As Vietnam pursues rapid and sustainable economic growth, improving growth quality, advancing the green transition, promoting the circular economy, and adopting environmental, social and governance (ESG) standards are becoming increasingly urgent.

Agribank allocates significant capital to the green agriculture sector. (Photo: VNA)

Green credit gains traction

According to Dr. Le Duy Binh, Director of Economica Vietnam, as the country eyes double-digit GDP growth over consecutive years, the challenge lies not only in maintaining rapid growth but also in ensuring its quality. ESG standards are therefore becoming a key component of business and economic development strategies.

Binh said the Government plays a pivotal role in driving the green transition. With medium-term public investment for 2026–2030 projected at 8.22 quadrillion VND (312.3 billion USD) and regular expenditures estimated at 10.06 quadrillion VND, the State is both a policymaker and the economy’s largest consumer.

Through public procurement, capital allocation and project selection, it can encourage businesses to adopt greener and more responsible practices.

Green consumption is also emerging as a new growth driver. Vietnam’s retail market reached around 7 quadrillion VND in 2025, while about 84% of consumers are willing to pay more for environmentally friendly products and those backed by ESG commitments.

At the same time, stricter emission standards, traceability requirements, environmental regulations and labour standards are becoming increasingly important in export markets, requiring businesses to adapt to remain competitive in global supply chains.

Meeting these demands requires significant financial resources. Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Ngoc Canh said the central bank has introduced measures to promote green credit and strengthen environmental and social risk management across the banking sector.

The SBV is also seeking Government approval for a decree proposing a 2% interest-rate subsidy from the state budget for private enterprises, household businesses and individual business owners borrowing bank loans for green and circular economy projects and ESG implementation.

The efforts have produced positive results. By the end of the first quarter of 2026, 82 credit institutions had outstanding green loans totaling 828 trillion VND. Green credit recorded average annual growth of more than 20% during 2017–2025.

Outstanding loans subject to environmental and social risk assessments exceeded 5.7 quadrillion VND, accounting for more than 30% of total credit in the economy.

Commercial banks have also expanded green financing. Vietcombank reported that its green credit portfolio grew more than fourfold between 2020 and 2025. The bank plans to continue prioritising major infrastructure, transport and renewable energy projects to support green growth and energy transition.

Agribank, meanwhile, is implementing a 3-trillion-VND green credit programme offering preferential interest rates for rooftop solar systems, electric vehicles, forestry development and other environmentally friendly projects. It has also launched a 50-trillion-VND preferential credit package for clean and high-tech agriculture.

Further reforms needed

Despite progress, challenges remain. Pham Tuan Anh, Sustainability Director at GreenFeed Vietnam, said businesses need a stable policy environment, streamlined administrative procedures and easier access to green finance to support investment in sustainable projects.

Pham Thi Thanh Tung, Deputy Director of the SBV’s Credit Department for Economic Sectors, noted that guidance on identifying circular economy projects and ESG implementation remains incomplete. In addition, the green bond and carbon markets are still developing, while the capacity of many financial institutions and businesses to implement green finance initiatives requires further improvement.

Experts said directing capital flows toward sustainable sectors will help enterprises transform production models, enhance competitiveness and build a foundation for high-quality growth in the years ahead.

VNA