Green Finance Spotlight: Vietnam’s Green Taxonomy Officially Issued – Paving the Way for Sustainable Investment Waves

FiinRatings – a Strategic Partner of S&P Global – is pleased to announce the Green Finance Spotlight: "Vietnam’s Green Taxonomy Officially Issued – Paving the Way for Sustainable Investment Waves". The commentary offers a comprehensive analysis of Decision No. 21/2025/QÐ-TTg, its implications for the credit and green bond markets, and the opportunities and challenges in implementation.

FiinRatings – a Strategic Partner of S&P Global – is pleased to announce the Green Finance Spotlight: "Vietnam’s Green Taxonomy Officially Issued – Paving the Way for Sustainable Investment Waves". The commentary offers a comprehensive analysis of Decision No. 21/2025/QĐ-TTg, its implications for the credit and green bond markets, and the opportunities and challenges in implementation.

Key Highlights:

• The Vietnam Green Taxonomy has been officially issued under Decision No. 21/2025/QD-TTg dated July 4, 2025, titled “Regulation on Environmental Criteria and Verification of Investment Projects under the Green Taxonomy” (hereinafter referred to as “Decision 21”). The Taxonomy defines 45 eligible sectors across 7 industry groups, establishing a critical legal foundation for the development of the domestic green finance market, including green credit and green bonds. It establishes a unified set of environmental criteria to identify and screen projects that qualify for green financing, supporting the sustainable transition of Vietnam’s key economic sectors.
• The green project verification mechanism has been revised to allow greater flexibility: Verification may now be conducted upon request by the project owner and allows for multiple verification pathways through independent verifiers that meet either national standards (e.g., TCVN ISO/IEC 17029:2020) or international standards (e.g., ISO/IEC 17029:2019, ISAE 3000). This facilitates greater access to green capital for businesses and enhances transparency and credibility for lenders and investors in these financial instruments.
• The Green Taxonomy opens substantial opportunities for financial institutions and enterprises to participate in the green finance market: through credit channels leveraging supportive policies such as the interest subsidy of 2% per year under National Assembly Resolution 198/2025/QH15 and strategic guidance under Resolution 68-NQ/TW on private sector development. On the bond side, a number of Vietnamese firms have been applying international voluntary standards such as the Green Bond Principles. The introduction of Vietnam Green Taxonomy provides a basis for more concrete support and incentives, paving the way for the potential strong growth of the green bond market in the near term.
• The issuance of this regulation affirms the Government of Vietnam’s efforts to unlock green capital and gradually align with the global and regional momentum in green credit and green bond markets. In reality, Vietnam faces a substantial and diverse capital demand to upgrade its sustainable infrastructure. This marks a positive signal indicating strong market growth in the near future. The Green Taxonomy is expected to serve as a common language for investors, issuers, financial institutions, and regulators, laying a technical foundation for businesses seeking to invest in green projects and assets but still struggling with capital access.
• The current Green Taxonomy will serve as a stepping stone for Vietnam to advance further in developing new sustainability standards and principles, bringing the country closer in alignment with high-standard markets such as the EU and the US, and contributing to the global goal of carbon neutrality by 2050.
• However, there remain key challenges to address: high compliance costs, limited technical capacity, and a complex verification process that requires close coordination among stakeholders at both enterprise and regulatory levels. Alongside phased guidance from the government, businesses must also be well-prepared in terms of governance capacity and transparency in reporting and disclosures to proactively and effectively access green incentives. Investors, in turn, can use the new Green Taxonomy requirements to better manage portfolio risks and set clear expectations for issuers and businesses.

If you require further information about the commentary or seek in-depth consultation regarding Sustainable Finance services, please do not hesitate to contact us:

• Email: support.fiinratings@fiingroup.vn
• Phone: (+84-24) 3562 6962

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