SSC, GIZ to develop green capital market

Friday, Apr 24, 2015 08:00

The green economic development model has become a common trend in the global economy but is still new in Viet Nam. — File Photo

HA NOI (Biz Hub) — The State Securities Commission (SSC) and the German Federal Enterprises for International Co-operation, better known as GIZ, will collaborate to develop a green capital market.

The collaboration will take place under a new co-operation framework of the Macroeconomic Reform/Green Growth Program during 2015 to 2017.

This was revealed yesterday during the workshop on "Support for Development of Capital Market in Viet Nam" in Ha Noi.

With a focus on green financial sector reform, the program aims to develop policies and regulations to facilitate capital mobilization in the capital market for green investments.

Michael Krakowski, GIZ's Chief Technical Advisor and program Director in Viet Nam, said GIZ would support SSC and market participants to develop a green listing policy, which sets disclosure requirements on the green investment portfolio by listed companies and implements corporate social responsibility in the form of a code of conduct for the capital market.

GIZ has also helped develop concepts for green financial products, including green indices, green bonds, green investment funds and certificates, in order to meet demand for financial products that are resilient to climate change.

"These financial products will allow investors to make a positive impact on society and the environment, while pursuing their financial targets," Krakowski said.

The green economic development model has become a common trend in the global economy but is still new in Viet Nam. However, the Vietnamese Government has realized the importance of green growth and made it a key focus in a Resolution, April 24, 2015 on the socio-economic development strategy during 2011 to 2020 and under a five-year development plan for 2015.

According to the HCM Stock Exchange, there are currently 308 companies listed on the exchange with a total market capitalization of around US$47 billion, accounting for nearly 88 per cent of the total market capitalization of the country's stock market.

"All listed companies on the HCM City's exchange are large companies that could represent the Vietnamese economy. If they all become green, I trust the outreach of the ‘green economy' would be extremely significant," said a representative from the HCM Stock Exchange.

Jochem Lange, country director, GIZ Viet Nam, said financing sustainable development and green growth was challenging for the banking system and the capital market of Viet Nam and he suggested this process should engage the private sector towards Green Growth.

During the past two decades, SSC and GIZ have co-operated in the framework of the "Financial System Development" action under the GIZ Macroeconomic Reforms Program, which has focused on supporting Viet Nam for the establishment of a legal framework for market operations, human resource training and developing new products. — VNS

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