Prudential Vietnam, in collaboration with Climate Bonds Initiative (CBI) and supported by the British Chamber of Commerce (BritCham), conducted the “Thematic bonds & Transition investment Workshop” on 6th July in Hanoi to solicit feedback on how to support the growth and development of the thematic/labelled bond market in Vietnam.

The workshop was opened by the CEO of Prudential Vietnam, Phuong Tien Minh and Climate Counsellor of the British Embassy Hanoi, Mark George. Then, the British Embassy Hanoi’s First Secretary for Climate and Nature, Tom Thornley delivered an overview on UK Government’s JETP engagement and broad ambitions on climate and nature in Vietnam. “Back in March this year, the UK set out its vision for halving global emissions by 2030 and advancing the net zero, climate resilience and nature positive economic transition globally. I think it is key that we recognize that this vision will not be achieved without partnerships. High impact, long-term partnership between countries – such as between the UK and Vietnam – and partnership between different fields – research, policy, and, of course, finance” – Tom stated.

“In many ways, the UK and Vietnam are well aligned on climate. We have both set ambitious targets to reach net zero by 2050, and the UK is eager to partner with like-minded countries globally. To do this, the UK has doubled its international climate finance to 11.6 billion pounds of funding between 2021 and 2026. Using this finance, the UK is supporting developing countries and emerging economies like Vietnam to respond to the challenge of climate change and realize their net-zero ambitions”, he added.

Key stakeholders from the green bond market such as global non-profit, securities company, major local banks, rating agency and Prudential Vietnam’s asset management arm Eastspring took this opportunity to share knowledge on findings, best practices from markets in ASEAN, as well as learnings, frictions, and barriers to accelerate the growth of the Vietnamese thematic/labelled bond market.  

According to Chi Xiang Wong – the senior ASEAN Analyst from CBI, an international organisation working to mobilise global capital for climate action, in his sharing about the 2022 Sustainable Finance State of the Market in ASEAN and Vietnam, noted an increasing diversification of thematic issuance in the region. Increasing interest has been observed from various stakeholders, including policymakers, regulators and the financial industry, with supportive efforts and initiatives on sustainable finance to accelerate the green growth of Viet Nam, CBI has seen various initiatives by policymakers – such as the guidance issued by the central bank on environmental risk management in credit extension activities, alongside a handbook commissioned by the securities regulator and prepared by CBI on how to issue thematic bonds in Viet Nam.  

Ngo The Trieu, CEO of Eastspring Investments Vietnam, the asset management arm of Prudential, provided experience and case studies on Sustainable Investment Journey. He said in his presentation that global ESG-focused funds attracts new money inflows from investors and growth prospect of ESG-focused funds is promising. According to Trieu, financing needs for climate actions in Vietnam will become significant soon, including great contribution from private financial sector resources. Prudential Vietnam has a key role to play to support the Vietnam Government on the 2050 net-zero target. A critical aspect of supporting the transition towards a low-carbon economy is the investment of sustainable finance mechanisms in which the green bond is key in the Vietnam context.

During his opening speech, the CEO of Prudential Vietnam, Phuong Tien Minh stated: “As a life insurer and the non-bank biggest asset owner in Vietnam, Prudential has a responsibility to our clients, the communities and environment in Vietnam. We consider the environment, society, and governance when making investment choices and uphold our fiduciary and stewardship obligations. Financing the transition to net zero future is a long-term journey that requires large scale and cohesive inputs from the key Vietnamese financial sector players. Today’s workshop is another step that Prudential would like to take to reinforce our interest in the sustainable development of the Vietnam Market”.

The workshop participants had a productive session, where ideas and solutions of how to further develop the thematic/labelled bond market were generated. The thematic/labelled bond market has an important role to mobilise private capital to invest and fund the transition to net-zero in Vietnam. Prudential Vietnam and partners are looking forward to working with the Vietnamese Government to sustainably develop the thematic/labelled bond market to support the pathway to achieve Vietnamese Government’s 2050 net-zero target.

Back in December 2022, JETP agreement was signed between the International Partners Group (IPG), including G7 plus Norway, Denmark, and Vietnam, which set out an agreement to work on energy transition. It includes commitments on both sides. On the IPG side, it is to mobilize finance and expertise to support Vietnam. On the Government of Vietnam side, it is a commitment to establish a mechanism to be able to utilize the support from the IPG. Prudential is one of the financial institutions that are specifically working on JETP agreement, together with Standard Chartered, HSBC and others.