Opportunities to attract green capital.

The market for green financial products still has room for growth and opportunities for development, especially as the demand for capital to implement green transformation continues to increase.

Many countries have launched various initiatives to encourage capital flows into places that meet ESG criteria.

ESG investment fund adds new member.

Eastspring Vietnam – the largest fund management company in the Vietnamese market by asset value under management (AUM) – is accepting subscriptions for its initial public offering (IPO) of the Eastspring Investments Vietnam ESG Equity Fund (EVESG). Subscriptions began on August 9th and are expected to run until October 28th. A minimum of 5 million units will be offered, with no upper limit, representing a minimum fundraising of VND 50 billion.

“Besides focusing on growth prospects and financial foundations, the Fund will integrate analysis and evaluation of ESG (environmental, social, and governance) related factors into its investment decision-making process. The Fund believes that a company with risk management policies and opportunities related to ESG will create long-term value for the business, thereby bringing sustainable benefits to investors,” Eastspring Vietnam shared regarding its analysis and evaluation process in investment decision-making.

Thus, after nearly two years, Vietnam has another investment fund applying ESG standards in portfolio selection. With the upcoming launch of the EVESG fund certificate, UVEEF – a fund certificate belonging to the United ESG Vietnam equity fund of UOB Asset Management (Vietnam) Joint Stock Company – will no longer be "alone" in this product niche.

UVEEF is currently the first and only open-ended fund to apply parallel ESG evaluation standards. The fund was granted a certificate of establishment by the State Securities Commission in November 2022 and has a portfolio value of over VND 410 billion (according to the latest update).

Previously, since 2017, the Ho Chi Minh City Stock Exchange (HoSE) officially introduced the Vietnam Sustainable Development Index (VNSI) to select the 20 companies with the best ESG performance. However, after 7 years, no ETF fund has yet chosen to benchmark against this index.

In the corporate bond market, there have been several successful transactions, such as two Vietnamese companies successfully issuing green bonds according to ICMA's green bond principles: EVNFinance with a green bond issue worth VND 1,725 ​​billion and BIDV with a capital raised of VND 2,500 billion. Others have previously successfully issued bonds on the international market, such as Vinpearl (USD 425 million) and BIM Land (USD 200 million)...

The market dictates the course of events.

- Dr. Vo Tri Thanh, Director of the Institute for Brand and Competition Strategy Research

Green development is not only a strong political commitment of the entire nation, but also a mandate from the market itself, a demand from consumers for greener and safer products; a requirement from lenders… Green transformation is therefore an inevitable trend for businesses.

Up to 80% of financing requires meeting ESG criteria before funding can be granted. This imperative is extremely urgent. For businesses, it's not just about survival, but also about seizing new opportunities through green development.

Regarding the credit channel, according to Mr. Nguyen Tung Anh, Head of the Green Credit and Financial Services Research Department at FiinRatings, green credit has recorded exceptional growth compared to overall credit growth. However, the proportion of green credit only accounts for 4.32% of the total outstanding loans of the entire economy .

Overall, across stock, bond, and credit markets, the scale of green and sustainable financial products in Vietnam remains relatively small compared to the region. However, according to FiinRatings representatives, this indicates that green financial products still have significant room for growth.

A joint effort to boost green capital mobilization.

The market for green financial products still has room for growth and opportunities, especially as the demand for capital to implement green transformation continues to increase. However, like any investment project, whether green or not, businesses themselves need to be proactive and balanced.

With experience in mobilizing green capital, Mr. Nguyen Anh Tuan, Chief Financial Officer of The PAN Group, pointed out two factors that businesses need to pay attention to. These are proactive capital sources, meaning that if the business is suitable, capital will flow to it naturally. In addition, to access financial institutions, businesses must have a certain foundation in sustainable development and sustainable governance – something that the representative of The PAN Group believes "Vietnamese businesses sometimes lack."

In addition, a policy to stimulate the market is also essential. Many countries have introduced various initiatives to encourage capital flows into places that meet ESG criteria. The Securities and Exchange Commission of Thailand (SEC) introduced several new policies for ESG investment funds in early December 2023 and further enhanced the conditions at the end of June to encourage investor participation.

This incentive includes a tax deduction of up to 300,000 baht and allows ESG investments held for at least five years to be tax-exempt on interest income when sold. This policy quickly proved effective, with the launch of 22 new ESG funds in the fourth quarter of 2023 and the raising of 6 billion baht in the first month.

In Vietnam, the development of a legal framework for green economy and green finance has been a long-standing concern. In 2012, the Government issued Decision No. 1393/QD-TTg approving the National Strategy on Green Growth for the period 2011-2020 and a vision to 2050. Circular 101/2021/TT-BTC, which regulates securities service fees at stock exchanges, also reduced the fees for registration, listing, trading, and deregistration of securities by 50% for issuers and investors of green bonds.

Developing a green capital market is one of the goals included in the Stock Market Development Strategy to 2030. During his working visit to Singapore last week, Minister of Finance Ho Duc Phoc also particularly emphasized his interest in how to raise green bonds and operate a carbon credit trading market, and expressed his desire to receive support from Singapore in research, training, and personnel development.

The head of the Ministry of Finance also affirmed that the Ministry of Finance and the State Securities Commission always pay attention to policies and create favorable conditions and mechanisms for businesses to raise capital, as well as strengthen green development and sustainable development.

Source: https://baodautu.vn/co-hoi-huy-dong-dong-von-xanh-d222178.html