Vietnam’s Green Taxonomy: New Criteria for Recognizing “Green” Investment Projects
On June 20, 2025, the Prime Minister issued Decision 21/2025/QD-TTg, officially introducing Vietnam’s Green Taxonomy – a national classification system for “green” investment projects. This milestone aims to standardize the definition of green investment, direct capital flows toward sustainable projects, and bring transparency to evaluation standards. For businesses and investors, the Green Taxonomy is not just a label – it is a potential gateway to preferential financing, international partnerships, and long-term competitive advantage.
I. Green Taxonomy – More Than a Certificate, a Strategic Tool
Under Decision 21, a project must meet all three pillars to be recognized as “green”:
- Environmental criteria: reduce greenhouse gas emissions, improve resource efficiency, protect biodiversity.
- Social criteria: safeguard workers’ rights, generate positive community impact.
- Governance criteria: ensure transparency, comply with corporate governance standards.
Notably, these criteria are designed to align with international practices, allowing Vietnamese projects to connect more easily with global ESG-focused investors and funds.
II. Opportunities and Benefits of Green Recognition
- Access to preferential capital: Banks and ESG funds often offer lower interest rates or higher credit limits to certified green projects.
- Enhanced reputation and brand value: Recognition builds trust with investors, customers, and the wider community.
- Expanded international cooperation: Especially in renewable energy, clean manufacturing, and sustainable infrastructure sectors.
III. Legal Risks if Unprepared
- Failing to meet criteria post-financing: Could lead to disputes or repayment obligations.
- Inaccurate public disclosures: May trigger legal liabilities and damage credibility.
- Falling behind on updated standards: The Green Taxonomy will be periodically revised to reflect global trends.
IV. Tran & Co. – Strategic Legal Partner for Green Compliance
We assist businesses and investors to:
- Assess current status and identify gaps against the green criteria.
- Structure legal and project documentation to meet Green Taxonomy requirements from the planning stage.
- Establish ESG compliance and reporting mechanisms to maintain certification and maximize long-term benefits.
The Green Taxonomy is not merely a regulatory instrument – it is a strategic gateway into the global sustainable investment ecosystem. Proactively meeting green criteria today positions businesses not only for legal compliance but also to capture future growth opportunities in the ESG era.
