Academic journal article Asian Social Science

Green Bank: International Experiences and Vietnam Perspectives

Academic journal article Asian Social Science

Green Bank: International Experiences and Vietnam Perspectives

Article excerpt

1. Introduction

After nearly 25 years since international integration, Vietnam's economic has been particularly recognized as one of the most successful developing countries in the world. However, Vietnam also has faced the danger of environment including biodiversity loss, deforestation, air pollution or GHG emission. Therefore, the achievements of economic are under threat in recent years due to climate change and at risk of being reversed if the worst scenario occurs. The Vietnamese government has responded by developing the Vietnam Green Growth Strategy (VGGS). (Prime Minister Decision No 1393/QD-TTG). Approved in September 2012, the VGGS aims at increasing the resource-efficiency of the economy, and increase sustainability while achieving development and economic objectives. Vietnamese government also built Vietnam Green Growth Action Plan (VGGAP) in 2014. In particular, green finance and green bank are one of the parts of green growth, but this concept is still not popular to the financial sector - banks today (SBI, July 2010).

It is generally accepted that the cost to make a green growth strategy is relatively high. According Vietnam Ministry of Planning and Investment report, the expected number is about 30 million US dollar as totally 35 variety activities. Therefore, it is not only relied on state budget, the participation of the private sectors as investor and recipients also are being directed to the success of strategy. Although the banking sector is considered friendly to environment and have not more impact to nature environment through their internal activities, the external activities on the environment has more impact through their customer activities. An example is the banks have been approved the financing projects such as steel, paper, cement chemicals, etc., which have many negative impact to environment. Therefore, the banking sector could play an intermediary role to control their projects to have better environmental effect. On the other hand, even though, banking system is not a polluting industry, the present scale of in-house banking activities have considerably increased the carbon footprint of banks including their massive use of energy, high paper waste or lack of green building. It is undeniable that banking operations should adopt modern technology and process that have more friendly to environment. Shortly, Green Banking will emphasize a main resource to implement those.

In many countries, the definition of Green Bank is still a new concept. According UN ESCAP, "Green Bank" implies the operations of banks, incentives for environmental activities and reduces carbon emissions, such as: encouraging customers to use green products, services; imposing environmental standards when approved loan or grant preferential credits for projects that reduce CO2, renewable energy... Other definition, Green Bank works like a traditional bank and provide superior service for investors and customers while implementing programs useful to the community and the environment. The green bank is not a pure business operation for corporate social responsibility (CSR), also not entirely pure business for profit; it is a new combination to ensure the harmonious and sustainable about the economy - environment - society. (SOGESID). Therefore, the concept will have different beneficial to both of the banks, industries and the economy, especially with an emerging market like Vietnam.

The main objective of this paper is to build a general knowledge of Green Bank and the benefit of those to separate part of economic. We also tried to overview variety international case studies including successful and unsuccessful about this concept, and suggest to Vietnam perspective.

The paper consists of four main components: (i) introduction; (ii) literature review (iii) successful experience in Green Bank some countries and suggestion for Vietnam, and finally; (iv) the conclusions.

2. Methodology

This paper reviews the literature on the previous researches on green banking and green bank model. …

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