Title: THE IMPACT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) FACTORS ON FIRM FINANCIAL PERFORMANCE OF COMPANIES RANKED IN THE CORPORATE SUSTAINABILITY INDEX (CSI) IN VIETNAM

Authors: Dinh The Hung, Nguyen Ha Anh and Nguyen Doan Tam

Abstract: This study aims to build a research model to study the impact of Environmental, Social, and Governance (ESG) on the operating efficiency of 25 companies ranked in the Corporate Sustainability Index (CSI) by Vietnam Chamber of Commerce and Industry (VCCI) in stock exchange in Vietnam, and how the firm life cycle moderates this relationship, particularly during 5 periods (2020-2024). Amid a global crisis, ESG criteria have gained significant traction among investors seeking resilient and sustainable business models. By analyzing empirical data from (HOSE) and (HNX), this research investigates the correlation between ESG performance and key financial indicators, including Return on Assets (ROA), Return on Equity (ROE), and Tobin’s Q. The findings indicate that firms with strong ESG practices exhibit enhanced stability and profitability, even amid economic uncertainty. This study enhances our understanding of how ESG practices can serve as strategic tools for growth and competitiveness in the Vietnamese market, offering insights into effective investment strategies that promote a green economy.

Keywords: Environmental, ESG, Firm Performance, Governance, Social.

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