Businesses need to transform themselves before they want to attract 'green' capital

DNVN - According to experts, if businesses do not transform themselves into green, the money flowing into the business will not be "green". The business itself must transform into green first, then the funding sources for the business's green transformation activities will become green finance.

The key role of business

According to Mr. Nguyen Ba Hung - Chief Economist in Vietnam of the Asian Development Bank (ADB), green finance - a global trend towards sustainable development - is recording positive progress in Vietnam. However, the scale of development is still very modest. Currently, only about 4.5% of total outstanding bank loans in Vietnam are considered green finance - quite far from the target of 10% by 2025.

In the bond sector, the number of green and sustainable bonds issued is still limited, with short terms of 1-3 years. This modesty shows that the room for green finance development in Vietnam is still very large.

However, according to Mr. Hung, a positive sign is that banks not only apply international green standards but also develop their own criteria, combining financial assessment with environmental and social factors for about 21% of current loans. This is an important first step, creating the premise for sustainable development.

Experts emphasize that green finance can only expand if businesses – the center of production and business activities – transform themselves into green. Meeting environmental and social criteria is a prerequisite for businesses to access green capital sources.

Mr. Nguyen Ba Hung - Chief Economist in Vietnam of the Asian Development Bank (ADB).

"If businesses do not transform themselves into green, the money flowing into the business will not be "green". The business itself must transform into green first and the funding sources for the business's green transformation activities will become green finance. This demonstrates the very important role of businesses directly involved in production and business activities," Mr. Hung analyzed.

In particular, for export enterprises, if they do not make a green transition, the risk of losing markets and reducing competitiveness will be very high, especially when mandatory regulations from international markets are increasingly strict.

Roadmap to green finance

To make a green transition, Mr. Hung recommends that businesses start by building a sustainable development report (PTBV), measuring emissions to determine an improvement roadmap. This is a basic but fundamental step, helping businesses control and improve operational efficiency.

Next, businesses can take advantage of existing financial resources such as bank credit and negotiate to convert them into green loans, or issue green bonds, sustainable bonds for large businesses. This not only helps businesses demonstrate their commitment to transformation but also contributes to the development of green finance in general.

At the same time, businesses need to actively participate in and manage green supply chains well. For businesses in the chain of international partners, complying with green criteria will help improve their position. For businesses with their own supply chains, this is an opportunity to expand green criteria, even build an independent value chain.

Finally, businesses need to be ready for the carbon market, which the Government plans to pilot in 2025 and officially implement in 2027. This is particularly important for businesses exporting to the EU, where the Carbon Border Adjustment Mechanism (CBAM) will become mandatory.

"With this roadmap, businesses not only meet international standards but also open up opportunities to improve competitiveness and develop sustainably in the long term," the expert emphasized.

According to Mr. Hung, time is running out for businesses because from 2025-2027, international regulations will be tightened, putting great pressure on Vietnamese businesses. If they do not transform quickly, the competitiveness of businesses in the region will increasingly decline.

"However, the opportunities are also huge. With the support of banks and international green capital sources, along with a clear roadmap, Vietnamese enterprises can fully take advantage of this trend to both develop sustainably and improve their competitiveness in the international arena," Mr. Hung said.

Moonlight

Source: https://doanhnghiepvn.vn/chuyen-doi-so/kinh-te-so/doanh-nghiep-can-chuyen-doi-minh-truoc-khi-muon-thu-hut-nguon-von-xanh/20241204083715500