Installing solar rooftop for a household in the central province of Binh Dinh's Quy Nhon city. Green bonds are meant to raising private sector finance for projects with environmental and social benefits, supporting the Sustainable Development Goals. (Photo: VNA)Hanoi (VNA) – Green, social, and sustainability bonds are considered effectivetools for Vietnam to raise capital from the private sector for projectswith environmental and social benefits, thus supporting the country’s realisationof Sustainable Development Goals (SDGs) and the Paris Agreement 2015.
The statement was made by Vu Chi Dung, director of the International CooperationDepartment of the State Securities Commission (SSC), at the launch of theHandbook 'How-to Issue Guide for Green Bonds, Social Bonds and SustainabilityBonds', held by the SSC early this week.
Moody's Investors Service, in its report in early 2021, expected that globalissuance of green, social and sustainability bonds – or sustainable bonds,collectively – will hit a record of 650 billion USD in 2021, a 32 percentincrease over the 491 billion USD issued in 2020.
It forecast 375 billion USD of green bonds, 150 billion USD of social bonds and125 billion USD of sustainability bonds in 2021.
In recent years, the growth of the labelled bond market, especially green bonds,has attracted a diverse and more mainstream investor base.
The institutional investorcommunity such as pension fund managers, asset managers andthose with large portfolios, including those with sustainability-relatedmandates, were increasingly seeking green and low-carbon investmentopportunities. Dung said.
Even amid a global pandemic, the demand for green, social and sustainabilitybonds continues to soar, he added.
The handbook, made incollaboration with the International Finance Corporation (IFC), the ClimateBonds Initiative (CBI) and the Swiss State Secretariat for Economic Affairs(SECO), provides corporate issuers, and other market players, guidance inapplying the global and ASEAN standards as well as national regulations ofgreen, social and sustainability bonds which can help mobilise resources forsocio-environmental friendly and sustainable projects.
At the handbook launching event, Pham Hong Son, SSC Vice Chairman, said that thishandbook will support the market players to understand the international andregional practices in issuing green, social and sustainability bonds, managingthe proceeds from those bonds as well as to following the related environmentaland social impact reporting.
“The SSC considers thedevelopment of such labelled bond products as a key factor contributing to thesustainable development of Vietnam’s capital market," he added.
The IFC has been pioneering in a number of green bond transactions in theregion and looking for opportunities in Vietnam’s promising green bond market,”said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Laos.
“We believe that green bonds will be an effective vehicle for mobilisinglong-term funding for sustainable infrastructure and renewable energy projects,which the traditional lending products might not be able to afford. This willhelp expand funding for Vietnam’s green and sustainable economic growth,” hesaid.
As a member of the ASEAN CapitalMarkets Forum (ACMF), the SSC has been active in promoting the ASEAN Green BondStandards (AGBS), ASEAN Social Bond Standards (ASBS), and ASEANSustainability Bond Standards (ASUS), based on the International Capital MarketAssociation (ICMA)’s Green Bond Principles, Social Bond Principles, andSustainability Bond Guidelines, to create a sustainable asset class in Vietnam./.
VNA
