Integrating ESG criteria into SHB moves the bank forward

For example, large European banks such as BNP Paribas and Deutsche Bank are actively promoting ESG by creating sustainable finance funds and adopting strict environmental standards. Europe has also introduced the EU Taxonomy, a legal framework for classifying these economic activities. This helps banks identify and transparently report their ESG activities.

Nguyen Thi Tuyet Hanh, Director of the International Project Management Department of Saigon Hanoi Commercial Joint Stock Bank (SHB)

In Asia, Singapore’s DBS has undertaken many related initiatives through financing green projects and developing sustainable financial products. Japan, through major banks such as Mizuho and Sumitomo Mitsui, has developed financial policies based on climate and risk management.

In the US, banks such as Bank of America and JPMorgan Chase have invested heavily in renewable energy and created socially responsible investment funds. This not only creates economic profit, but also helps improve reputation and trust with customers and investors.

In Vietnam, ESG adoption opens up many opportunities for local commercial banks, including attracting investment capital and enhancing brand reputation. However, it also poses challenges related to initial investment costs, regulatory changes and stringent governance requirements from international investors and partners. Banks need to have specific strategies in place to take advantage of opportunities and minimize potential risks.

Among them, SHB aims to become a pioneer bank in the field of sustainable development in Vietnam by integrating ESG standards into all practices, helping to promote a green economy, a fair society and transparent governance.

For three decades, SHB has been committed to its ethical character and concrete actions based on its core values, which are the basis of the bank’s brand philosophy and corporate culture aimed at shareholders, partners, customers, employees and the community. As a pioneer in sustainable finance, SHB integrates ESG principles into its strategy, aiming to become a leading bank for efficiency and a top retail bank.

At the same time, SHB strives to become a leader in providing capital and financial services to strategic enterprises with supply chains, value chains and green ecosystems, promoting economic growth, environmental responsibility and social justice, while ensuring transparent governance to create long-term value for all stakeholders . .

Innovation programs

Since 2003, SHB has been involved in internationally funded projects promoting Vietnam’s sustainable development in various fields such as renewable energy, efficient energy transmission, sustainable agriculture, high-tech agriculture and rural development. These initiatives, totaling billions of dollars in value, have been funded by international development organizations and multilateral institutions.

At the same time, SHB consistently leads in the efficiency and effectiveness of project implementation. In 2023, he was selected as the risk-sharing fund manager for the Vietnam Energy Efficiency Scheme, financed by the Green Climate Fund through the World Bank, totaling $86.3 million.

The scheme is an innovative financial instrument in which the SHB, on behalf of the donor, issues credit risk guarantees to participating financial institutions providing loans to sub-projects investing in energy-saving technologies. The initiative is expected to accelerate and expand the adoption of energy efficiency in Vietnam.

From the outset of its involvement in international projects, SHB has established processes and policies requiring its clients to comply with ESG standards set by international organizations. These efforts have not only allowed SHB to attract additional international funding and engage in new ESG-focused projects, but also served as the basis for developing and improving internal policies aimed at strengthening these practices across all of the bank’s operations.

To further implement ESG standards, SHB has created a Green Finance Development Task Force and hired dedicated staff to manage ESG. The Bank, in consultation with IFC, has developed policies and procedures to assess environmental and social risks in its lending activities.

SHB prioritizes lending to green sectors, small businesses and women-led enterprises, with a focus on developing tailored financial products and increasing the share of these sectors in its loan portfolio. Through these efforts, SHB continues to position itself as a leader in promoting sustainable finance in Vietnam.

Operationally, SHB is investing heavily in digital transformation, reducing the use of paper and office supplies and strictly controlling energy consumption. The bank has significantly reduced its annual consumption of fuel, electricity and water. In addition, internal communication campaigns are regularly conducted to raise employee awareness about resource conservation and environmental protection.

In the social sphere, SHB adheres to a fair HR policy, promotes the creation of a modern and fair working environment and ensures maximum protection of employee rights. The Bank supports social welfare programs, community development initiatives and provides assistance to policy beneficiaries and disadvantaged groups.

In the area of ​​governance, SHB applies transparent and responsible corporate governance practices in line with international standards to ensure the sustainability of all operations. The company’s performance is disclosed publicly and transparently to investors, shareholders and clients, enhancing SHB’s reputation as a reliable and sustainable financial institution.

Taking on major commitments

The government plays a key role in laying the foundation for green banking and sustainable finance by introducing supportive policies and a clear regulatory framework for sustainable finance. Developing long-term development strategies and targeted support measures can create the necessary conditions for sustainable finance initiatives to flourish and achieve meaningful results.

As part of its commitment to promoting ESG adoption in the banking sector, SHB invites the government and SBV to consider developing specific regulatory guidance, including assessment criteria and transparent reporting requirements, to provide clearer guidance to banks.

Periodic ESG reporting by banks and financial institutions can improve transparency, comparability and accountability across the sector. In addition, reward and incentive mechanisms for institutions demonstrating strong ESG performance could encourage wider adoption.

To promote green finance and sustainable products, the government could consider creating financial support programs, such as tax breaks or fee reductions, for green finance projects and products. Establishing a national fund to support investment in green technologies, ESG management systems and related activities could also be a valuable step forward.

Equally important is capacity building within the industry. Collaborating with education and training institutions to deliver customized ESG training programs for bank managers and employees can improve internal competence. Additionally, increasing public awareness of the importance of ESG and the benefits of sustainable products and services can help drive demand and wider adoption.

Promoting research and innovation can also accelerate progress. Funding research institutions to develop tools and models for effective ESG implementation and encouraging banks to develop innovative financial products such as ESG-linked loans or green bonds could position Vietnam as a leader in sustainable finance.

By taking these steps, the government could help create a supportive ecosystem for sustainable finance, allowing the banking sector to play a role in addressing environmental and social issues while promoting long-term economic sustainability.

SHB and the ESG Path: Creating Social Value at Every Stage SHB (Saigon-Hanoi Commercial Bank) has reaffirmed its mission to stimulate inclusive national development, minimize environmental impact and create sustainable, long-term value for society. This commitment is not just a slogan, it is demonstrated through practical actions.

SHB awarded VLCA award for fourth time Saigon Hanoi Commercial Bank (SHB) was named among the top 10 companies with the best annual reports in the financial sector at the 2024 Vietnam Listed Company Awards (VLCA) in Da Lat, Lam Dong on November 16.