Transition finance for hard-to-abate sectors in Vietnam

This guide by the Climate Bonds Initiative provides a strategic framework for corporates, investors, and policymakers in Vietnam to implement transition finance in hard-to-abate sectors, specifically steel, cement, and basic chemicals. It outlines a methodology for developing science-based transition plans aligned with the Paris Agreement, featuring a 'Five Hallmarks' approach to ensure targets are credible, actionable, and transparent. The document also provides sector-specific decarbonisation levers, emissions intensity thresholds, and a five-tier maturity scale for financial institutions to assess corporate transition progress.

• The guide proposes a 'Five Hallmarks' framework to ensure corporate transition plans are credible and science-aligned: Paris-aligned targets, robust plans, implementation action, internal monitoring, and external reporting.
• A credible transition plan must adhere to five core principles: goals must align with 1.5°C limits, be established by the science community rather than the entity, exclude offsets, prioritize technological viability over economic competitiveness, and be demonstrated through actual operating metrics.
• The steel sector is the largest industrial emitter, accounting for approximately 7% of global CO2 emissions. In Vietnam, the sector is responsible for 7-9% of total national emissions and 46% of industrial emissions.
• The cement industry accounts for approximately 7% of global CO2 emissions. Vietnam is the world's third-largest cement producer, with production emissions representing about 15% of the country's total economic emissions.
• The basic chemicals sector is the largest industrial energy consumer globally, using approximately 10% of total global energy demand. Scope 3 emissions are particularly significant, accounting for approximately 64% of the sector's total emissions.
• Financial institutions can use a five-tier maturity scale to categorize corporate transitions: 1. No action, 2. Committed, 3. Aligning, 4. Aligned, and 5. Net Zero.
• Sustainability-linked bonds (SLBs) and loans (SLLs) are recommended for hard-to-abate sectors when there are insufficient specific green projects to support a Use-of-Proceeds (UoP) bond.
• To avoid 'greenwashing' and ensure comprehensive decarbonisation, the guide mandates that performance targets and KPIs must account for all material emissions across Scope 1, 2, and 3.

APA

Gupta, S., & Wong, C. X. (2025). Transition finance for hard-to-abate sectors in Vietnam. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Vietnam-Report_English.pdf

Chicago

Gupta, Shaurya, and Chi Xiang Wong. Transition finance for hard-to-abate sectors in Vietnam. Climate Bonds Initiative, 2025. https://www.climatebonds.net/files/documents/publications/Vietnam-Report_English.pdf.

Wikipedia

{{cite report |last1=Gupta |first1=Shaurya |last2=Wong |first2=Chi Xiang |title=Transition finance for hard-to-abate sectors in Vietnam |publisher=Climate Bonds Initiative |date=April 2025 |url=https://www.climatebonds.net/files/documents/publications/Vietnam-Report_English.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gupta2025transition, author = {Gupta, Shaurya and Wong, Chi Xiang}, title = {{Transition finance for hard-to-abate sectors in Vietnam}}, institution = {Climate Bonds Initiative}, year = {2025}, month = apr, url = {https://www.climatebonds.net/files/documents/publications/Vietnam-Report_English.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }