Climate Bonds launches Vietnam transition finance guide for hard-to-abate sectors

The Climate Bonds Initiative launched Transition Finance for Hard-to-Abate Sectors in Vietnam, providing a decarbonisation methodology for steel, cement, and basic chemicals. Its CBAM-driven, ISSB- and TCFD-aligned framework offers Indian exporters in emissions-intensive sectors a directly relevant template for credible transition planning.

The guide provides a structured methodology for steel, cement, and basic chemicals, sectors that together account for over 70% of global industrial CO₂ emissions, to adopt science-based decarbonisation plans meeting investor and regulatory expectations. Rooted in the Climate Bonds Initiative's Five Hallmarks of a Credible Transition Plan, it covers emissions baselining, pathway alignment, governance, financing, and performance monitoring, with sector-specific roadmaps and tools to measure progress against science-based targets and align with TCFD and ISSB disclosure frameworks.

Vietnamese companies in steel, cement, and chemical manufacturing are directly affected, facing mounting international pressure including the European Union's Carbon Border Adjustment Mechanism (CBAM), which threatens export competitiveness absent credible climate action. Investors increasingly require transparent, measurable transition plans before committing capital to emissions-intensive firms. Financial institutions are also affected, expected to use the guide to evaluate borrower alignment with net-zero and sustainable lending criteria, while case studies feature international leaders such as JSW Steel and Holcim.

Companies should adopt credible transition pathways to mitigate risk, attract sustainable investment, and maintain global competitiveness against CBAM exposure, using the guide's governance recommendations, action checklists, and comparison of financing instruments like sustainability-linked bonds and loans. The Climate Bonds Initiative will collaborate with Vietnamese corporates in hard-to-abate sectors on transition planning and capacity building. Affected entities should monitor this support and align disclosures with TCFD and ISSB frameworks to access ESG-conscious capital.

Key figure — Emissions share: steel, cement and chemicals exceed 70% of global industrial CO₂