The important role of green transformation

According to Dr. Le Viet Anh - Director of the Department for Science, Education, Natural Resources and Environment under the Ministry of Planning and Investment, to move towards the goal of green growth, Vietnam is currently implementing many important strategies, such as the National Strategy on Green Growth for the 2021-2030 period, with vision until 2050; the National Strategy on Climate Change to 2050.

Enterprises have encountered financial barriers in the green transformation process

The issue of transition to a green economy has been actively integrated into national strategies, planning, plans, programs, and projects, or into sectors and localities, and has initially achieved certain results. For example, regarding applications of science and technology and restructuring sectors consuming resources and energy, the proportion of renewable energy in the national power system is higher than many countries in the world...

Not only a target at the national level, according to Do Le Thu Ngoc - Head of Inclusive Development, United Nations Development Program (UNDP) in Vietnam, green growth and sustainable development are important, especially when the Carbon Border Adjustment Mechanism (CBAM), the EU Deforestation Prevention Regulation (EUDR)... are putting great pressure on the business community to meet the requirements of development reports and environmental and social impacts. If businesses do not develop sustainably, they will not be able to participate in the global value chain.

However, according to the World Bank’s estimates, to achieve green growth and sustainable development goals, Vietnam will need about US$370 billion between now and 2040 to respond to climate change and achieve net zero emissions.

For the business community, the issue of green transformation becomes even more challenging because small and medium enterprises (SMEs) account for up to 98 percent of the total number of enterprises; therefore, it is difficult for small businesses to access bank loans because they don\'t have collateral.

“Resolving difficulties” for businesses in green transformation

According to Bui Thu Thuy - Deputy Director of the Agency for Enterprise Development under the Ministry of Planning and Investment, there are 3 “barriers” for SMEs in the green transformation process, including financial resources, human resources and solutions to green transformation.

Green transformation brings opportunities for enterprises and the economy

Accordingly, in terms of capital, Thuy said that currently, only about 3 to 5% of Vietnamese enterprises are large-scale enterprises with resources ready for green transformation. The remaining 95 to 97% are SMEs with an average capital of VND10 - 20 billion; therefore, seeking capital for green transformation is extremely difficult.

To solve the capital issue, Thuy said that the state needs to build clear mechanisms and policies on green criteria and green projects to facilitate bank disbursement, as many banks have shared that so far there’s been no criteria for green projects.

Regarding human resources, Bui Thu Thuy said that there are many SMEs in Vietnam that have been transformed from business households, so it is difficult to implement digital transform because of the lack of human resources in technology. In particular, to support businesses in green transformation, in recent years, the Ministry of Planning and Investment has adopted support policies for enterprises particularly to improve their capacity in response to dual transformation: green transformation and digital transformation. The ministry has also coordinated with many sponsors to implement initiatives, and help businesses identify their readiness for digital and green transformation, etc.

As for the banking sector, Pham Duc Hau - Deputy Director of the Corporate Customer Department at the Joint Stock Bank for Investment and Development of Vietnam (BIDV), said, BIDV commits to keep supporting and accompanying businesses, including SMEs in the green transformation process.