Environmental, Social, and Governance impact on financial and market performance of listed companies in the Vietnam’s stock market

This study examines the impact of ESG activities, a corporate action that is gaining increasing attention, on firm performance. With a sample of 556 observations from 139 companies of VNX Allshare index being listed on HOSE and HNX within the period of 2018 - 2021, the study discovers that while firms that actively implement ESG earn superior financial performance over those passively implementing ESG, investing in those active-ESG stocks does not realize excess returns. This evidence suggests that market investors have not appropriately evaluated and sufficiently acknowledged the benefits of investing in ESG even though it brings financial outcomes. This research contributes to the understanding of the role and impact of ESG on businesses and investors in Vietnam.