Green finance and the sustainable transition of small and medium-sized enterprises: International experiences and policy implications for Viet Nam

Abstract

As climate change and resource depletion continue to cause serious environmental and social impacts, many countries have introduced green finance as a solution to help small and medium-sized enterprises (SMEs) shift toward sustainable business models, reduce emissions, and use resources more efficiently. This paper reviews key theories related to green finance and the sustainable transition of businesses. It also analyzes and builds a framework to explain how green finance influences SMEs, both directly and indirectly. The study uses a literature-based approach and develops a multi-dimensional analytical model using case studies from the European Union, the United Kingdom, the United States, and Japan. Based on this analysis, the paper proposes several policy recommendations for Vietnam, including improving legal frameworks and green finance standards for SMEs, creating more diverse and flexible financial tools, building technical support systems and digital platforms to help businesses meet ESG standards, and strengthening the role of financial intermediaries in connecting green capital with SMEs.