Driving Vietnam’s Twin Transformation: UOB’s Role in Green & Digital Finance

Vietnam’s economic future is being shaped by two major forces: Sustainability and Digital transformation. As a leading financial institution, UOB is at the forefront of enabling businesses to thrive in this dual transition, bridging green finance and digital connectivity to drive long-term growth.

Bridging Sustainability and Digitalization for Vietnam’s Future

This transformation is not just a challenge, it is an opportunity for businesses to build resilience and gain a competitive edge in a rapidly changing landscape.

Green Transition: A Business Imperative

At the "Green Transition: From Pressure to Business Opportunity" forum, hosted by Nguoi Lao Dong Newspaper, Lim Dyi Chang, Country Head of Commercial Banking, UOB Vietnam, joined senior representatives from the Vietnamese government, financial institutions, and industry leaders to discuss the country’s sustainability roadmap.

Vietnam’s export-driven economy, with exports amounting to 90% of GDP in 2024, has long pushed large manufacturers to adopt ESG standards. However, SMEs still face challenges, including:

• Limited access to green financing - 65% of businesses struggle to secure funding.
• Lack of ESG expertise - Only 12% of Ho Chi Minh City enterprises have ESG-trained professionals.
• Fragmented regulations - Numerous policies from different government agencies create uncertainties among businesses to adopt sustainable practices.

"While large exporters have long integrated ESG standards, the real challenge lies in enabling SMEs to transition into sustainable models. Aligning regulatory frameworks and financial incentives will be key to ensuring that all businesses, regardless of size, can contribute to Vietnam’s green economy." - Lim Dyi Chang, Country Head of Commercial Banking, UOB Vietnam.

How UOB Vietnam is Advancing Green Finance

As part of UOB Group’s commitment to sustainable finance, UOB Vietnam is integrating ESG principles into its lending portfolio. By the end of 2024, 30% of UOB Vietnam’s commercial banking facilities qualified as green financing, reflecting a growing shift towards sustainability-driven investments.

UOB applies a structured approach when evaluating green finance opportunities:

• New Sustainable Projects - Large-scale renewable energy investments (e.g., hydro, solar farms), often backed by multinational investors.
• Certified Green Companies - Businesses already ESG-certified due to supply chain requirements, eligible for green working capital financing.
• Transition Financing - The largest opportunity in Vietnam, requiring government incentives, tax benefits, and risk-sharing mechanisms to support businesses transitioning from traditional to sustainable models.

"While green startups with innovative ideas are promising, banks would still prioritize project viability and sponsor credibility when evaluating financing opportunities." - Mr. Lim said.

The Role of Digital Transformation in Sustainability

At the "Breaking the Digital Frontier: Digital Transformation for a Sustainable Vietnam" panel, co-hosted by EuroCham Vietnam & Acclime Vietnam, discussions focused on the critical synergy between digitalization and green finance.

• Vietnam’s digital economy is projected to reach 18.3% of GDP in 2024, growing at over 20% annually.
• $368 billion USD in green investments is required by 2040 to meet Vietnam’s Net Zero goals.
• Technology plays a crucial role in improving transparency in green finance, assessing ESG risks, and expanding capital access for sustainable initiatives.

At the event, Mr. Lim emphasized: “A green economy cannot thrive without digital transformation. Technology enhances transparency in green finance, improves ESG risk assessment, and expands capital access for sustainable businesses. The synergy between digital and green transformation will unlock new growth opportunities for Vietnam.”

Balancing Profit, Sustainability, and Growth

To navigate Vietnam’s twin transformation, businesses must balance the "Three P’s" - Planet, People, and Profit. While sustainability is a priority, financial viability remains a key challenge.

• Government support - A clear green taxonomy and carbon trading mechanisms (expected in 2026) will be essential to facilitate green investments.
• Strategic investments - Digitalization will help companies streamline ESG compliance and enhance operational efficiency.
• Industry collaboration - The growing demand for sustainability consulting & green finance solutions presents new market opportunities.

Pioneering Vietnam’s Dual Transformation

With UOB’s sustainable finance portfolio exceeding SGD 58 billion in 2024, we remain committed to:

• Investing in high-tech industries such as telecommunications, media, and semiconductor-driven digital transformation.
• Providing innovative green financing solutions, from funding new projects to supporting ESG-certified businesses through sustainability-linked financing.
• Expanding strategic partnerships, such as our MoU with ITPC, to drive high-quality investments in green growth, digital transformation, and sustainable infrastructure.

Sustainability requires both green and digital innovation. UOB is committed to being a key enabler of this transformation.