Abstract
Green credit is the source of capital provided for business investment projects that effectively use natural resources; respond to climate change; manage the waste; control pollution, improve environmental quality; restore natural ecosystems; conserve nature and biodiversity and generate other environmental benefits to achieve economic prosperity, environmental sustainability and social equity. Therefore, the paper is approached on the basis of a combination of the traditional legal analysis method and the law and economics combining method to clarify the legal and economic aspects of green credit according to the criteria of green growth and sustainable development. The research results show that green conditions for credit granting requests are the basis for credit institutions to make credit granting decisions that not only meet the requirements prescribed by law but also ensure the harmony among benefits of credit institutions (as a business entity in the economy), investors (with many risks that are difficult to predict) as well as macroeconomic development goals through development stage. Legalizing the green content in credit granting is a task that needs to be implemented immediately. This contributes to promoting the development of many green projects and environmentally friendly projects as well as minimizes negative impacts from credit granting decisions which does not rely on green criteria in practice and minimizes legal risks for stakeholders.
References
Al-Qudah, A.A., Hamdan, A., Al-Okaily, M. et al. The impact of green lending on credit risk: evidence from UAE’s banks. Environmental Science and Pollution Research (2022). https://doi.org/10.1007/s11356-021-18224-5.
Alex Nicholls. (2021). Policies, Initiatives, and Regulations Related to Sustainable Finance. This background paper was prepared for the report Asian Development Outlook 2021: Financing a Green and Inclusive Recovery.
Barua, S. (2020). Chapter 9. The Green Banking Regulatory and Policy Framework. In Principles of Green Banking: Managing Environmental Risk and Sustainability, pp. 101-120). Berlin, Boston: De Gruyter. https://doi.org/10.1515/9783110664317-009.
Dang, T. T., & Nguyen, T. T. (2021). Developing Green Bank Operation in India and Vietnam: Comparison And Evaluation. Asian Journal of Business Environment, 11(3):33–43. https://doi.org/10.13106/AJBE.2021.VOL11.NO3.33.
Decision No. 11658/QD-TTg dated October 1, 2021 of the Prime Minister approving the National Strategy on Green Growth in the 2021 - 2030 period, with a vision of 2050.
Decision No. 986/QD-TTg dated August 8, 2018 of the Prime Minister approving the Strategy for Development of the Banking Industry in Vietnam to 2025, with orientation to 2030.
Elvira Valerevna Sitnikova, Irina Nikolaevna Tretyakova, Tatyana Sergeevna Kolmykova. (2015). Role of Credit Resources in Modernisation of Russia's Economy. Procedia Economics and Finance. Vol. 24: 659-665.
Gao, D.; Mo, X.; Duan, K.; Li, Y. Can Green Credit Policy Promote Firms’ Green Innovation? Evidence from China. Sustainability 2022,14,3911. https://doi.org/ 10.3390/su14073911.
He, L., Gan, S. & Zhong, T. (2022). The impact of green credit policy on firms’ green strategy choices: green innovation or green-washing?. Environmental Science and Pollution Research (2022). https://doi.org/10.1007/s11356-022-20973-w.
Hetong Wang et al. (2022). Green credit policy, government behavior and green innovation quality of enterprises. Journal of Cleaner Production Vol.331. 10 January 2022, 129834.
Hongmin Zhang , Cong Qin. (2021). Research on the Influence of Green Credit in the Operation and Management of Commercial Banks. Advances in Social Science, Education and Humanities Research, Volume 551:255-258.
Hsu, CC., Quang-Thanh, N., Chien, F. et al. Evaluating green innovation and performance of financial development: mediating concerns of environmental regulation. Environmental Science and Polluttion Research 28, 57386–57397 (2021). https://doi.org/10.1007/s11356-021-14499-w.
Hyoungkun Park and Jong Dae Kim. (2020). Transition towards green banking: role of financial regulators and financial institutions. Asian Journal of Sustainability and Social Responsibility 5:5. https://doi.org/10.1186/s41180-020-00034-3
Kanak Tara & Ritesh Kumar (2015), Green Banking for Environmental Management: A Paradigm Shift. Current World Environment. Vol. 10(3), 1029-1038.
Khairunnessa, F., Vazquez-Brust, D. A., & Yakovleva, N. (2021). A Review of the Recent Developments of Green Banking in Bangladesh. Sustainability, 13(4), 1904. https://doi.org/10.3390/su13041904
Kim Ngoc, Nguyen Thi Kim Thu. (2015). Trends of green economic development in the world, Vietnam Social Science Journal No. 5(90):9-17.
Law No. 72/2020/QH14 dated November 17, 2010, on environmental protection.
Law No. 47/2010/QH12 dated June 16, 2010, on Credit Institutions.
Law No. 17/2017/QH14 dated November 20, 2017 of the National Assembly amending and supplementing a number of articles of the Law on Credit Institutions.
Lei., Wang, Y., Zhao, D. et al. (2021). The local-neighborhood effect of green credit on green economy: a spatial econometric investigation. Environmental Science and Polluttion Research 28, 65776–65790. https://doi.org/10.1007/s11356-021-15419-8
Raberto, M., Ozel, B., Ponta, L. et al. (2019). From financial instability to green finance: the role of banking and credit market regulation in the Eurace model. Journal of Evolutionary Economics 29, 429–465. https://doi.org/10.1007/s00191-018-0568-2.
Park, H., Kim, J.D. (2020). Transition towards green banking: role of financial regulators and financial institutions. Asian Journal of Subtainability and Social Responsibility 5, 5. https://doi.org/10.1186/s41180-020-00034-3.
Tran, T., Do, H., Vu, T & Do, N. (2020). The factors affecting green investment for sustainable development. Decision Science Letters , 9(3):365-386.
The UN Environment Inquiry. (2017). On the Role of Central Banks in Enhancing Green Finance, Inquiry Working Paper, No.17/01.
UNEP-UN Environment Programme, Green Economy. Aviable at: https://www.unep.org/regions/asia-and-pacific/regional-initiatives/supporting-resource-efficiency/green-economy.
Vien, The Giang., Vo, Thi My Huong. (2019). Green credit development policy and issues raised in the legal regulations on credit extension, Banking Journal No. 23:19-23.
Virginia Harper Ho. (2018). Sustainable Finance & China’s Green Credit Reforms: A Test Case for Bank Monitoring of Environmental Risk. Cornell International Law Journal. Vol. 51:610-668.
Vika Nath, Nitin Nayak, Ankit Goel. (2014). Green Banking Practices – A Review, International Journal of Research in Business Management. Vol. 2, Issue 4, Apr 2014, 45-62. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2425108.
Yuanyuan Peng, Rashid Latief & Yueshu Zhou. (2021). The Relationship between Agricultural Credit, Regional Agricultural Growth, and Economic Development: The Role of Rural Commercial Banks in Jiangsu, China, Emerging Markets Finance and Trade, 57:7, 1878-1889, DOI: 10.1080/1540496X.2020.1829408
Zhigang Chen et al. (2022). Can green credit policy promote low-carbon technology innovation? Journal of Cleaner Production Vol.359, 20 July 2022, 132061.
Zhou, X.Y, Caldecott, B.L., Hoepner, AGF., & Wang, Y. (2020), Bank Green Lending and Credit Risk: An Empirical Analysis of China’s Green Credit Policy, University of Oxford Smith School of Enterprise and the Environment Working Paper 20-08.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Copyright (c) 2022 Lex Humana (ISSN 2175-0947)