Within the framework of the Global Climate Action Summit at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) in Dubai, attended by Prime Minister Pham Minh Chinh, the PAN Group and Standard Chartered Bank Vietnam recently announced the signing of an MoU to cooperate on the implementation of environmental, social, governance (ESG) financial solutions and services. The partnership is a key part of PAN’s strategic approach to green finance and partners, which aims to secure funding for forthcoming development investment initiatives.

Over a decade of investment in agriculture and food, the PAN Group has not only invested in projects systematically and with a “speak the truth, do the truth” approach but also remains dynamic in seeking solutions and resources for sustainable development, bringing harmonious benefits to the environment and society.

This has been and is being materialized by the Group through projects featuring many green elements. Examples of these include expanding the area and production capacity for organic cashew nuts using new energy-saving technology, reducing the need for chemicals, and creating jobs for ethnic minorities involved in the value chain of production, upgrading the pangasius and by-products processing line to ensure that waste into the environment is minimized, practicing circular economy, and further improving wastewater treatment capabilities.

Attending COP 28, Ms. Nguyen Thi Tra My, CEO of PAN Group, noted that since PAN places a high priority on sustainable development, the Group is particularly interested in the opportunity to reach out to partners and green financial solutions through exchanges and cooperation with experienced organizations and businesses worldwide. This helps the Group carry out its projects by providing crucial financial resources and expertise.

With the participation of over 130 Heads of State and government leaders from various countries to discuss and seek long-term solutions in response to climate change, COP28 is regarded as the most important multilateral conference on climate change this year. It is also anticipated to be the most comprehensive COP meeting to date, fostering cooperation and dialogue between regions worldwide to identify viable and practical resolutions to the climate crisis.

For its part, since Vietnam’s announcement at COP26 in 2021 of its commitment to reach net-zero emissions by 2050, the Vietnamese Government, along with ministries, sectors, and localities, has taken bold and specific efforts to achieve this goal.

Along with the government’s efforts towards Vietnam’s green commitment, an increasing number of businesses and financial institutions are incorporating ESG principles into their investment activities and encouraging capital flows towards sustainable business practices. The ESG transition will not be a choice but a critical survival factor for businesses.

The State Bank of Vietnam has reported that, since 2017, green credit has posted average annual growth of 23 per cent, with agriculture being one of two sectors attracting the most green capital, accounting for 31 per cent of total outstanding green credit. Analysts estimate that to achieve its net-zero emissions target by 2050, Vietnam will need to mobilize resources of up to $144 billion, which poses a challenge in determining how to unlock green capital flows.

Under the MoU, Standard Chartered Vietnam will assist PAN in accessing financial solutions and services based on ESG considerations in order to meet the financing needs of the Group’s sustainable development projects. These projects will have the chance to access green credit lines and sustainable linked loans with medium and long terms and various support in terms of interest rates and disbursement procedures.

In line with this, green credit-funded projects will also be subject to recurring evaluations that will verify adherence to Standard Chartered Vietnam’s sustainable financing framework and specific ESG criteria. Additionally, this presents the PAN Group with another excellent chance to further align its sustainable development strategy with global practices and guidelines.

This cooperative effort presents mutually-beneficial opportunities. The PAN Group can expand its financial options for its development projects and subsidiaries through ESG-related solutions. Likewise, by cooperating with PAN on ESG financial solutions, it can support the Group’s lineup of green projects. This, in turn, will help Vietnamese businesses gain access to the green finance market, which reinforces the government’s strong commitment to sustainable development goals, emissions reduction, and carbon neutrality.

Previously, on November 27, just prior to COP28, Prime Minister Chinh officially approved the “Sustainable development of one million hectares of high-quality, low-emission rice cultivation linked to green growth in the Mekong Delta region by 2030” project, which will have a profound impact on the organization of rice value chain production, not only contributing significantly to Vietnam’s carbon neutrality goal by 2050 but also helping improve the incomes and living standards of farmers.

In accordance with the government-level scheme, the PAN Group has been carrying out parallel sustainable development projects in the agricultural sector. Recently, the Group formally cooperated with the Dong Thap Provincial People’s Committee to develop and carry out the “Improving Rice Farmers’ Income” project in the Mekong Delta province. The project aims to form and develop a multi-value rice chain, reduce greenhouse gas emissions, and increase farmer incomes by 30 per cent by 2025. The results attained in the project are expected to be replicated and implemented in other provinces around the country.

Members of the Group’s agricultural business, including Vinaseed, VFC, and Vinarice, are working with a number of respectable partners to establish a closed-loop rice value chain in the Mekong Delta. This includes supplying quality input materials, providing standard farming solutions, guaranteeing the purchase of output products, and processing, packaging, and branding for distribution. In the initial phase, the value chain will be implemented on a model scale, and will then be evaluated and expanded based on effectiveness in each area.

Additionally, many member companies of the PAN Group are also involved in World Bank, SNV, and other projects that support addressing climate change and promote sustainable agricultural development in the central highlands and the Mekong Delta.

The Group views sustainable development initiatives as a top priority and will continue to fulfil its recent commitments in agriculture through specific action plans and cooperation with relevant parties.