Page 112 - Ebook HTKH 2024

-0.011, and -0.003, respectively, which means that when other factors remain constant,
a 1% increase in CO2 emissions will cause Gross NPL, group-2 and group-5 loans to

decrease by 0,019; 0,011; 0,003 units, respectively. However, it is essential to note that
we have to find convincing empirical evidence for the remaining variables, such as
NPLs, group-2, and group-5 loans. This highlights the need for further research in these
areas.
Therefore, CO2 emissions and NPLs are correlated; one of the ways to reduce CO2
emissions is to rely on increasing NPL. This result is consistent with research by
Bachegour & Qafas (2023) that increasing CO2 emissions can significantly reduce loans
in the medium and long term; this means that increasing CO2 emissions can reduce

NPLs in the long time through investment and development of energy conversion tools,
thereby increasing overdue loans and vice versa. As we can see, CO2 emissions have a
negative impact on gross NPL, group-2 and group-5 loans.
Therefore, CO2 emissions and NPLs are correlated. This result is consistent with
the research of Bachegour & Qafas (2023) that shows that increasing CO2 emissions
can significantly reduce loans in the medium and long term. This means that increasing

CO2 emissions can reduce NPLs for a long time by investing and developing energy
conversion tools, thereby increasing overdue loans and vice versa. As we have seen,
CO2 emissions have a negative impact on gross NPL, group-2 and group-5 loans.
5. Conclusion and policy implications
The urgent research findings, which underscore the immediate need for the
Vietnamese government to carefully consider the trade-off between reducing CO2 and
reducing NPL when formulating environmental policies, are important. The negative

influence of CO2 emissions on the non-performing loans of commercial banks in
Vietnam is a pressing issue that cannot be ignored.
Bank administrators need to pay attention to and manage strict and systematic
policies to ensure credit quality, ensuring that the credit process is carried out according
to the correct process and that the collateral is correct. Periodically regulate and classify
debts to detect overdue debts and NPLs promptly. In particular, the appraisal stage must

be strictly managed to reduce the risk of NPLs at the bank to the lowest level. Besides,
Banks should establish an internal credit rating system; the bank will soon detect the risk
of credit risks, and appropriate solutions will be proposed.
Policymakers bear the responsibility of controlling inflation to stabilize the
country's economy. They must ensure that inflation is kept at a safe level and maintain
macroeconomic stability policies to foster continued economic development. This, in
turn, creates a conducive environment for banks, customers, and businesses to operate
effectively. The board of directors, as a key player, also has a significant role to play in

issuing directives to commercial banks to ensure high efficiency in reducing overdue
loans.
If Vietnam focuses excessively on reducing CO2 emissions, it could act as a
constraint on business development due to the associated standards. Ensuring

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