Green financial tools crucial for developing green capital market

Vietnam’s National Green Growth Strategy for 2021-2030, with a vision towards 2050, aims to transition towards a green economy. This aligns with the global trend of transforming the economic models and developing green financial tools, where environmental factors are integrated into financial investment policies and decisions.

During a discussion about the development orientations of green financial instruments Vietnam – particularly from the perspective of the stock market development strategy to  2030, Deputy Director of the Market Development Department under the State Securities Commission, To Tran Hoa, stated that to specify the Party’s resolutions and the Government’s decisions, the Ministry of Finance submitted the Stock Market Development Strategy to 2030 to the Prime Minister for approval. The strategy was approved under Decision 1726/QĐ-TTg dated December 29, 2023.

On August 15, 2024, the Ministry of Finance issued Decision No 1934/QĐ-BTC, outlining the ministry’s Action Plan to realize the National Green Growth Strategy. Accordingly, the Stock Market Development Strategy to 2030 set targets to “develop green financial instruments".

“These tools will be important pillars in developing a green and sustainable capital market. They will contribute to promoting its role as a channel for mobilizing mid-and long-term capital, a necessary source of finance for projects related to renewable energy, green and clean technologies, and other environmental protection projects,” said Mr. Hoa.

“This will help reduce dependence on non-renewable energy sources and encourage the use of environmentally-friendly energy sources, ” Mr. Hoa said.

He also noted that as investors increasingly care about environmental and social factors, the development of green financial instruments can facilitate capital attraction from both domestic and international sources.

Recognizing the importance of green financial tools, under Decision 1726, the Prime Minister has tasked the Ministry of Finance and the State Securities Commission with implementing solutions to develop these tools. The key actions include: diversify the community base in the securities market; improve the transparency and quality of goods; diversify the domestic investor base; and promote international integration in the field of green capital markets.