HÀ NỘI — Sustainable finance is emerging as an increasingly important source of capital for businesses as they accelerate their green transition, according to HSBC Vietnam.

Data from the State Bank of Vietnam show outstanding green credit reached VNĐ828 trillion (US$31.6 billion) by the end of the first quarter, nearly 4.6 times higher than in 2017 when green lending initiatives were first introduced. However, green loans still account for only 4.3 per cent of total outstanding credit, highlighting significant room for further growth.

According to Thùy Hoàng, senior relationship manager for Corporate and Institutional Banking at HSBC Vietnam, demand for green finance will continue to rise as businesses face mounting pressure to reduce emissions, strengthen supply chain transparency and improve resilience against climate-related risks.

Climate change is already affecting business operations through more frequent extreme weather events, prolonged heatwaves, droughts and saltwater intrusion, while investors, trading partners and consumers increasingly expect companies to adopt sustainable business practices.

For export-oriented firms in particular, environmental standards are becoming an essential requirement for maintaining market access and competitiveness.

HSBC said businesses should view sustainable finance as more than funding for large-scale environmental projects. A broader range of financial products is now available to support both long-term investment and day-to-day operations.

Green loans remain suitable for projects with clearly defined environmental benefits, such as installing rooftop solar systems, upgrading wastewater treatment facilities or replacing machinery with energy-efficient equipment.

Sustainability-linked loans provide greater flexibility by allowing companies to use funds for broader business purposes while linking borrowing costs to the achievement of measurable environmental targets, such as reducing energy intensity or increasing the use of certified sustainable materials.

Companies with sufficiently robust sustainability reporting may also consider issuing green bonds to diversify medium- and long-term funding sources.

HSBC also highlighted the growing role of trade finance in supporting business transition. Products such as letters of credit, supply chain finance and receivables finance can help companies manage working capital while encouraging stronger sustainability standards throughout supply chains.

To improve access to green financing, businesses should begin with practical initiatives that generate both environmental and financial benefits, such as reducing electricity and fuel consumption, minimising material waste or improving logistics efficiency.

These initiatives should be supported by a clear transition plan with measurable targets, alongside reliable operational data covering areas such as energy use, water consumption, waste generation and production output.

According to HSBC, credible and consistent data have become increasingly important for banks and investors assessing both financial and environmental risks.

While surveys show that 82 per cent of Vietnamese businesses have started collecting environmental, social and governance (ESG) data, only about one-third obtain independent assurance for their ESG reporting. Expanding third-party verification would strengthen investor confidence, reduce greenwashing risks and improve access to sustainable finance.

The bank also emphasised the importance of strong internal governance, including clear responsibility for sustainability targets and transparent reporting processes, to improve the credibility of financing proposals.

At the policy level, HSBC said continued government support will be essential to accelerate the development of Việt Nam's sustainable finance market.

This includes establishing clearer green taxonomies, strengthening disclosure requirements, expanding independent verification capacity and developing national certification standards aligned with international practices.

With stronger regulatory frameworks and greater collaboration between businesses, financial institutions and policymakers, sustainable finance can become a key driver of Việt Nam's transition towards a greener and more competitive economy. — VNS