Hanoi, Vietnam, April 12, 2021— The State Securities Commission (SSC) introduced the Handbook on “How-to Issue Guide for Green Bonds, Social Bonds and Sustainability Bonds”. Green, Social, and Sustainability bonds are meant to raising private sector finance for projects with environmental and social benefits. These are considered as innovative financing tools to mobilize financing from the private sector to scale up and achieve national climate plans, support the Sustainable Development Goals and the 2015 Paris Climate Agreement.
Mr Pham Hong Son, SSC Deputy Chairman speak at the launch
The growth of the labelled bond market, and green bond in particular, has attracted a diversified and more mainstream investor base. The institutional investor community (pension fund managers, assets managers…), with large portfolios including those with sustainability-related mandates, are increasingly seeking green and low-carbon investment opportunities. A recent IFC report indicated emerging market green bond issuances in 2019 amounting to $52 billion, a 21 percent increase from 2018, bringing the outstanding bonds to $168 billion.
Even at a time of a global pandemic, the demand for green, social and sustainability bonds continues to hit record oversubscriptions. In its report early 2021, Moody expected issuance to reach another new record $650 billion in 2021, a 32% increase over last year. This total will be comprised of approximately $375 billion of green bonds, $150 billion of social bonds and $125 billion of sustainability bonds.
Mr. Vu Chi Dung, Director General of International Cooperation Department introduces the Handbook on “How-to Issue Guide for Green Bonds, Social Bonds and Sustainability Bonds”
As a member of the ASEAN Capital Markets Forum (ACMF), SSC has been active in promoting the ASEAN Green Bond Standards (AGBS), ASEAN Social Bond Standards (ASBS), and ASEAN
Sustainability Bond Standards (ASUS), based on the International Capital Market Association (ICMA)’s Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines, to create a sustainable asset class in Vietnam.
This Handbook, in collaboration with the International Finance Corporation (IFC), the Climate Bonds Initiative (CBI) and the Swiss State Secretariat for Economic Affairs (SECO), provides corporate issuers, and other market players, guidance in applying the global and Asean standards as well as national regulations of green, social and sustainability bonds which can help mobilize resources from domestic and international capital markets for socioenvironmental friendly and sustainable projects.
At the launching event of the Handbook, Mr Pham Hong Son, SSC Deputy Chairman emphasized “This Handbook will support the market players to understand the international and regional practices in issuing green, social and sustainability bonds, managing the proceeds from those bonds as well as to following the related environmental and social impact reporting. The SSC considers the development of such labelled bond products as a key factor contributing to the sustainable development of Vietnam’s capital market.”
“IFC has been pioneering in a number of green bond transactions in the region and looking for opportunities in Vietnam’s promising green bond market. We believe that green bonds will be an effective vehicle for mobilizing long-term funding for sustainable infrastructure and renewable energy projects, which the traditional lending products might not be able to afford. This will help expand funding for Vietnam’s green and sustainable economic growth,” said Kyle Kelhofer, Country Manager for Vietnam, Cambodia and Lao PDR.
Following this launch, a training program on How to issue labelled bonds including learning sessions, case studies, interactive discussions and exercises to provide a valuable learning experience to participants will be conducted in both Hanoi and Hochiminh city.