“Factors affecting the readiness for ESG reporting in Vietnamese enterprises”

Dung Thi Phuong Nguyen

Lien Thi Huong Nguyen
AUTHORS
Anh Thi Mai Nguyen
Long Le Thanh Phan

Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen and
Long Le Thanh Phan (2024). Factors affecting the readiness for ESG reporting in
ARTICLE INFO
Vietnamese enterprises. Problems and Perspectives in Management, 22(3), 263-
275. doi:10.21511/ppm.22(3).2024.21

DOI http://dx.doi.org/10.21511/ppm.22(3).2024.21

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 Problems and Perspectives in Management, Volume 22, Issue 3, 2024

Dung Thi Phuong Nguyen (Vietnam), Lien Thi Huong Nguyen (Vietnam),
Anh Thi Mai Nguyen (Vietnam), Long Le Thanh Phan (Vietnam)

Factors affecting
BUSINESS PERSPECTIVES
LLC “СPС “Business Perspectives”
the readiness for ESG
Hryhorii Skovoroda lane, 10,
Sumy, 40022, Ukraine reporting in Vietnamese
www.businessperspectives.org
enterprises
Abstract
Countries around the world are taking further steps toward transparency and corpo-
rate sustainability. Environmental, social, and governance (ESG) reporting will be re-
quired for all firms listed on European exchanges as of 2026 according to the Corporate
Sustainability Reporting Directive. Meanwhile, the companies’ rate in Vietnam report-
ing and disclosing ESG information is still limited. There is an empirical gap between
the theory and practices of ESG reporting in Vietnam. Therefore, this study aims to
investigate the determinants affecting the readiness for ESG reporting in Vietnamese
enterprises. Survey questionnaires and quantitative analysis are employed based on the
structural models using SmartPLS4 software to analyze the sample of 169 manufactur-
Received on: 9th of May, 2024 ing, commercial, and service enterprises in Vietnam. The findings show that accoun-
Accepted on: 23rd of July, 2024 tant qualifications, management processes, women on management boards, and infor-
Published on: 30th of July, 2024
mation technology systems positively affect Vietnamese firms’ readiness to report ESG.
The relationship between business executives’ ESG awareness, public media pressure,
© Dung Thi Phuong Nguyen, Lien Thi governmental guidelines, and the readiness for ESG reporting is not statistically sup-
Huong Nguyen, Anh Thi Mai Nguyen,
Long Le Thanh Phan, 2024
ported. Based on the research results, Vietnamese enterprises should increase women’s
participation on management boards, facilitate professional development and training
for accountants, invest in information technology systems, and improve management
Dung Thi Phuong Nguyen, Ph.D., processes to enhance the adoption of ESG reporting in Vietnam.
Senior Lecturer, School of Economics
and Management, Hanoi University of
Science and Technology, Vietnam. Keywords environmental, social, and governance reporting,
sustainability reporting, Vietnam
Lien Thi Huong Nguyen, Ph.D., Senior
Lecturer, College of Business and JEL Classification M14, M40, M41, Q56
Management, VinUniversity, Vietnam.
(Corresponding author)
Anh Thi Mai Nguyen, Ph.D., Senior INTRODUCTION
Lecturer, School of Economics and
Management, Hanoi University of Nations worldwide have been currently facing global issues such as
Science and Technology, Vietnam.
climate change, energy poverty, and resource depletion (European
Long Le Thanh Phan, MA, CEO,
Vietnam Institute of Directors (VIOD), Commission, 2021). Businesses are proactively accessing the most
Vietnam. popular international practices on environmental, social issues,
and governance (ESG) to apply them in their businesses. ESG
guides companies and other stakeholders in understanding how
to manage risks and take advantage of opportunities in these three
ESG aspects.

