Until recently, environmental, social, and governance (ESG) commitments were largely viewed as voluntary corporate initiatives, often confined to sustainability reports and investor relations. Today, ESG is becoming an integral part of financial regulation, risk management, and capital allocation.
That transformation is unfolding rapidly across Vietnam’s banking sector. The “Vietnamese Banking Sector’s 2020-2025 Journey Towards Sustainability” report, released by Fair Finance Vietnam, evaluates the public ESG commitments of 14 major commercial banks against international sustainability standards, offering one of the most comprehensive snapshots of how the sector has evolved over the past five years.
Changing landscape
Much of the conversation around ESG over the past decade has focused on disclosure. Companies were encouraged to publish sustainability reports, announce Net Zero ambitions, and adopt international reporting standards. Increasingly, however, those expectations are becoming regulatory obligations rather than voluntary initiatives.
Globally, the post-pandemic period accelerated this transition. New reporting requirements such as the EU’s Corporate Sustainability Reporting Directive, climate disclosure standards, and growing scrutiny over supply chains have transformed ESG into a core element of financial decision-making rather than a communications exercise. International banking regulators have also expanded guidance on climate-related financial risks, signaling that environmental and transition risks should be treated alongside traditional credit risks.
Vietnam’s policy landscape has evolved at remarkable speed. Since 2020, the country has introduced a series of regulations covering environmental risk management, greenhouse gas accounting, green classification standards, and preparations for a domestic carbon market. In 2025, ESG was referenced for the first time in Politburo Resolution No. 68 on private sector development, elevating the concept from a market-driven practice to a national policy priority.
Those developments fundamentally change what is expected of banks. ESG is increasingly becoming part of prudential risk management, credit evaluation, and long-term business strategy. That shift is particularly important in Vietnam, where bank lending remains the dominant source of corporate financing. As exporters face stricter carbon requirements through mechanisms such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and supply chain regulations like the EU Deforestation Regulation, banks inevitably become gatekeepers to the country’s broader economic transition.
Tangible progress
Vietnam’s commercial banks have undoubtedly made progress since ESG commitments were first assessed in 2020. Overall policy scores have nearly doubled over the five-year period, while the gap between top-performing and lower-performing banks has narrowed, suggesting sustainability is becoming embedded across the industry rather than driven by a handful of early adopters. Green credit has also continued to expand, growing at an average annual rate of 14.6 per cent between 2020 and 2025, though it still accounts for just 4.5 per cent of total outstanding credit.
The progress is becoming increasingly visible in the products banks offer and the systems they are putting in place, rather than simply in their public commitments. Sustainable funding, for instance, is gradually becoming part of mainstream banking. By the end of 2025, Vietcombank, Agribank, BIDV, Techcombank, HDBank, and SeABank had all completed inaugural green bond issuances or established green finance frameworks aligned with international standards set by the International Capital Market Association and the Loan Market Association.
These initiatives provide banks with new sources of capital specifically earmarked for financing environmentally-sustainable projects, marking an important step toward building Vietnam’s green finance ecosystem.
Several lenders have also moved beyond traditional green lending to develop dedicated sustainable finance frameworks. ACB, for example, has committed to using proceeds from sustainable bonds exclusively for eligible green projects, including renewable energy infrastructure and related technologies. The bank has also expanded its preferential lending program for sustainable businesses, doubling the size of its dedicated credit package from VND2 trillion ($76.9 million) to VND4 trillion ($153.8 million) within little more than a year.
The shift extends beyond environmental finance. Eleven of the 14 banks assessed now prepare sustainability reports using Global Reporting Initiative standards, or almost three times as many as in 2022, reflecting growing convergence with international reporting practices. Yet only ACB has gone a step further by obtaining independent third-party assurance of its sustainability report, highlighting how external verification remains the exception rather than the norm.
The report also points to a broader maturation of ESG practices across the sector. Climate commitments, once confined to only a handful of institutions, have become widespread, with 13 of the 14 banks now disclosing climate-related policies. The number of banks adopting restrictions on coal financing has doubled, while several lenders have introduced environmental and social risk assessments for large-scale projects.
MSB, VPBank, Agribank, Eximbank, and VietinBank stand out for their commitments to financial inclusion, while SeABank, HDBank, MSB, VietinBank, and Agribank disclose the most comprehensive customer protection policies, including cybersecurity awareness, complaint-handling mechanisms, and data privacy commitments.
Where policy meets practice
Despite publishing more ESG-related information than ever before, Vietnamese banks are beginning to see diminishing returns from disclosure alone. The report found that average ESG policy scores changed little from the previous assessment, suggesting the industry’s early momentum is starting to level off.
That does not mean banks are making less progress. Rather, it reflects a shift in what progress now requires. The first phase of ESG adoption was largely about establishing policies, governance structures, and reporting frameworks. The next phase will depend on whether those commitments influence how banks lend, assess risk, and allocate capital. That distinction matters because banks exert their greatest environmental and social influence not through their own operations but through the businesses they choose to finance.
The assessment found that while all 14 banks now disclose environmental and social risk frameworks for lending, far fewer explain how those frameworks are applied in practice. Only five banks publish sector-specific exclusion lists, while most provide little information on how they verify borrowers’ compliance with environmental and social requirements after loans are approved.
The implementation gap extends well beyond climate policy. Banks have made meaningful progress in strengthening their own employment practices, human rights commitments, and procurement policies. BIDV, VPBank, and SeABank have introduced labor and environmental requirements for suppliers, signaling that ESG is extending beyond banks’ internal operations.
Yet those expectations are not consistently reflected in lending relationships. The report notes that banks rarely require borrowers to demonstrate commitments on issues such as gender equality, human rights, or broader environmental performance. Several banks disclose financing for women-owned businesses, for instance, but few translate those efforts into measurable lending targets. Likewise, while anti-discrimination policies are common within banks, systematic commitments to prevent gender discrimination among customers or financed businesses remain limited.
Climate finance presents a similar picture. Nearly every bank assessed now recognizes climate change as a strategic issue, and the number of institutions restricting coal financing has doubled since the previous assessment. Several lenders have also introduced environmental and social risk assessments for large-scale projects and expanded financing for renewable energy.
However, comprehensive lending policies for high-carbon sectors remain the exception rather than the rule. As global markets tighten climate disclosure requirements and carbon regulations reshape international trade, these gaps are likely to face growing scrutiny.
In many respects, Vietnam’s banking sector has completed the first phase of ESG adoption: building policies, governance structures, and disclosure practices. The next phase will be far more demanding. Rather than asking whether banks have ESG policies, the key question is whether those policies influence credit decisions, investment portfolios, and risk management.
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