Page 84 - Ebook HTKH 2024

rise. On July 22, 2022, the Government issued Decision No. 882/QD-TTg approving the
National Action Plan on green growth for the period 2021-2030, enclosed with a List of

tasks and activities to implement the National Action Plan on Green Growth for the
period 2021 - 2030, including Section 4 (Mobilizing financial resources and promoting
investment for green growth), including subsections related to the task of completing
policies and laws related to green finance such as: (1) Complete the legal framework for
green credit and green banking in accordance with regulations on the Law on
Environmental Protection 2020; (2) Complete the legal framework for green bonds
(government bonds, local bonds and corporate bonds), green insurance (including
building a portfolio of green insurance products to insure environmental pollution

liability for industries with high environmental risks, climate risk insurance products);
(3) Develop the carbon market in Vietnam (including building and establishing a carbon
credit trading floor according to market mechanisms; researching financial management
mechanisms for carbon market activities; building mechanisms and ways to operate the
carbon market, regulations connecting the domestic carbon credit exchange with
regional and world carbon markets). It can be seen that Vietnam's legal framework for

green finance is still incomplete in terms of aspects and tasks set out in the Plan including
green credit, green bonds, green insurance; is one of the main reasons why the green
financial system has not really developed in Vietnam, specifically as follows:
Green credit, based on Clause 1, Article 149 of the Law on Environmental
Protection 2020, green credit is credit granted to investment projects that effectively use
natural resources; respond to climate change; waste management; treat pollution,
improve environmental quality; restore natural ecosystems; conserve nature and

biodiversity; and create other environmental benefits. This law also stipulates that
lending activities of credit institutions and foreign bank branches in Vietnam for
investment projects must be in accordance with regulations on environmental risk
management in lending activities. Accordingly, the State Bank issued Circular No.
17/2022/TT-NHNN dated December 23, 2022 Guidance on implementing
environmental risk management in credit granting activities of credit institutions,

foreign bank branches (effective from June 1, 2023). The Circular has created a common
legal framework, requiring credit institutions to manage environmental risks in credit
granting activities. Promoting environmental risk management when appraising and
granting credit will also help economic sectors in society gradually have a more accurate
and complete awareness of climate change, factors affecting environmental protection
to move towards “green” production and “green” consumption thinking. If each
individual in society is conscious, each business investing in projects will also somewhat
change their goals and actions towards sustainable development.

The legal framework for sustainable development of the banking system in
Vietnam is also gradually being built and increasingly improved, creating motivation
for the entire banking industry to implement sustainable development. Previously, to

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