At the COP26 Climate Summit in Glasgow, Scotland, Vietnam de-

clared its intention to achieve net zero emissions by 2050. Therefore,
the Vietnamese government has prioritized issuing policy mecha-
nisms, which is the first step in implementing this commitment. The
This is an Open Access article, Vietnam Business Council for Sustainable Development developed
distributed under the terms of the the Corporate Sustainability Index (CSI) with 130 indicators in 2022
Creative Commons Attribution 4.0
International license, which permits (Ly, 2022). According to current regulations in Vietnam, only listed
unrestricted re-use, distribution, and firms with revenue of over 100 billion VND are required to disclose
reproduction in any medium, provided
the original work is properly cited. ESG. However, to meet current market needs, especially export mar-
Conflict of interest statement: kets, many small and medium businesses in Vietnam are interested in
Author(s) reported no conflict of interest and wish to apply ESG in production and business activities.

http://dx.doi.org/10.21511/ppm.22(3).2024.21 263
Problems and Perspectives in Management, Volume 22, Issue 3, 2024

The report on Readiness for ESG Practices in Vietnam conducted by PwC (2022), one of the Big4 audit-
ing companies in the world, shows that up to 80% of businesses have commitments or plan to practice
ESG in the next 2-4 years. From the investor’s viewpoint, VinaCapital, one of the leading investment
funds in Vietnam, clearly indicates that they will assess the ESG performance of firms they consider
investing in and include significant ESG concerns in financial analysis (VinaCapital, 2022). The com-
panies with ESG integrated into the strategy would have been publicly traded at higher share prices
and with lower capital costs (Chen et al., 2023). Therefore, implementing ESG reporting has become a
necessary trend for businesses to develop sustainably. However, ESG is still a new topic that needs to be
promoted in Vietnamese firms, especially in non-public companies, as well as small and medium enter-
prises (SMEs). Understanding the factors that affect the readiness for ESG reporting will help businesses
and stakeholders proactively have action plans to accelerate the process of applying ESG in Vietnam.

1. LITERATURE REVIEW washing (Henisz et al., 2019). ESG practices are in-
creasingly becoming a mainstream strategy, even
The term “ESG” was first used in a report titled mandatory in some countries, as ESG investment
“Who Cares Wins” by the United Nations Global in 2020 exceeded US$35,000 billion (Bloomberg
Compact in 2004 (United Nations, 2004). IFC Intelligence, 2022). In addition, ESG is increasing-
(2021) defines ESG as a framework covering gov- ly asserting its position in the world of investment,
ernance, social, and environmental aspects that as only 13% of investors worldwide suppose ESG
investors and businesses take into account when is a short-term movement. This shows that most
making decisions about investments and man- investors view ESG as an inevitable trend in long-
aging their operations in terms of opportunities, term investing (Ground, 2022). Furthermore, the
risks, and impacts. ESG is typically a criterion and European Banking Authority (EBA) indicates that
approach that investors employ to assess the com- ESG elements may positively or negatively impact
panies’ behavior and their potential financial per- the financial performance of an organization, sov-
formance (Weston & Nnadi, 2023). ereign, or a person (EBA, 2021).

First, environmental criteria evaluate issues re- A few main theories, such as stakeholder, signal,
lated to businesses’ influence on the living envi- and institutional theories, have been employed to
ronment, such as greenhouse gas emissions, water support the substantial increase in recent studies
and waste handling, raw material supply, and im- on ESG reporting. According to stakeholder the-
pacts from climate change. Second, social criteria ory, a company’s success comes from meeting its
evaluate issues related to businesses’ diversity, eq- stakeholders’ needs (Freeman, 2010). Everyone in-
uity, and inclusion internally and with stakehold- terested in, connected to, or impacted by the com-
ers, such as labor management, security and con- pany is considered a stakeholder in the ecosystem.
fidentiality data, and community relations. Third, This includes shareholders, employees, vendors,
governance criteria evaluate issues related to cor- customers, government agencies, community, and
porate governance, business ethics, intellectual others. ESG information is significant to a wide
property rights protection, and compliance with range of stakeholders. Based on stakeholder the-
legal regulations (EBA, 2021). ory, corporate managers can determine which
stakeholders are truly important to their compa-
Several studies have shown that ESG reporting nies when it comes to ESG reporting. Therefore,
can enhance transparency, increase corporate ESG information is released for strategic purposes
reputation and customer loyalty, lower expenses, to show that businesses are adhering to and sup-
improve business performance, and strengthen porting a variety of particularly influential stake-
competitive advantage (Ioannou & Serafeim, 2017; holders (Gray et al., 2003).
Ellili, 2022). Along with opportunities, ESG also
brings many challenges to businesses, such as a lack Signal theory posits that big firms disclose more
of robust ESG data, concern about performance information to users, which can help attract more
and sacrificing returns, and concerns over green- investors, thereby increasing the value of the com-

