Green governance, an attractive channel to access green capital

With the theme "Unleashing Green Finance and Green Governance", the 6th annual forum (AF6) in 2023 is an opportunity for entrepreneurs, business leaders and managers to meet, where speakers and participants will discuss the above topic.

The event was organized by the Vietnam Institute of Directors (VIOD) in Hanoi on November 22, 2023.

Green growth requires the mobilization of diverse and abundant financial resources. In particular, the green financial market is an important capital channel for green growth in all economies , but this is a relatively new issue for members participating in the stock market in particular and the financial market in general in Vietnam.

In recent years, Vietnam has mobilized resources from the private sector and international organizations through the formation and development of the green financial market. To date, the green financial market in Vietnam has formed a foundation and developed with 3 components, including: green credit, green stocks, and green bonds.

VIOD representative said that perfecting mechanisms and policies to develop green financial markets and products, thereby helping to mobilize green capital flows from investment funds into the stock market, is considered a priority of both the Government and the business community.

In addition, green governance (sustainable governance - governance of values that impact the environment and society) is considered by investors and investment funds as a key element, a standard and a necessary condition for making investment decisions, instead of being considered a bonus condition as before.

At the forum, Ms. Ha Thu Thanh - Chairwoman of VIOD Board of Directors shared more about issues related to green governance.

According to Ms. Thanh, for Vietnam, the ability to attract green financial resources from foreign private investment funds is limited. Therefore, green governance is an issue that businesses are interested in and refer to in order to access green capital.

In particular, green management is aimed at creating products that have a social impact, also known as socially responsible products.

Thus, green governance goes beyond traditional governance, strategic governance... in which the Board of Directors is the supreme leadership body, orienting strategy, effectively monitoring strategy and ensuring long-term development efficiency for the benefit of investors and shareholders.

Green governance, an attractive channel to access green capital - 1

As a unit implementing green transformation, Mr. Pham Nhu Anh - General Director of Military Commercial Joint Stock Bank (MB) said that recently, MB has also been actively hiring international organizations to implement green transformation.

Accordingly, MB builds a standard ESG framework strategy and commits to implementing it systematically. At the same time, it develops scenarios and builds a risk management system for environmental and social fluctuations.

In addition, MB also invests in new technology infrastructure to support governance and operations according to ESG standards. Integrating international standards into internal regulations, information disclosure, annual reports and sustainability reports, digitalized internal operations...

According to Mr. Pham Nhu Anh, in the coming time, MB will step up support for businesses in the fields of energy, industry, agriculture... Therefore, to access green capital from MB, businesses need to provide full product licenses and certifications. At the same time, meet the environmental risk management framework, green credit criteria of MB...

MB General Director also pointed out current difficulties such as the lack of a clear legal framework on the national green classification list to serve as a basis for credit institutions to mobilize capital and grant green credit.

Green investment projects require long capital completion times, large investment costs, and high market risks, so credit institutions have difficulty balancing capital sources for lending, while there is a lack of mechanisms and policies to support credit institutions in accessing long-term, preferential capital sources, especially mobilizing international resources to provide long-term and preferential interest rate credits for green industries and sectors.

MB General Director recommends that the State Bank and management agencies continue to improve the legal framework, promptly issue guidelines for green banking development and "green classification criteria" taking into account the conformity of good practice standards so that credit institutions can apply loans for green projects in accordance with international standards.

Bao Anh

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