Page 137 - Ebook HTKH 2024

promoting credit institutions to participate in implementing solutions for green credit
growth and green banking on the basis of business autonomy.

Implementation results show that green credit from the banking system still
accounts for the largest proportion in the overall green financial structure in Vietnam
today, in addition to the contribution, but only on a very limited scale, of other
components such as green bonds, green insurance, environmental protection funds and
the Vietnam Development Bank.
Over the past 7 years (2017-2023), the green credit balance of the banking system
had an average growth rate of more than 22%/year. By March 31, 2024, 47 credit
institutions had generated green credit balances with outstanding loans reaching

VND636,964 billion, an increase of 2.6% compared to the end of 2023, accounting for
about 4.5% of the total outstanding loans of the whole economy, focusing mainly on
renewable energy, clean energy (accounting for nearly 45%) and green agriculture
(nearly 30%). Many credit institutions have developed green credit packages and green
credit programs suitable to the characteristics of business activities and green
transformation.

Credit institutions have increased their assessment of environmental and social
risks in credit granting activities, especially after Circular No. 17/2022/TT-NHNN took
effect. To date, 100% of commercial banks have developed internal regulations and
conducted environmental and social risk assessments in credit granting activities. As of
March 31, 2024, outstanding credit balance assessed for environmental and social risks
reached about VND 2.9 million billion, accounting for more than 21% of total
outstanding loans of the economy, an increase of more than 2% compared to the end of

2023.
Along with that, credit institutions have continuously raised awareness, actively
promoted their activities in the direction of greening by proactively building a green
working environment, applying achievements of the 4th Industrial Revolution to
develop non-cash payments, digitizing and automating processes, actively participating
in activities to protect the environment, etc.

The above results show that the solutions implemented by the banking industry in
recent times have contributed to promoting the greening process of banking activities,
promptly meeting the demand for capital to implement green, environmentally friendly
projects. At the same time, they have raised awareness and enforced and enforced
regulations on environmental protection and social responsibility of enterprises using
resources from the banking system, thereby adjusting behavior towards practicing ESG
standards, greening production and business activities of enterprises, towards
sustainable development goals of the economy.

3.2. Some issues and recommendations
In addition to the achieved results, the implementation of green credit has also
shown certain difficulties and limitations, specifically:

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