Vietnam's sustainable bond market is underdeveloped but shows promise for future growth, driven by increasing corporate engagement and government support for environmental initiatives.

Target Information

Vietnam's sustainable bond market is increasingly recognized as a critical instrument for driving financial mobilization towards environmentally and socially responsible initiatives. As the country faces significant environmental challenges—ranking sixth globally in vulnerability to climate change—there is an urgent need for financial resources to support the implementation of its Nationally Determined Contributions (NDCs) under the Paris Agreement. The German Agency for International Cooperation (GIZ) projects that Vietnam will require approximately 21.2 billion USD by 2030 to fund sustainability projects, emphasizing the pressing need to scale green finance efforts. However, as of 2022, Vietnam's sustainable bond market has only seen limited progress, issuing a mere 0.8 billion USD in sustainable bonds from 2021 to 2023, which places it far behind its regional counterparts.

Industry Overview

The sustainable finance landscape in Vietnam remains underdeveloped compared to other countries in the ASEAN region. While nations like Singapore and the Philippines have made significant advancements in their green bond markets—propelled by strong government policies and increased private sector participation—Vietnam's market growth continues to be sluggish. This stagnation can be attributed to various factors, including a traditional bank-centric financial system, an absence of a standardized green taxonomy, and inadequate regulatory frameworks. Consequently, these barriers hinder corporate issuers from tapping into sustainable financing opportunities.

Additionally, high issuance costs, limited technical expertise, and low public awareness further complicate the landscape for sustainable bonds in Vietnam. Recent years have seen the Vietnamese government's initiatives to promote green financin