ESG Implementation in Vietnamese Commercial Banks

Abstract

This paper examines the current status and challenges of integrating Environmental, Social, and Governance (ESG) principles within Vietnam’s banking sector. The study reveals that although major institutions such as Vietcombank, BIDV, VietinBank, and Techcombank have begun adopting ESG-oriented strategies—through green loans, sustainability-linked bonds, and responsible investment initiatives—the overall level of commitment remains modest, with an average ESG score of 1.11 out of 10. Among the three components, Environmental (E) performance is weakest, while Governance (G) demonstrates relatively higher maturity. The paper identifies critical barriers, including the absence of standardised ESG frameworks, limited professional expertise, and inadequate data transparency. Nevertheless, the trend toward ESG adoption is expected to accelerate, driven by investor demand, regulatory encouragement, and international sustainability commitments. The study emphasises that strengthening ESG practices can enhance banks’ reputation, attract sustainable investment, and align Vietnam’s banking industry with global financial sustainability standards.