In recent years, the term “green finance” has become increasingly prominent across international economic forums. However, for Vietnam, green finance is not merely a global trend. It is gradually emerging as a critical pillar of the country’s strategy for sustainable economic development, particularly in light of Vietnam’s commitment to achieving net-zero emissions by 2050.
Alongside the green transition agenda, Vietnam is also pursuing a broader ambition: the development of International Financial Centres (IFCs) in Ho Chi Minh City and Da Nang. Within this strategic vision, green finance is not simply a new investment sector; rather, it is viewed as a key driver for attracting international capital, modernizing financial institutions, and strengthening Vietnam’s position within the regional financial architecture.
The convergence of green finance and the IFC strategy is opening a new chapter for Vietnam’s financial markets. At the same time, it raises important questions regarding legal frameworks, regulatory governance, and the role of the business and legal communities in supporting this transition.
Green finance: from global trend to Vietnam’s urgent necessity
Green finance refers to financial instruments and mechanisms designed to mobilize capital for projects that generate positive environmental and sustainability outcomes. Such projects commonly include renewable energy, sustainable infrastructure, clean transportation systems, carbon reduction technologies, and circular economy initiatives.
In the context of intensifying climate change challenges, green finance has rapidly evolved into a multi-trillion-dollar segment of the global financial system. Financial instruments such as green bonds, sustainability-linked loans, ESG investment funds, and carbon credit markets are increasingly integrated into international financial markets.
For Vietnam, the development of green finance is not driven solely by international commitments but also by domestic economic imperatives. Various international studies suggest that Vietnam will require hundreds of billions of dollars over the coming decades to finance energy transition, climate resilience infrastructure, and sustainable urban development.
This scale of investment far exceeds the fiscal capacity of the public sector alone. Consequently, mobilizing private capital and international financial flows has become essential.
In this context, green finance functions not merely as a niche investment category, but rather as a strategic bridge connecting Vietnam’s sustainable development needs with global capital markets.
International Financial Centres: a strategic step forward
Parallel to the development of green finance, Vietnam is pursuing the establishment of International Financial Centres (IFCs) in Ho Chi Minh City and Da Nang.
The concept of an IFC is not new. Global financial hubs such as London, Singapore, Hong Kong, and Dubai demonstrate how a sophisticated financial ecosystem can serve as a powerful engine for economic growth, foreign investment attraction, and integration into global financial networks.
Yet today’s financial centres are evolving. Increasingly, they are positioning themselves as global hubs for sustainable finance.
London, for instance, is not only one of the world’s leading financial centres but also among the largest global markets for green bond issuance. Similarly, Singapore and Hong Kong have actively developed regulatory frameworks to support green finance, sustainable investment, and ESG financial products.
Against this backdrop, linking Vietnam’s IFC ambitions with green finance development represents a strategic alignment with global financial trends.
An IFC is not simply a geographic concentration of banks and financial institutions. It is also a platform where innovative financial products, international transparency standards, and modern dispute resolution mechanisms are developed and applied. As energy transition and sustainability become central priorities worldwide, green finance could become one of the core sectors enabling Vietnam to attract international financial flows.
Legal frameworks: a decisive factor
Despite Vietnam’s significant potential in green finance, the success of this strategy will ultimately depend on the robustness and credibility of the legal and regulatory framework.
International experience indicates that successful green finance markets are built upon three essential foundations: transparency, regulatory stability, and investor confidence.
In recent years, Vietnam has taken several important steps in this direction, including the introduction of regulations related to green bonds, ESG disclosure standards, and carbon market development. However, building a truly effective green finance ecosystem requires further regulatory refinement.
First, Vietnam needs to develop a clear green taxonomy, establishing precise criteria for determining what qualifies as a “green” project. Such a taxonomy is crucial to prevent greenwashing, where projects are labelled as environmentally friendly without delivering genuine environmental benefits.
Second, ESG disclosure standards must be further strengthened and aligned with international frameworks. Global investors increasingly rely on environmental, social, and governance indicators when making investment decisions, and transparency will be a key determinant in attracting long-term capital.
Third, the development of carbon markets will play a significant role. A functioning carbon credit trading system can provide financial incentives for emission reductions while simultaneously creating a new segment within the financial services industry.
Finally, any successful IFC requires credible and transparent dispute resolution mechanisms, including international arbitration systems capable of addressing cross-border financial transactions and complex investment disputes.
The role of businesses and the legal profession
The growth of green finance depends not only on government policy but also on the active participation of corporations, financial institutions, and the professional advisory community.
As financial transactions become increasingly complex and globalized, the role of legal professionals is becoming more critical. Areas such as green bond issuance, renewable energy project financing, ESG compliance advisory, and carbon credit transactions require sophisticated legal expertise aligned with international practices.
At the same time, as the number of green investment projects grows, disputes related to project finance contracts, cross-border investments, and infrastructure development agreements are likely to become more frequent. This trend underscores the need for modern, transparent dispute resolution frameworks consistent with international standards.
For law firms operating in Vietnam, this transformation presents a significant opportunity to expand legal services into emerging areas of sustainable finance, while contributing to the development of a transparent and stable legal environment for financial markets.
Toward a sustainable financial ecosystem
Green finance and Vietnam’s ambition to establish International Financial Centres should not be viewed as separate policy initiatives. Rather, they represent two interconnected elements of a long-term national development strategy.
If implemented effectively, green finance could play a pivotal role in attracting international capital, accelerating technological innovation, and improving the quality and sustainability of economic growth in Vietnam.
However, realizing this potential will require continued efforts to strengthen the legal framework, enhance market transparency, and align regulatory standards with international practices.
In this process, the engagement of the private sector, financial institutions, and the legal community will be instrumental in building a resilient and internationally competitive financial ecosystem.
Green finance, therefore, should not be seen merely as a passing trend. Instead, it may well become one of the foundational pillars of Vietnam’s financial system in the decades ahead, while simultaneously opening new horizons for the development of legal and financial services within the country.
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