Green growth: An opportunity for Vietnam to become a pioneer country

	2023 Vietnam Business Forum focuses on green growth
	Businesses striving for green growth
	Promoting private enterprise towards sustainable growth

Consider "green" business as a strategy and competitive advantage

On March 19 in Hanoi, the Ministry of Planning and Investment, the World Bank, and the International Finance Corporation (IFC) – a member of the World Bank Group, held the annual Vietnam business forum, a high-level session with the theme: the business community accompanies the Vietnamese Government in promoting green growth.

Speaking at the forum, Minister of Planning and Investment Nguyen Chi Dung said the Party and State of Vietnam have paid great attention to and actively promoted the green economy, circular economy, and sustainable development. Vietnam has issued many policies orienting economic development towards sustainability, environmental protection, adaptation to climate change, improving the quality and efficiency of investment, especially foreign investment, and focusing on attracting green and higher-quality new projects.

For Vietnam, green growth is not only an inevitable choice but also an opportunity to become a pioneer in the region, catching up with the global development trend. This is considered the key to ensuring the successful implementation of the goals in the 10-year socio-economic development strategy for the 2021-2030 period. Simultaneously, creating opportunities for Vietnam to continue the momentum of innovation, accelerate the transformation of growth models in depth, and upholding quality, efficiency, and sustainability.

In that process, the business community is identified as a key factor, playing an important role. In recent years, the business community's awareness of its role in the national green growth strategy has been raised markedly, gradually changing behavior and taking many practical actions to contribute to the implementation of the national green growth strategy.

In fact, many units have been taking "green" business as a strategy and competitive advantage; from using clean energy, environmentally friendly materials, supporting socially responsible activities, to seriously investing in modern, high-tech, environmentally friendly production lines that use fewer resources, energy, and reduce waste and emissions.

Enterprises should be encouraged to apply sustainable business models, cleaner production technologies, and efficient use of resources. Photo: Bui Nu

Investing is just getting started

However, the challenge for the Vietnamese business community is not small, because according to Deputy Secretary General of the Vietnam Confederation of Commerce and Industry (VCCI) Dau Anh Tuan, the level of understanding and environmental regulations of Vietnamese enterprises is only at the initial stage.

A VCCI's enterprise survey showed that although environmental pollution seriously affected production and business activities, the understanding of enterprises about environmental regulations has been low. Only 31.8% of domestic private enterprises said they understood environmental regulations well. Additionally, up to 68% of businesses reported being negatively affected by climate change.

Survey data of VCCI showed that 44% of domestic enterprises and 38% of FDI enterprises admitted that they had not fully complied with environmental regulations. The level of participation in local environmental protection programs of enterprises has been still limited (37%). Notably, although up to 91% of businesses believed that environmental protection was the responsibility of the local government, the percentage of businesses that thought they also needed to be responsible had been lower.

In addition, the level of business investment for innovation, new green practices is at the starting level. According to the UNDP's 2021 report, even in energy-intensive sectors such as manufacturing, transportation, and construction, only about a quarter of businesses applied energy and resource-saving solutions.

To realize the development orientations and effectively implement the tasks and solutions that the Government has set out towards the green economy and sustainable development, VCCI and the business community recommended that it is necessary to strengthen the participation of the business community in building and perfecting the legal system, enforcing laws, and regulations on the environment, green economy, and sustainable development.

To monitor and evaluate the implementation of policies on green economy and sustainable development at the local level, VCCI is developing and will publish the Provincial Green Index (PGI) in 2023.

For businesses, this is an independent set of indicators to assess the green business environment at the provincial level, the level of compliance with environmental laws, the current status of applying environmentally friendly technology by local businesses, the level of management and environmental behavior of businesses, the level of concern, policies to encourage green investment activities of the local government, and many important issues related to the environment. The development and publication of the green index also aims to provide information for central and local State agencies in policy making on investment and environment, in state administration and management; and promote the process of green transformation of localities. The PGI using a bottom-up approach has achieved great success through the PCI (Provincial Competitiveness Index).

Notably, according to the Ministry of Planning and Investment and the World Bank, Vietnam is expected to need about US$30 billion to implement the Green Growth Strategy to 2030, in which the State budget can only meet up to 30% of resources and mainly focuses on investment in transport infrastructure and many other priority targets. International experience showed that public investment was not the main source of capital in green growth, but private investment played a decisive role. Therefore, State agencies need to develop mechanisms to further promote green credit programs from domestic and foreign financial institutions, giving priority to projects with green growth models, creating favorable conditions for green financial instruments such as carbon credits, green bonds, and carbon trading market.