IFC, Vietnam securities regulator partner to boost green finance

The World Bank’s investment arm IFC, in partnership with the Swiss State Secretariat for Economic Affairs (SECO), is scaling up its support to Vietnam’s government to promote sustainable finance and spur private sector investment.

A memorandum of understanding signed by IFC and Vietnam’s State Securities Commission, or SSC, in Hanoi Friday will support government efforts to leverage the capital market to tackle climate change through green and sustainable finance.

With IFC's assistance, SSC will promote the adoption of environmental, social and governance (ESG) standards and practices, and enforce ESG requirements among market players.

This will help strengthen the sustainable finance framework, encouraging innovative financial products such as green bonds, transition bonds, and sustainability-linked bonds to attract international investors, who are looking for sustainable assets.

"Capital markets have a big role to play in Vietnam's transition to a climate-resilient and low-carbon economy, helping mobilize green capital," said Nguyen Duc Chi, Deputy Minister of Finance.

Pham Hong Son, Vice Chairman of SSC, said: "Promoting green and sustainable finance is a long-term priority for the State Securities Commission. IFC's continued efforts to encourage the adoption of ESG standards and practices among public companies will help scale up green finance, creating a sustainable capital market in Vietnam.”

These efforts are part of a new initiative between IFC and Switzerland’s SECO - the Integrated ESG Program - to help regulators, investors, companies and partners in Vietnam manage ESG risks and bottlenecks by promoting effective decision-making, and environmental and social risk management, said IFC, the largest global development institution focused on the private sector in developing countries.

"Strengthening ESG capacity is critical to achieving the climate commitments and the Sustainable Development Goals," said Werner Gruber, head of the Swiss Cooperation Office in Vietnam.

He added, "Our work with IFC aims to improve ESG standards and practices in Vietnam to guide financial flows towards sustainable investments, for more inclusive and sustainable economic development."

Kim-See Lim, IFC Regional Director for East Asia and Pacific, stressed that greening the capital markets with a focus on improved ESG standards was a priority, as Vietnam aims to unlock private investment to achieve its twin goals of becoming a high-income and carbon-neutral economy by 2050.

She also said helping spur a conducive environment for private sector climate investment was vital for supporting sustainable and resilient growth in Vietnam.