FACTORS AFFECTING ESG IMPLEMENTATION IN COMMERCIAL BANK SYSTEMS AND PERFORMANCE – AN EMPIRICAL STUDY IN VIETNAM

Abstract

This study analyses the factors influencing the implementation and impact of Environmental, Social, and Governance (ESG) applications on the performance of commercial banks in Vietnam. The research focuses on three primary factors: the characteristics of bank leadership, stakeholder pressure, and Big Data technology. Utilising a quantitative approach and employing Partial Least Squares Structural Equation Modelling (PLS-SEM), the study collected data from various commercial banks across Vietnam. The findings revealed that leadership characteristics, such as gender diversity (encouraging increased female leadership representation) and educational background (comprehensive training from advanced countries, strategic vision, strong commitment, and high awareness of ESG), are crucial in effectively implementing ESG policies. Additionally, stakeholders (i.e., government agencies, customers, and shareholders) play a significant role in exerting pressure on commercial banks to enforce ESG practices. Furthermore, adopting Big Data technology has proven to be a powerful tool in supporting sustainable development of data collection, analysis, and reporting. The application of ESG principles is shown to have a profound impact on the performance of commercial banks in Vietnam