Green Bank: International Experiences and Vietnam Perspectives

Abstract

Green Bank is a new concept that has been known in recent years, particularly for developing countries including Vietnam, because the requirements of environmental protection are trade-offs to achieve economic growth and development. Hence, it is generally accepted that the green bank is a model for banking in the future when it balances the benefits and cost between economic and environment of all stakeholders in the banking activities. This paper is an overview the new concept about green bank and the benefits of those to environment and economic. Then, it shows the international experiences from developed and developing countries. The lessons learnt withdraw will be useful for implementing in Vietnam, including: (i) enhancing the awareness of green banking of bank leaders, (ii) encouraging firms to make green investment to create green financing demand, (iii) developing the legal framework to encourage banks providing green finance.

Opportunities of green lending to finance environmental projects to achieve the principles of sustainable development

“…Almost half of the banking institutions in developing economies offer their customers green loans. The latter are the most common green financial products, followed by green insurance, advisory services, and green investment funds (Tu & Yen, 2015). Although more than half of such banks do not provide green financial services (Linh & Anh, 2017), most of them are interested in the development of banking customer service (Park & Kim, 2020).…”

A Systematic and Critical Review on the Research Landscape of Finance in Vietnam from 2008 to 2020

“…Many nations have started to focus on the model of a green bank. According to Tran and Tran (2015), in definitive terms, a green bank is a banking model prioritizing environmental protection and sustainable development. Through its operations, the banking sector will serve as a link between economic growth and environmental protection.…”

“…With the initial objective to protect the environment by reducing the paper used in paperwork or applying new sources of clean energy, the banking sector in countries such as the United States, the United Kingdom, or India has expanded the green bank model to other activities of the economics, such as funding green projects, providing green products, encouraging green communications, etc. (Tran and Tran 2015). However, except for the success of the United States, the green bank model in other countries is yet able to generate significant impacts on the environment, or its impact is still under expectations, such as in the case of China (Bai et al 2013).…”

“…In Vietnam, the application of a green bank is a relatively new topic, and the number of research papers regarding this topic is very low. Applying green bank in a developing country such as Vietnam will yield various benefits, including avoiding paperwork, creating awareness to business people about the environment, or establishing loans at a lesser rate; thus, it is high time more aspects of green finance and green bank were needed to be elaborated and examined (Tran and Tran 2015). Researchers can delve into the expected cost and requirements for green bank application, and the obstacles for companies in taking advantage of the green finance movement, as well as policy suggestions for the government to better facilitate firms in green business (Vuong 2018(Vuong , 2021.…”

Green Finance for Sustainable Development in Pakistan

“…The State Bank of Vietnam formulated an action plan in 2015 for green banking and set different priority areas for its promotion. 47 To comply with this, banks are exploring the possibilities of green finance at different levels, however, the State Bank is concerned with undertaking ESG measures so that banks may have the ability to evaluate borrowers under new procedures. Using the large-scale survey from 32 banks and 329 respondents and applying exploratory factor analysis and regressions during 2016, researchers 48 found that an understanding of green banking, current activities of green banking, and the priority sectors have positively influenced the willingness of Vietnamese banks to follow banking practices; however, the obstacles have been inversely associated with the propensity to employ green banking services.…”