The issuance of VND 2,000 billion in green bonds contributes to developing the green financial market, promoting sustainable development and supporting the economy in reducing emissions.
Mr. Vu Quang Dong – Deputy Director of Vietcombank’s Capital and Market Division shared about the success factors of the green bond issuance worth VND 2,000 billion in 2024.
– Why did Vietcombank decide to issue green bonds at this time, sir?
– In 2021, at the 26th United Nations Framework Convention on Climate Change Conference (COP26), for the first time the Government made a commitment on climate change, making Vietnam a country have zero net emissions by 2050. This is considered a strong commitment in pursuing sustainable development.
Mr. Vu Quang Dong – Deputy Director of Vietcombank’s Capital and Market Division. Image: Vietcombank
In the banking sector, the State Bank issued a Circular guiding the implementation of environmental risk management in credit granting activities of credit institutions and foreign bank branches effective from June 1, 2019. 2023. The legal framework for sustainable development of the banking system in Vietnam is also gradually being built and increasingly improved, creating motivation for the entire banking industry to practice sustainable development.
Sticking to its orientation, Vietcombank, as a leading commercial bank, always places sustainable development and environmental protection as core goals in its operating strategy. We see an increasing need to invest in environmentally friendly projects, and green bonds are an effective tool to mobilize capital to support these projects.
Through the issuance of green bonds, we hope to actively contribute to Vietnam’s sustainable development and spread green finance to the community.
– So what is the structure and special elements of the green bond that Vietcombank just issued?
– This is Vietcombank’s first green bond issuance. At the same time, this is the first bank in the country to issue green bonds in compliance with Vietnamese laws and voluntarily comply with the Green Bond Principles of the International Capital Markets Association (ICMA).
Vietcombank’s green bond framework is advised by the international organization Global Green Growth Institute (GGGI) and highly appreciated by the prestigious credit rating organization S&P Global with a Medium Green rating (the second highest level on the scale). six levels according to S&P Global’s Shade of Green rating framework). This confirms the quality, compliance, and high-level transparency in project selection, management of disbursement of funds from issuance, and Vietcombank’s governance and reporting regimes.
This round of our green bonds worth VND 2,000 billion is designed in a structure that does not require collateral and does not require payment guarantees. The entire value of this offered bond was purchased by investors, showing their great confidence in Vietcombank’s management capacity and commitment.
– Specifically, which projects will be funded from this green bond source?
– Based on ICMA’s Green Bond principles and Vietnamese law, this capital will be allocated to projects in 7 areas including renewable energy, sustainable transportation, water management, green buildings, waste management, sustainable agriculture, forestry and fisheries and energy efficiency. These are all industries that have a strong impact on the environment. Projects need to clearly demonstrate positive effects on the environment and be consistent with Vietnam’s sustainable development goals. Vietcombank will thoroughly evaluate each project before approval and disbursement.
– How does the process of evaluating and selecting funded projects take place?
– We apply a very strict evaluation process. First, selected projects must meet the criteria of the Green Bond Framework, developed in consultation with GGGI and evaluated by S&P. This framework is tightly integrated with the bank’s credit approval process, with the participation of ESG expertise representatives from Vietcombank’s departments.
We also require customers to conduct environmental and social impact assessments as well as develop measures to minimize negative impacts on the environment, to ensure that projects not only meet green standards but also implement green standards. contribution to the sustainable development of the environment. Project approval is strictly carried out according to Vietcombank’s regulations.
Vietcombank headquarters. Image: Vietcombank
– How will Vietcombank monitor and report the effectiveness of using capital from this green bond?
– Monitoring and reporting are carried out transparently and strictly. Every year, Vietcombank will publish audit reports on capital allocation and environmental impact assessment reports of funded projects to the public. The information includes disbursed capital, type of project allocated capital, capital allocation ratio and also opinions from the audit side on the appropriateness of capital allocation with our green bond framework. In addition, the undisbursed capital will be managed according to regulations and ensure transparency throughout the life of the bond.
– What plans does Vietcombank have in the future to expand this green strategy?
– We will not stop at issuing green bonds. Based on Vietcombank Development Strategy to 2025, orientation to 2030, focusing on building a green banking strategy and diversifying green financial tools, perfecting criteria and policies to direct credit flow to businesses that use new technology, have low carbon emissions, are able to compete in the international market, businesses invest in the fields of renewable energy, clean energy, green infrastructure, and startup community to contribute Protect the environment, improve the efficiency of resource and energy use.
For us, sustainable development is not just a trend but a responsibility and commitment to the community, contributing to creating a sustainable Vietnam for future generations.
– How do you evaluate Vietcombank’s role in promoting green finance in Vietnam?
– As a leading bank in Vietnam, we recognize our responsibility to develop the green financial market, promote sustainable development and support the economy in reducing emissions. By December 31, 2023, Vietcombank’s total outstanding green credit balance reached VND 46,100 billion, equivalent to 3.6% of the total outstanding debt, of which 84% of the green credit structure is renewable energy. The issuance of green bonds worth VND 2,000 billion has been successful in a short time, receiving positive responses from investors and reputable international organizations, affirming the quality and leading role of Green Bond. Vietcombank in this field.
We will make efforts to promptly introduce new products and new steps to meet the trend of green finance and green economy and commit to actively contributing to building a sustainable and friendly Vietnamese economy. with the environment.