Page 295 - Ebook HTKH 2024

The ASEAN Taxonomy Board has released the first version of the ASEAN
Sustainable Finance Taxonomy in November 2021, introducing a common regional

language for financing sustainable activities and provides a framework for discussions
among ASEAN countries, meeting both international goals and specific ASEAN needs.
The sustainable finance taxonomy helps financiers and investors understand the
sustainable impact of projects on economic activity. Tackling climate change through
the financial sector is a pragmatic move because the financial system is the only effective
window to a tightly regulated economy.
The sustainable finance taxonomy works by classifying sustainable and
unsustainable economic and investment activities to promote green growth in the

economy. The use of sustainable finance classification is still very new to the ASEAN
region. Although Southeast Asian governments have prioritized development over the
environment. ASEAN has recognized the importance of protecting the environment,
public health and climate through community understanding of the environmental issues
and the devastation of harsh climates are heightened.
The ASEAN Sustainable Finance Taxonomy helps guide long-term decisions for

member states to achieve climate goals in accordance with national environmental laws
and policies. The sustainable finance taxonomy helps structure an orderly and
systematic green transition for each ASEAN member state, and contributes to
accelerating the sustainable transition across the region. Therefore, the sustainable
finance taxonomy approach is one that takes into account different national
circumstances and allows ASEAN members many options to scale up to a level that is
consistent with the spirit of the Paris Agreement.

4. Lessons for Vietnam
Green financing development is also getting more attention in Vietnam.
Vietnam has issued $1.157 billion in green bonds between 2019 and 2023. These bonds
reused to fund projects that have positive environmental benefits. Despite the potential,
the market for green bonds in Vietnam is still underdeveloped, with Vietnamese banks
issuing only a small amount compared to their regional peers. With the policy of

proactively integrating into the international and regional economy, ASEAN’s
experiences are considered useful lessons for Vietnam in order to keep up with the trend
of greening the economy. In order to promote the development of green finance in
Vietnam, the following lessons are drawn:
Firstly, upgrading the traditional green finance support system and promoting
capital flows from the private sector. Vietnam’s Government should play a more
significant role by implementing appropriate environmental policies that are mandatory
for the financial sector. This will contribute to making the financial market more

sustainable. The government has to implement preferential policies on taxes, fees, and
financial loans to push businesses to invest in technological innovation towards green
technology and jobs to create advantages for them in the industrial competition in the
market. Moreover, the government should continue to research and implement policies
to encourage and help production and business sectors using new

287