Training on green, social and sustainability bonds launched in Vietnam

The technical training, organized at the HCMC Stock Exchange, was the third in a series of training programs to enhance the capacity of the domestic green bond market.

Facilitated by the International Capital Market Association, the training "International experience on issuing green, social, and sustainable bonds" introduced existing global best practices and provided step-by-step guidance on green and sustainable bond issuance for over 70 delegates from government agencies, financial institutions, universities, and corporate issuers.

According to the Climate Bonds Initiative, the cumulative amount of green, social, and sustainable bonds issued globally reached US$3.8 trillion at the end of 2022.

As countries including Vietnam heighten their efforts to accelerate the net-zero transition, this number has the potential to massively increase by 2030.

In his opening remarks at the training workshop, Nguyen Hoang Duong, Deputy Director General, Banking and Financial Institutions Department of the Ministry of Finance, emphasized the efforts needed for Vietnam to continue economic growth and, at the same time, adapt to and mitigate the impacts of climate change.

With Vietnam's determination and commitment to implementing its green transition and sustainable development goals, the demand for green capital is expected to increase rapidly in the coming time to meet the capital needs of green projects that can have a positive impact on the environment, said Duong.

Nguyen Hoang Duong, Deputy Director General, Banking and Financial Institutions Department, Ministry of Finance, gives opening remarks at the training workshop. Photo courtesy of GGGI

In Vietnam, pursuing a climate-resilient and net-zero emissions development pathway would require additional investments of about 6.8% of GDP, or a cumulative $368 billion through 2040, according to the World Bank.

Sustainable finance markets could play a crucial role in mobilizing private finance for this transition. In recent years, the Ministry of Finance has taken strong initiatives to promote the sustainable bond market in Vietnam, with a focus on improving the regulatory landscape as well as incentivizing investments.

Mobilizing financial resources for green growth is one of the strategic tasks identified in the Finance Sector Strategy to 2030 to facilitate Vietnam's transition strategy towards net-zero while ensuring the balance between growth, social, environmental, and climate change adaptation goals.

Maria Cecilia Paña, Deputy Country Representative of GGGI Vietnam, said the organization would continue to be a trusted partner of the ministry in various initiatives that would reinforce the role of the capital market in mobilizing finance for the net-zero transition and green growth strategies.

The two-day training guided participants through essential market-based principles for issuing use-of-proceed bond instruments.

Discussions focused on best practices in preparing green, social and sustainability bond frameworks, establishing internal processes for project appraisal and proceeds management, as well as how to conduct post-issuance impact reporting.

Participants at the training event. Photo courtesy of GGGI

The training program was an opportunity for participating delegates and experts to exchange viewpoints and thus provide insights for policymakers in developing the strategy and legal framework for green financial markets in Vietnam.

The technical training was organized within the framework of the Vietnam Green Bond Readiness Program - a collaboration initiative between the GGGI, the Ministry of Finance, and the Luxembourg government.

The GGGI is a treaty-based international, intergovernmental organization dedicated to supporting and promoting strong, inclusive, and sustainable economic growth in developing countries and emerging economies. Headquartered in Seoul, the GGGI now has a network of 45 member countries worldwide.