Task Force on Climate-related Financial Disclosures 2023

The world is making significant efforts to gradually achieve the Net Zero emissions target, and Vietnam has also made firm commitments in the fight against climate change.

The Vietnamese Government pledged to reduce methane emissions by 30% by 2030 and to reach Net Zero emissions by 2050 at COP26. In addition to reaffirming its commitments to reduce greenhouse gas emissions, Vietnam is one of the first 63 countries to participate in the Global Cooling Pledge proposed at COP28. Towards the ambitious climate target, the banking system plays a crucial role in reallocating capital away from high-emission sectors to focus on initiatives to combat climate change.

Given that context, the Task Force on Climate-related Financial Disclosures (TCFD) was established in 2015 by the Financial Stability Board (FSB) to provide recommendations to help institutions in developing climate-related disclosures. After eight years since its inception, over 4,800 organizations, ranging from businesses to governments, have supported the TCFD’s recommendations. In addition, at the G20 Finance Ministers and Central Bank Governors in November 2023, the Basel Committee on Banking Supervision (BSBS) also declared that proposals on climate change risk reporting of the banking system would soon pushed through, expected by the end of 2024. Implementing TCFD guidelines will provide a solid foundation for VPBank to meet the expectations of stakeholders (regulators, investors, lenders, etc.) regarding disclosure quality enhancement and transparency of information on the Bank's climate risks.

With experience in integrating climate risk management into its risk management framework, coupled with the adoption of best practices from major global financial institutions, VPBank continues to publish its report in alignment with TCFD recommendaitions for the fiscal year 2023. The disclosure of climate-related financial information is expected to provide a clear and transparent picture of how VPBank is accomplishing its Net Zero emissions target, thereby making a strong contribution to the fight against climate change. On the journey towards the ultimate goal, VPBank acknowledges that developing and refining tools and methodology are of great importance to forecast the climate change impacts on the Bank’s business. By implementing strategy based on the forecasting results, VPBank expects to provide financial solutions that support domestic businesses in transitioning to a green and circular economy, thereby, reducing carbon footprints and enhancing their competitiveness. VPBank believes that the cooperation of the government, regulatory authorities, the financial system and the business community is critical for a successful transition, fostering sustainable economic growth, ensuring energy security and mitigating the adverse impacts of climate change.

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