Hanoi (VNA)🧔 – Green growth is no longer a choice but a pressing necessity, particularly for developing nations like Vietnam, according to Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.

Recognising the pivotal role of banking credit in realising the national green growth strategy, the SBV began integrating sustainability goals into its credit policies as early as 2015. These efforts include directives on promoting green credit and managing environmental and social risks in lending activities. At the forum, held on May 21, the Deputy Governor said that the transition to a green growth, in which the economic development is combined with environmental protection and the efficient use of resources, is an inevitable trend for Vietnam to move towards a sustainable, inclusive and prosperous future.

Strong growth in green credit

According to the SBV, green credit has grown significantly in both scale and pace. From just 180 trillion VND (7.1 billion USD) in 2017, outstanding green loans across 58 financial institutions had reached over 704 trillion VND (28 billion USD) by the end of March, a 3.5% increase from the end of 2024. It accounts for 4.3% of the banking system’s total outstanding credit. The average annual growth rate of green credit stood at over 21% during 2017–2024, outpacing overall credit growth. On environmental and social risk assessments, 57 institutions had assessed nearly 1.3 million loan applications, a fifteen-fold increase from 2017, totaling 3.62 quadrillion VND (143 billion USD) in credit as of March 31.

Commercial banks embrace ESG standards

The Bank for Investment Development of Vietnam (BIDV) has adopted ESG (environmental, social, and governance) standards and built a sustainable finance framework with six focus areas, including strategic governance, sustainable products, and carbon neutrality. By end-2024, BIDV’s green credit reached 80.87 trillion VND (3.2 billion USD), representing 12% of the sector’s total green loans. It financed 1,600 clients with nearly 2,000 green projects, primarily in renewable energy and sustainable infrastructure.

Similarly, Agribank has established an ESG implementation committee and issued internal ESG standards. From 0.9% in 2020, the bank’s green loan ratio rose to 1.7% in 2024. In Q1 2025, Agribank led the sector in terms of green loan clients, with over 41,600 customers and outstanding loans of nearly 29.3 trillion VND (1.17 billion USD), mainly supporting renewable energy, clean energy, and sustainable forestry.

Policy frameworks

Dr Michaela Baur, Country Director of GIZ Vietnam, noted that clear green sorting is essential for directing capital toward sustainable development and for Vietnam’s access to global green finance. Since 2017, GIZ has supported the SBV in developing green credit statistics, a beginning of a green classification system for the banking sector. She emphasised the need for continued capacity building, stronger institutional frameworks, and incentives to expand green lending practices across banks.

Nguyen Minh Chau, Deputy CEO of Military Bank (MB), said that the bank aims to become a leading green bank with full ESG integration and carbon neutrality by 2030. MB is focusing on climate finance solutions, leveraging its strength in digital technology. She called for more support from the SBV, including ESG training programmes, experience-sharing seminars, and incentive mechanisms.

Launch of ESG risk management handbook

A key highlight of the forum was the launch of a new handbook on environmental and social risk management in lending, co-developed by the SBV and the International Finance Corporation (IFC). The guide outlines principles, risk management systems, performance indicators, and stakeholder engagement strategies aligned with international best practices. Deputy Governor Tu described the handbook as a practical tool that offers clear guidance for credit institutions to build tailored green lending procedures. He said it would enhance ESG risk management and support effective implementation of the banking sector’s green growth action plan./.