Agribank's green finance initiative: Catalysing Vietnam's eco-friendly economic ascent

December 05, 2023 | 12:37
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At the forefront of Vietnam's green finance revolution, Agribank has reported a substantial green credit portfolio of approximately $510 million as of October 31. This revelation came from Phung Thi Binh, deputy general director of Agribank, during the Lighting the Path for Green Financing seminar held by VIR on December 4.
Agribank's green finance initiative: Catalysing Vietnam's eco-friendly economic ascent

The portfolio, serving nearly 42,000 customers, is a testament to Agribank's commitment to fostering sustainable economic practices, particularly in sectors like sustainable forestry and renewable energy.

"Agribank is strategically positioned to influence Vietnam's transition to a green economy. Our focus on managing environmental and social risks in our credit activities demonstrates our commitment to sustainable development," Binh stated.

The bank's involvement in several policies and national programmes aimed at poverty reduction and sustainable development underscores its role as a crucial player in Vietnam's green finance sector.

The bank's journey in green credit financing has been marked by significant growth.

Between 2018 and 2020, its green credit portfolio witnessed an exponential increase, ranging from 100 to 380 per cent annually. Despite the global economic challenges, it has managed to maintain a stable growth trajectory in its green credit offerings.

Agribank's initiatives extend beyond traditional banking services.

Collaborating with Vietnam's Ministry of Agriculture and Rural Development and Vietnam Television, the bank launched the Clean Agriculture programme on VTV1 and a corresponding credit initiative that has been pivotal in advancing the One Commune, One Product drive.

"In a challenging export environment, particularly in the seafood and timber sectors, Agribank has been at the forefront of green lending initiatives, committing around $126.6 million to these industries," Binh added.

This move aligns with the bank's strategy to support environmentally friendly and internationally compliant Vietnamese export products.

Looking ahead, Agribank aims to intensify its focus on environmental, social, and governance (ESG) strategies in its credit activities. The bank plans to comply with the State Bank of Vietnam's environmental risk management guidelines and focus on developing comprehensive ESG frameworks.

"Our establishment of a dedicated steering committee and working group for ESG implementation highlights our systematic and effective approach towards integrating ESG across Agribank's operations," Binh elaborated.

Agribank's strategic plans also include maintaining a significant proportion of its lending in agriculture and rural development, aligning with Vietnam's national goals.

The bank's proactive stance in collaborating with the Ministry of Agriculture and Rural Development to implement eco-friendly agricultural practices further illustrates its commitment to sustainable growth.

However, Binh emphasised the need for a collaborative approach to achieve sustainable growth.

"The development of green credit in Vietnam requires concerted efforts from all levels of government. It's akin to a symphony, where every section needs to play in harmony to create a successful outcome," she noted.

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By Nhat Minh

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