This study aims to explore the impact of ESG disclosure on the firm performance of financial institutions in Vietnam. Using data from 50 listed financial institutions between 2016 and 2023. The key applied methodologies are ordinary least squares (OLS), fixed effects model (FEM), random effects model (REM), and Feasible Generalized Least Squares (FGLS). First, ESG disclosure is positively and significantly associated with return on assets (ROA) and return on equity (ROE), indicating that stronger ESG practices contribute to improved operational efficiency and profitability; second, the relationship between ESG disclosure and Tobin's Q is insignificant, suggesting that markets may not fully value ESG initiatives; third, firm size, value, and regulatory compliance are found to significantly affect financial performance. Based on the empirical findings, the study recommends that Vietnamese financial regulators and industry associations should collaborate to establish a national ESG data platform to consolidate fragmented information and enhance transparency and comparability. Additionally, differentiated incentive policies should be implemented for institutions with high ESG ratings in order to promote the sustainable transformation of the financial system. These measures would not only encourage more proactive ESG engagement among financial institutions but also provide institutional support for Vietnam’s sustainable development objectives.
