A chance for Vietnam in anti-climate change efforts

The trend towards green transformation and sustainable development is gradually becoming a central focus in many countries, but the current backdrop of political instability and global economic fluctuations has placed significant pressure on major climate finance initiatives, forcing these organizations into a phase of “restructuring” to adapt to the new reality.

One notable example is the Net Zero Asset Managers (NZAM) initiative - a network of investment managers controlling trillions of dollars in assets who have pledged to support the goal of net-zero emissions.

Launched at the end of 2020, the NZAM initiative aimed to create a global network of investment managers committed to the international net-zero emissions target. At its inception, around 30 professional organizations participated, managing nearly $9 trillion in assets; a figure reflecting strong market confidence in the future of green investment. Just five years later, by early 2025, the network had expanded to over 325 members with total assets exceeding $57 trillion. Yet behind this growth lie major challenges arising from political and global economic volatility.

Adapting green finance

In early 2025, the NZAM initiative was forced to pause operations after several major financial institutions, including BlackRock - the world’s largest asset manager - announced its withdrawal due to legal and political pressure in the US. The “anti-ESG” (environmental, social, and governance) movement, led by conservative politicians, framed participation in climate initiatives as “political interference in investment”. Facing this pressure, NZAM had to review its entire operational framework, from commitment structures to reporting methods, to ensure compliance with varying legal contexts across regions.

After this pause, NZAM was relaunched with a “more pragmatic and flexible” approach. Rather than binding all signatories to a single target of achieving net-zero emissions by 2050, the initiative now allows members to set their own goals based on market conditions, legal frameworks, and the internal capacity of each investment organization.

This strategic adjustment enables NZAM to expand its influence and avoid political conflicts while maintaining its core philosophy: treating climate risks and opportunities as central to investment governance. Today, NZAM is entering a phase of “adapting for sustainable growth”, reflecting the spirit of the new era.

Notably, some critics argue that NZAM’s relaxation of the 2050 net-zero target across countries and territories represents a step backwards for the global green investment movement. In reality, this is a necessary strategic adjustment, signaling greater maturity for the global sustainable investment movement.

In its early phase, climate initiatives were often built on strong political commitments, setting ambitious goals to inspire action. However, when implemented, differences in legal frameworks, market capacities, and economic-political pressures across regions made “hard commitments” difficult to sustain.

NZAM’s shift towards flexibility is a way to maintain inclusivity and adaptability. Instead of forcing all participants to move at the same pace, the initiative allows organizations to follow different paths towards a shared destination. This is especially crucial as the US experiences a strong wave of anti-ESG sentiment, while Europe, Canada, Japan, and Australia continue to enforce rigorous climate policies.

In practice, this “relaxation” should not be seen as a retreat but as a shift from “political commitment” to “practical commitment”. Flexibility allows initiatives like NZAM to survive and grow rather than collapse due to political divisions or market absorption limits. It demonstrates that green investment is evolving from a movement into a professionalized stage, where investors focus on effectiveness, grounded in real data and tangible impact rather than slogans. In the long term, this approach will strengthen market confidence in sustainable investment, as it relies on voluntary, transparent, and adaptive principles rather than imposed mandates.

Impact on Vietnam

For developing countries, including Vietnam, the global restructuring of net-zero strategies could be a “positive” opportunity if leveraged wisely or “negative” if development strategies become inconsistent or unstable. As major financial institutions adjust portfolios to mitigate political and legal risks in the US and Europe, they tend to seek emerging markets with stable policies, clear green development orientations, and long-term growth potential.

Vietnam, with its commitment to achieving net-zero emissions by 2050 affirmed by the Prime Minister at COP26 in late 2021, has emerged as a potential destination for global green finance. The Party and government’s strategic planning, through the four-pillar resolutions, consistently signals Vietnam’s long-term green transition path to the international community.

The restructuring of global net-zero strategies does not imply a reduction in green capital. On the contrary, it opens opportunities for more flexible and practical allocation. When initiatives like NZAM allow investors to set emission targets according to each country’s conditions, localized projects, such as renewable energy, green transportation, low-carbon manufacturing, and circular agriculture, can be implemented.

These sectors align with Vietnam’s priorities, where green transition is a pillar of the new growth model, further detailed in the four-pillar resolutions. In addition, the legal framework of Vietnam’s carbon market is being rapidly strengthened, as reflected in government Decree No. 119/2025/ND-CP amending Decree No. 06/2022/ND-CP on greenhouse gas mitigation and ozone layer protection.

This is a critical step, laying the foundation for a domestic carbon market pilot program through 2028 before full operations begin in 2029. The roadmap demonstrates that Vietnam is moving from commitment to implementation, with a structured approach integrated with the international financial system.

An effective carbon market would provide transparent emissions pricing, facilitating access by Vietnamese businesses to international capital and green finance mechanisms such as climate credit, carbon bonds, or cooperation under Article 6 of the Paris Agreement.

To fully seize this opportunity, Vietnam must ensure two key factors: policy stability and transparency in carbon credit data. Global investors increasingly demand robust greenhouse gas reporting, climate risk assessment, and a social impact evaluation on projects.

By quickly completing the institutional framework, enhancing capacity in greenhouse gas inventories, standardizing national carbon data, and building a credible team of carbon credit evaluators recognized internationally, Vietnam could become a regional hub for green finance and carbon markets in Southeast Asia over the next decade; a model of a developing country turning global challenges into sustainable growth opportunities.

Golden opportunity

Amid the global “net-zero strategy adjustments” and the rise of the anti-ESG movement in the US, Vietnam’s most important task is to remain steadfast in its commitment to achieving net-zero emissions by 2050, treating it as the guiding principle for all national development policies. Beyond reinforcing international credibility, this commitment also creates long-term competitive advantages.

Development should be built on three parallel pillars: digital transformation - to accelerate efficiency and productivity; green transition - to ensure sustainable development; and innovation - to enhance long-term competitiveness.

In reality, Vietnam is standing before a golden opportunity. As many major economies are influenced by domestic political factors, global green capital is likely to flow towards countries with stable policies and clear commitments. By advancing institutional reforms, ensuring transparency in emission data, and efficiently operating the carbon market, Vietnam could become a regional “hub” for green finance.

More importantly, achieving the net-zero target is not only an international responsibility but also a domestic development strategy. It is a pathway for Vietnam to improve growth quality, reduce its dependence on fossil fuels, create green jobs, and elevate its position in global supply chains. Remaining steadfast, taking practical action, and seizing the transformation opportunity is how Vietnam can uphold its commitments while accelerating sustainable development.

(*) Dr. Nguyen Phuong Nam is an International Reviewer for Climate Change Reports at the United Nations Framework Convention on Climate Change (UNFCCC) and a Member of the United Nations’ Initiative for Climate Action Transparency (ICAT) Advisory Committee.