Forum discusses impact of climate change

September 22, 2023 | 09:00
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The 2023 Vietnam Climate Forum took place in Hanoi on September 21. The event was co-organised by the State Bank of Vietnam (SBV) in partnership with the International Finance Corporation (IFC).
Forum discusses impact of climate change

At the forum, held also thanks to the Swiss State Secretariat for Economic Affairs and the Australian Department of Foreign Affairs and Trade, speakers emphasised the substantial challenges faced by the climate finance sector in Vietnam in aligning significant investment opportunities with environmental objectives.

This sentiment was shared by Allen Forlemu, the IFC's regional industry director for Financial Institutions Group, Asia-Pacific, when he said, “It is evident that climate change is an increasingly disruptive factor for Vietnam's economy, and the costs are already starting to undermine growth. In 2020, Vietnam lost $10 billion, or 3.2 per cent of its GDP, to climate change impacts.”

“If nothing is done, costs will only rise. In a business-as-usual scenario with limited global mitigation efforts, climate change could cost Vietnam up to 14.5 per cent of GDP annually in roughly 30 years, with the potential to push a million people into extreme poverty in less than a decade,” he added.

Addressing climate change is a strategic cornerstone for the World Bank Group, and Forlemu emphasised the IFC’s collaboration with financial institutions and development partners worldwide to provide millions of individuals and businesses with opportunities to access critical financial services.

Forum discusses impact of climate change
Pham Thanh Ha, Deputy Governor of the State Bank of Vietnam

Pham Thanh Ha, Deputy Governor of the SBV, also stressed the urgent need to meet environmental commitments. The banking sector has been actively aligned with the goals set by the government in the National Green Growth Strategy for the 2021-2030 period, with a vision towards 2050.

“All businesses must view this as an opportunity but also an imperative. The banking sector recognises this as a critical area that needs to be pursued,” he said.

Specific achievements worth noting include the approval of the Green Banking Development Project in Vietnam, the establishment of the Environmental, Social, and Governance (ESG) Steering Committee, and the creation of the Sustainable Finance Project Management regulations.

Ha expressed hope that foreign credit institutions and foreign bank branches would gain a better understanding of Vietnam's legal environment as the country moves towards net-zero emissions and the financial sector transitions towards green finance. This understanding will enable them to leverage investment opportunities in climate-related projects through the domestic capital markets.

In the same vein, Pham Thi Thanh Tung, deputy director general of the the SBV’s Department of Credit for Economic Sectors, said, “The SBV has implemented various solutions to encourage credit institutions to contribute positively to the national green growth strategy, and the banking industry is committed to fulfilling the government's objectives.”

Phan Thanh Hai, deputy CEO of BIDV, revealed that the bank has established an ESG Steering Committee and a Sustainable Finance Project Management team as part of its institutional development. BIDV's business strategy for the period up to 2025 and vision until 2030 includes a focus on green credit development, green banking, and activities that promote the growth of green credit and risk management, environmental protection, and social responsibility.

“BIDV has invested in modern IT to minimise paper and plastic use and promote digital transformation internally. Furthermore, we are actively involved in community activities that raise environmental awareness and support disadvantaged communities,” he said.

The bank is also focusing on projects related to climate adaptation, energy transition, and clean transportation, prioritising green projects that have access to preferential funding from financial institutions. As an intermediary bank receiving international funding from sponsors, BIDV introduces domestic clients to these funds, manages disbursements and collateral assets, and ensures compliance.

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By Linh Dan

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