ESG Practices and Customer-Based Performance: Insights from the Dairy Industry in Vietnam

Abstract

Environmental, Social, and Governance (ESG) practices have become an increasingly important component of corporate responsibility in the fast-moving consumer goods (FMCG) sector, particularly in the dairy industry where sustainability, food safety, and environmental responsibility are critical concerns. This qualitative study explores how ESG practices are perceived and communicated in the Vietnamese dairy sector and how they relate to customer-based performance. Data were collected through ten in-depth interviews with marketing experts working in the dairy industry, including professionals responsible for brand management, sustainability communication, and marketing strategy. The data were analysed using thematic analysis. The findings reveal three key themes. First, marketing experts increasingly view ESG as a strategic orientation rather than merely a regulatory or compliance requirement. Second, among the three ESG dimensions, environmental and social practices are perceived as the most visible and actionable in the dairy sector, particularly in relation to sustainable farming, environmental protection, product safety, and community engagement. Governance practices, although essential for corporate accountability, are viewed as less visible to consumers and therefore less influential in shaping customer perceptions. Third, the findings suggest that ESG initiatives do not automatically translate into improved customer-based performance. Instead, sustainability marketing emerges as an important mechanism through which ESG initiatives are communicated and interpreted by consumers. Transparent and credible sustainability communication can strengthen brand credibility, customer trust, and positive word-of-mouth, whereas overly promotional claims may trigger scepticism and concerns about greenwashing. The study also indicates that sustainability initiatives complement, rather than replace, core product attributes such as quality, safety, and price in shaping consumer purchasing decisions in the dairy market.