Almost all of the banks operating in Vietnam have lacked official policies and systems to manage environmental and social risks of their customers, according to a recent survey.

The survey was conducted in June at 54 credit organisations operating in Vietnam by the International Financial Corporation (IFC) in Vietnam and the State Bank of Vietnam (SBV).

It showed that one of the main obstacles to initiating policies on social and environmental risk is the lack of the sector’s specific guidance on environmental and social risk management in credit activities.

Almost all of the banks needed to apply better norms on environmental and social risk assessment for businesses’ loans to improve sustainability of projects, it said.

According to Simon Andrews, IMF Regional Manager in Vietnam, Cambodia, Laos and Thailand, managing sustainable development of environment and social issues will bring new business opportunities to banks, such as support for energy saving and recycled energy.

Cat Quang Duong from the SBV said that the central bank is willing to cooperate with the IFC to promote the sector’s environmental and social risk management.

He said the survey indicated almost all banks are not aware of impacts from environmental and social risks on their business.

Cooperating with the SBV to improve environmental and social risk management in the banking sector is an activity in the IFC’s advisory services programme in order to promote sustainable growth in Vietnam.-VNA