Promoting Green Finance in Vietnam: Current Situation, Challenges and Institutional Reform Solutions

This paper analyzes the current situation, challenges and institutional reform solutions for promoting green finance in Vietnam during 2021-2025. Using qualitative research combined with descriptive statistics, the paper synthesizes data on green credit, green bonds, legal frameworks, ESG disclosure and climate-finance needs. The findings show that green finance in Vietnam has made clear progress: green credit outstanding has grown rapidly, the number of participating credit institutions has expanded, the green bond market has begun to record transactions aligned with international practices, and the national green taxonomy was adopted in 2025. However, the scale of green finance remains small relative to transition needs; capital is concentrated in a limited number of sectors; transaction costs are high; ESG data are fragmented; incentive mechanisms remain limited; and independent verification capacity needs to be strengthened. The paper proposes a solution framework covering effective taxonomy implementation, standardized disclosure, independent verification, blended finance, green bond development, integration of climate risk into banking supervision, SME support, carbon-market linkage and inter-agency coordination. Its main contribution is to approach green finance as an institutional ecosystem rather than as a set of separate financial products.