Vietnam has committed to achieving net zero emissions by 2050. Amidst the rapid expansion of renewable energy infrastructure and increasingly stringent international standards, green finance is becoming a key term for the business community. In an interview with VnExpress, Abdul Raof Latiff shared how DBS partners with Vietnamese businesses to overcome challenges in accessing green capital and implementing environmental, social, and governance (ESG) practices.

Abdul Raof Latiff, chief executive officer of DBS Vietnam. Photo: DBS

"As Vietnam transitions to renewable energy and commits to net zero by 2050, what opportunities arise for investors and businesses?" Latiff was asked.

Latiff responded, "Vietnam is entering a critical transition phase where renewable energy accounts for a growing share, coupled with the Net Zero 2050 commitment. This context creates opportunities to attract investment capital, particularly foreign direct investment (FDI), while fostering new growth for sectors such as renewable energy, green infrastructure, sustainable agriculture, and water management."

From a financial perspective, businesses that proactively embrace green transition, enhance data transparency, and improve ESG governance will gain an advantage in accessing long-term, low-cost capital and integrating more deeply into global value chains.

"What are the main reasons Vietnamese businesses hesitate to transition to more sustainable models or invest in green projects?" Latiff was asked.

Latiff explained, "Through our work, we observe that the primary barrier is a lack of awareness and knowledge about ESG. Many entities do not fully understand the long-term benefits or how to implement these practices effectively."

Additionally, the initial investment costs for green technology are often high, with returns not immediately apparent, making many small and medium-sized enterprises (SMEs) reluctant to transition.

"A significant challenge is data verification. To qualify for green credit, businesses need accurate data to demonstrate their ESG commitments. However, collecting and measuring data, especially scope 3 emissions from the supply chain, is complex. Many entities struggle to gather and monitor these metrics from their suppliers. Data transparency is key for businesses to access green capital; without transparent data, the door to affordable foreign capital narrows," Latiff added.

"Given these barriers, what specific solutions does DBS offer to help Vietnamese businesses effectively access green capital?" Latiff was asked.

Latiff stated, "We focus on collaborating with businesses to build appropriate transition roadmaps for each stage. DBS offers two main financing forms: 'green loans' for projects with clear capital usage purposes, such as renewable energy or green buildings; and 'sustainability-linked financing', where loan terms are tied to specific sustainable performance targets committed by the business. If these targets are met, businesses can enjoy preferential interest rates. This approach encourages continuous environmental performance improvement, rather than short-term 'greenwashing'."

Beyond financing, DBS also provides advisory on financing structures, mergers and acquisitions, and supports businesses in meeting international standards. Simultaneously, we offer digital solutions to optimize cash flow management processes, helping to monitor and update information in real time. This enhances transparency, improves risk control, and meets the increasing demands from investors and international markets.

DBS Bank operates in 19 markets, focusing on three main growth axes: Southeast Asia, China, and South Asia. Photo: DBS

"Green finance is a goal for many banks. What is DBS's advantage in this area?" Latiff was asked.

Latiff replied, "DBS's advantage lies in its deep understanding of the Asian market and industry-specific expertise. We have an extensive regional network, experience across 14 global industries, and a dedicated sustainability team that conducts technical assessments and approves loans. Experience from large-scale renewable energy projects, such as offshore wind or geothermal in other markets, enables DBS to advise and implement solutions tailored to Vietnam's context."

"How does the bank ensure capital is directed to genuine green projects and avoid greenwashing risks?" Latiff was asked.

Latiff elaborated, "We apply a strict assessment framework based on international standards such as the Green Loan Principles (GLP), along with classification systems like the ASEAN Taxonomy and Singapore-Asia Taxonomy. Each project must meet technical criteria with clear quantitative thresholds, for example, regarding emission intensity or energy efficiency."

"Simultaneously, DBS clearly defines exclusionary sectors, such as fossil fuel infrastructure or environmentally harmful production models. This approach helps minimize greenwashing risks and ensures measurable environmental impact," Latiff affirmed.

A wind power field in Khanh Hoa. Photo: Getty

"In the short and medium term, which sectors in Vietnam does DBS prioritize for green financing?" Latiff was asked.

Latiff responded, "Renewable energy remains a major focus, including solar and wind power. Additionally, we see significant opportunities in sustainable infrastructure, responsible agriculture, water management, and supply chains."

In Vietnam, we have participated in many key projects supporting the energy transition and the roadmap towards a low-carbon economy. A notable example is becoming a key sustainable financing partner for SP Group and Sembcorp Industries in Vietnam, mobilizing syndicated green loans totaling USD 120 million for their joint ventures and subsidiaries.

"Given the changing landscape, we also observe that sectors such as food, agriculture, technology, and oto are increasingly demonstrating commitment and a proactive approach to adopting sustainable practices. These sectors are driving demand for green financial solutions that we are fully capable of providing and eager to actively support," Latiff noted.

For instance, we supported a global agricultural product procurement company in implementing a sustainable working capital financing model, thereby improving supply chain transparency and enhancing farmer incomes. In another case, we assisted an oto industry client in expanding their hybrid vehicle distribution network, helping the business promote the shift towards sustainability.

Building on these successes, we will continue to expand financing for energy transition projects, sustainable agriculture, and green technology. DBS's goal is to be a strategic partner, providing not only capital but also knowledge and advisory solutions, helping Vietnamese businesses build long-term resilience and integrate more deeply into global value chains.

"Beyond supporting clients, how does DBS itself fulfill its social responsibility and green commitments?" Latiff was asked.

Latiff explained, "We start with our internal operations. DBS's paper consumption reduction program aims to cut paper usage by 5% annually in key markets. Carbon emission reduction and social responsibility factors are also integrated into our procurement processes. Through the DBS Foundation and community activities, we support social enterprises and communities, aiming to create a positive impact beyond finance, contributing to the sustainable development of society."

Minh Ngoc