Legal and strategic drivers of sustainable business transformation: case studies from Vietnam

Purpose This study aims to examine the dual-driver dynamics of legal frameworks and corporate strategies in advancing sustainable business transformation in Vietnam. It addresses a research gap by integrating legal reform analysis with strategic corporate adaptation – two dimensions often treated in isolation – thereby revealing their dialectical interplay under rising environmental, social and governance (ESG) pressures. Design/methodology/approach The study uses qualitative content analysis of Vietnam’s key environmental and corporate legal instruments (e.g. Environmental Protection Law 2020, Securities Law 2019, Enterprise Law 2020), alongside trade agreements (EU-Vietnam Free Trade Agreement, Comprehensive and Progressive Agreement for Trans-Pacific Partnership). It also analyzes ESG disclosures from four leading Vietnamese firms (TH Group, Vinamilk, An Phát Holdings, Vinasoy). This enables systematic coding of regulatory texts and corporate strategies to elucidate the law–strategy interaction. Findings Three main findings emerge: (1) Vietnam’s legal regime is shifting from command-and-control to an enabling compliance model (e.g. extended producer responsibility, carbon markets); (2) new-generation free trade agreements create indirect regulatory pressure aligning domestic firms with global ESG norms; and (3) ESG-leading firms do not merely comply but internalize ESG and shape emerging norms within a transitional legal system. Research limitations/implications The study is limited by its qualitative scope and focus on large firms in Vietnam, thus not fully capturing ESG dynamics among SMEs. Future research should extend comparative analysis within ASEAN and apply mixed methods to empirically validate the dual-driver framework. Practical implications The findings guide policymakers in designing adaptive, harmonized and globally aligned ESG regulations. For firms, the study illustrates how law can be leveraged strategically, not just as a compliance burden but as a source of competitive advantage and innovation. Social implications By clarifying how legal systems and corporate strategy co-drive sustainable development, the study highlights law’s catalytic role – not only in enforcing compliance, but also in promoting innovation, environmental stewardship and social accountability. Originality/value This study advances a dual-driver analytical framework that conceptualizes sustainable transformation as a feedback process between legal reforms and corporate strategy, challenging the passive compliance model. It emphasizes responsive regulation and the strategic agency of firms as norm-shaping actors.