in their early stages, and Vietnam lacks a nationally recognized green standard approved by the international community, leading to inconsistent green project criteria.

Reporting standards are another limitation, as IFRS is not yet widely implemented, making climate risks and emission impacts in credit portfolios non-transparent. International investors struggle to quantify the “greenness” of Vietnamese banks. Additionally, ESG assessment capabilities are limited, with many banks only conducting basic risk screening, lacking data, carbon lifecycle calculation models, and experts.

To overcome these challenges, it is essential to simultaneously improve institutions and national green standards, standardize reporting according to IFRS and ESG, and enhance green credit monitoring capabilities. Once these three factors are synchronized, global green capital will flow into Vietnam.

How should Vietnamese banks develop their green portfolios, especially with loans tied to net-zero emission targets, to promote green credit?

First, banks must shift their approach: green credit should not merely be about lending with minimal environmental harm but must become a core strategy in their business model, aligned with the nation’s net-zero emission goals.

Each bank should view its credit portfolio as a carbon map, where every loan has a measurable “emission footprint.” A renewable energy, clean transportation, or smart urban project should not only generate financial profits but also create quantifiable environmental value, reportable under ESG standards.

Furthermore, banks should not limit themselves to traditional green projects but should also engage in high-emission sectors like steel, cement, and transportation if companies have plans for technology transitions or renewable energy use. This aligns with the “transition finance” trend that major global financial centers are actively promoting.

Another noteworthy approach is sustainability-linked loans, where interest rates are adjusted based on a company’s achievement of ESG targets. Companies that reduce emissions more significantly benefit from lower interest rates. This mechanism incentivizes behavioral change, turning environmental goals into tangible business drivers.

Thank you very much!