Green Financing: From Strategy to Execution

01 December 2022 - 11:27 AM Alternate Text

 

This is the short presentation shared by FiinRatings’ CEO, Mr. Nguyen Quang Thuan as a panelist at the Green Financing Conference on 28 November 2022 in the context of the Green Economy Forum & Exhibition 2022 organized by EuroCham Vietnam in HCMC. 

The panelists consist of representatives from The World Bank, Dragon Capital, State Securities Commission, and Hochiminh Stock Exchange to discuss financing sources from Vietnam capital markets, including government bonds, corporate bonds, banking credit, and equity. Speakers also addressed potential new funding for Vietnam’s economic development, including pension reforms, international FC funding if Vietnam Stock Market upgraded to an Emerging Market, and growth in managed capital by investment funds and insurance companies. 

 Key messages from the FiinRatings’ representative: 

  • In addition to current funding sources, green capital from green bonds and green credits by international investors and domestic capital markets will become a significant funding source for corporate growth. Vietnam has issued several policies in alignment with the nation’s commitment to net-zero carbon by 2050 at COP26. Most importantly, the Vietnamese Taxonomy is in drafting and expected to be issued soon. This will be a significant legal framework for enterprises to consider green bond issuance and apply for green credits from financial institutions. 

  • Sharing the experience from a Green Bond Approved Verifier under Climate Bonds Initiative’s standards, FiinRatings’ representative suggested corporate leaders should be well prepared to take up this opportunity to diversify the funding sources and benefits from going green, aka “greenium.”  

  • FiinRatings’ CEO also introduced a 5-step in issuing a green bond and emphasized that Vietnamese companies should start developing a green bond framework and aligning it with ESG strategy well before actual green bond issuances. The Green Bond Framework is an important corporate document to demonstrate the commitment by Companies to going green by stating their green finance objectives, policies for the use of proceeds, selection of eligible projects and assets, and especially the management of proceeds and green reporting.  

  • As a leading domestic credit rating agency in Vietnam, FiinRatings’ CEO also shared how credit ratings would enhance green bond issuance and financing strategy for Vietnamese issuers. International investors have recently expanded their investment from highly rated bonds (AAA) to lower investment grade ones (BBB) as they shifted their risk appetite to invest in green assets. This is likely to be the trend in Vietnam as well. 

  • FiinRatings’ representative also shared practical guidance for participants on selecting the right debt instrument, including green bonds, social bonds, sustainability bonds, and sustainability-linked bonds to help Vietnamese corporates better prepare for the transition. 

The presentation deck by FiinRatings’ CEO can be found HERE.

The presentation slides by the World Bank’s representative can be found HERE.

About FiinRatings

FiinRatings, a brand and part of FiinGroup Vietnam, is licensed by the Ministry of Finance to operate as a Credit Rating Agency (“CRA”) for Vietnam on 20 March 2020. With continuous effort to improve expertise and credit rating methodologies, on 24 May 2021, FiinRatings received Technical Assistance from S&P Global Ratings and ADB. On March 10th, 2022, FiinGroup has been officially approved by the Climate Bonds Initiative (CBI) as the first authorized company in Vietnam to verify green bonds issued by Vietnamese businesses when participating in CBI's program.

FiinRatings maintains a strict, independent policy to meet current regulations in providing credit rating services in Vietnam as well as to comply with our conflicts-of-interest policy and to ensure the objectivity and independence in giving opinion on our credit ratings. Visit us for more information.

For more information, visit HERE.

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