The green economy is a global trend, and Vietnam is actively participating. In recent years, the government has been striving to develop and apply environmental criteria and green taxonomy according to international standards to promote sustainable development and environmental protection. Applying international standards in evaluating and classifying green projects will bring significant benefits to the country, from economic to environmental and social aspects.
What is green taxonomy?
Green taxonomy, according to the International Capital Market Association (ICMA), is a system that identifies activities, assets, or projects that meet criteria related to climate, environment, social issues, or sustainable objectives. This system can apply various approaches, including quantitative criteria (such as performance thresholds) or qualitative criteria. Some green classifications describe projects and activities based on sustainable development criteria. The goal of the green classification system is to identify economic activities and investments that help achieve environmental protection goals, such as achieving net zero emissions by 2050.
In Vietnam, the concepts of “green taxonomy” and “green projects” have been widely used for many years across investment, finance, banking, agriculture, energy, transportation, and construction sectors to implement green growth strategies. However, the criteria for green classifications are still not fully developed, and the government is making efforts to establish them through various documents.
Government efforts in establishing green classification criteria
According to estimates by the World Bank, Vietnam needs about USD 368 billion for the 2022-2040 period to achieve net zero emissions by 2050. From 2017 to 2020, ministries, sectors, and relevant parties have made efforts to build green project lists.
The Vietnamese government has issued many policies and guidelines on green criteria. Circular No. 9050/NHNN-TD dated November 3, 2017, from the State Bank of Vietnam guides the assessment of green projects in 12 sectors such as green agriculture, forestry, and renewable energy. Decision No. 1085/QD-BKHĐT dated July 16, 2018, from the Ministry of Planning and Investment guides the classification of public investment for climate change and green growth, supporting the issuance of green bonds.
The socio-economic development strategy for 2021-2030 emphasizes the integration of economy and environmental protection. The Environmental Protection Law 2020 and Decree No. 06/2022/NĐ-CP and No. 08/2022/NĐ-CP enhance policies on green credit and green bonds, creating legal frameworks for green projects. The focus on building legal frameworks for green projects has had positive effects, contributing to enhancing the responsibility and role of organizations, individuals, sectors, and fields in activities towards a sustainable green economy.
Benefits of building green taxonomy
The establishment of a green taxonomy brings significant benefits, especially attracting green capital from international investors. This helps promote the development of sustainable technology and economy for businesses.
Mobilizing capital and investment
Completing the green criteria helps Vietnam create transparency and trust among the international community, attracting green financial flows and funding from international investors and organizations. Applying international standards in classifying projects not only promotes economic and technological development domestically but also supports technology innovation and enhances global competitiveness. This minimizes negative environmental impacts and promotes the development of green industries.
Promoting a green economy
Building a green classification system based on international standards and domestic laws will enhance the role of the state in creating conditions for potential markets and mobilizing resources for environmental protection and promoting businesses’ transition to a green economy.
Conclusion
The Vietnamese government is making continuous efforts to develop and refine green taxonomy. These efforts aim to protect the environment and promote a low-carbon economy. This system will play a crucial role in promoting environmentally friendly investment projects and sustainable development.
Source: Compilation
