Environmental, Social, and Governance (ESG) Standards and Financial Performance in Vietnam’s Media Sector

Abstract

While Environmental, Social, and Governance (ESG) standards are intended to promote sustainability, their actual impact on financial returns remains inconsistent and under-researched in emerging digital economies like Vietnam. Unlike manufacturing sectors such as clothing, the media and entertainment industry in Vietnam faces unique ESG challenges related to digital content responsibility and the profound societal influence of a young population. Understanding ESG’s financial relevance in this sector is critical for determining if ethical frameworks drive long-term value or act as a mandatory expense. Environmental, social, and governance (ESG) standards are metrics that evaluate a company’s ethical and sustainability efforts across three dimensions: environmental (e.g., emission reduction), social (e.g., employee welfare), and governance (e.g., regulatory compliance). We hypothesized that ESG standards had a significant impact on the financial performance of Vietnamese media and communication companies. Using a dataset of 179 observations, we analyzed the relationship between ESG scores and key financial indicators. Our findings indicated a statistically significant positive correlation between higher ESG scores and stronger financial performance, particularly for firms pursuing strong growth strategies. However, financial leverage negatively correlated with return on assets (ROA), suggesting that excessive debt might hinder profitability. These results highlighted the importance of ESG standard integration in corporate strategies to enhance financial stability and investor confidence. Our study contributed to the existing literature on ESG standards in developing economies and offers practical insights for business leaders and policymakers.