Currently, Vietnam has set long-term objectives for developing sustainability and green growth, based on the effective use of natural resources to stimulate economic growth. Hence, the Vietnamese government prioritises fostering sustainable development, which has attracted much attention from both foreign and domestic investors.

National green growth strategy and innovative investment trends in Vietnam

National Green Growth Strategy

The Prime Minister adopted the National Green Growth Strategy 2021-2030, vision 2050, on the eve of the 2021 United Nations Climate Change Conference.

The Vietnam Green Growth Strategy (VGGS) aims to quicken the economic restructuring process to use natural resources effectively, and reduce greenhouse gas emissions by applying technologies. Green growth will take the lead in sustainable economic development to achieve a low-carbon economy and enhance natural capital. 

Because of the rising interest in sustainable development, enterprises have the direction to incorporate sustainability into their business models, policies, and plans. Additionally, enterprises can also take advantage of the trend since governments focus on creating opportunities and incentives for sustainable enterprises.

Vietnam sustainable growth trends

Globally, a number of organizations, nations and investors have taken steps to expand the sustainable investment trend, with ESG investing being the most well-liked. Environmental, social, and corporate governance (ESG) elements serve as a framework for investors looking to invest in businesses that are concerned with sustainability and the issues facing the world today. 

According to Mrs. Lim Bey An, Head of the Green Finance and Asset Management Division at the Monetary Authority of Singapore (MAS), "Asia's economy is still developing, and fossil fuels will continue to play a critical part in that expansion. We cannot make this decision lightly, notwithstanding the fact that Asia still has a long way to go in terms of sustainability. It is critical to consider the economic and social repercussions before the implementation stage. However, considering the unique characteristics of the area, action must be performed with caution.

Southeast Asia's largest solar market, Vietnam, is now experiencing the highest level of investment in the field of renewable energy. In an effort to encourage sustainable and environmentally friendly growth, Vietnamese banks and organizations have made a variety of investment commitments for overseas investors.

Pioneering Corporation in Green Investments and Development

New green investment projects coming into Vietnam are strongly following the trend of green production. The first $1 billion projects of 2022 in Vietnam is a toy factory project that grants Lego Manufacturing Vietnam Co (Denmark) the authority to import, export, wholesale, and retail items in Binh Duong. Over 1.3 billion USD had been invested in the project overall, representing a 15-year investment difference. 

Notably, this will be Lego's first carbon-neutral facility, as it pledges to use solar rooftop power and alternative energy sources, which are necessary for new consumption trends. Consumers are particularly interested in whether the product was made using environmentally friendly practices in addition to quality and pricing concerns. These elements will soon contribute to the competitiveness of the economy and goods in Vietnam.

One of the four focuses in Suntory PepsiCo Vietnam's sustainable growth strategy for the years 2021–2025 is converting to more ecologically friendly materials and reducing packaging waste. According to Mr. Jahanzeb Khan, General Director of Suntory PepsiCo, Pepsi's recycled plastic soft drink bottles are first introduced to the Asian market in recent years. 

To keep up with the trend of green development, FDI capital also gives the production, professional, scientific, and technological domains greater consideration. Some significant FDI projects (like Samsung's) have represented typical cases of improving connectivity and fostering the capacity development of domestic component suppliers.

Endeavour to Attract Private Green Investments

To encourage the green investments in Vietnam market, The National Assembly passed Resolutions No. 43 on fiscal and monetary policies to support the socio-economic recovery and development program, and No. 31 on the economic restructuring plan to mobilize resources for socio-economic recovery and development in the context of Covid-19 epidemic effective control.

Not only the government, but Standard Chartered Bank Vietnam and the British Business Association Vietnam (Britcham) also signed a cooperation agreement at the beginning of September 2021 in order to promote sustainable development in Vietnam and implement ESG standards in the firm.

Without the agreement and operational execution of the business community, the shift from a brown economy to a green economy can rarely be effective. According to calculations by the Ministry of Planning and Investment and the World Bank, to implement Vietnam's green growth strategy by 2030 is expected to need about 30 billion USD. The state budget can meet up to 30% of resources, opens up a lot of investment opportunities in potential fields such as agriculture, energy, finance, consumption, etc that investors can consider to set up business. 

Fortunately, there was a noticeable shift in FDI initiatives. A number of sustainable energy projects have recently received licenses, such as the project for the Bac Lieu LNG Thermal Power Center's liquefied natural gas (LNG) power plant (Singapore). 

Foreign investors' interest in the green economy and green production creates positive effects on Vietnam's economy. The eco-industrial park model has received more attention, accompanied by the improvement of related policies as well as an increase in investment of industrial real estate developers (for example, industrial parks).

Conclusion

There are rules and requirements that must be satisfied in order to achieve the aims of green growth. Sustainability and green growth are long-term goals that would be game-changing factors to boost national economics, bringing benefits to both domestic & foreign enterprises. Green products and projects will also assist to form higher pricing segments, which will help offset the additional expenses as they switch to green operations. Therefore, the wide application of Vietnam sustainable growth would bring numerous potential benefits to private investors.

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