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 Problems and Perspectives in Management, Volume 22, Issue 3, 2024

pany’s stock (Spence, 1973; Rezaee, 2016). ESG that any ESG information damages companies, so
reporting serves as a mechanism for the volun- they tend not to report it to outsiders.
tary disclosure of ESG performance metrics and
information on sustainability initiatives (Lys et Previous studies indicated a positive correlation
al., 2015). In practice, businesses utilize this vol-between board gender diversity and ESG disclo-
untary non-financial disclosure to communicate sure and reporting (Bear et al., 2010). Considering
their sustainability successes, validate their exis- stakeholder theory, Arayssi et al. (2016) found a
tence, and uphold their corporate reputation since connection between companies’ good citizenship
it helps investors estimate economic profitability and the representation of women on corporate
(Acs & Audretsch, 2010). boards. Kamaludin et al. (2022) confirmed that
women on the board would be a catalyst to get
Institutional theory is a common framework used businesses to prioritize ESG disclosure and sus-
in the studies of ESG reporting (Campbell, 2007). tainability activities. Hillman et al. (2002) found
This theory focuses on how social, political, and that women directors took into account the inter-
economic processes affect how businesses func- ests of companies’ various stakeholders. There was
tion and acquire legitimacy (Meyer & Rowan, a greater awareness of sustainability issues among
1977). Flammer et al. (2019) argued that compa- women who served on boards (Bear et al., 2010).
nies with better ESG scores tend to apply sustain- Wang and Coffey (1992), Williams (2003), and Post
able activities and abide by sustainability stan- et al. (2011) stated that companies with a higher
dards. This theory provides a better understand- proportion of female board members tended to be
ing of the various institutional variables influenc- more philanthropic and charitable, and they also
ing an organization’s ESG reporting (Higgins & appeared to support more environmental efforts.
Larrinaga, 2014). Businesses that operate in na- Furthermore, women were typically associated
tions with comparable institutional systems typi- with nurturing qualities and greater care for so-
cally adopt comparable behavioral patterns, such cial issues (Arayssi et al., 2016; Bear et al., 2020).
as moral behavior (Scott, 1995). Having women on boards shows the social aware-
ness of gender diversity in companies (Kathy Rao
Based on signal theory, business executives’ et al., 2012; Kiliç et al., 2015; Velte, 2016). Peng and
viewpoints on corporate organizational behav- Chandarasupsang (2023) found that female di-
ior can significantly influence firm performance. rectors are significantly and positively associated
According to Huang et al. (2020), executives’ en- with ESG practices, especially in firms operating
vironmental awareness positively impacted their in less developed regions.
firms’ technological innovation, and they invest-
ed more in research and development to achieve ESG reporting guidelines have arisen as institu-
higher technological green innovation. Previous tional rules to address what content and methods
studies analyzed the essential role of executive are acceptable for disclosing sustainability infor-
cognition in motivating green technology innova- mation (Xenitidou & Edmonds, 2014; Gutiérrez‐
tion (Tan & Zhu, 2022). Executives’ ESG aware- Ponce, 2023). These governmental guidelines give
ness can offer technology and resources to ensure businesses a proper framework for disclosing sus-
enterprises’ green innovation practices and raise tainability information (Romito & Vurro, 2020).
their degree of green innovation. Darnall et al. (2022) found that Japanese firms ap-
plying ESG guidelines disclose 39% more sustain-
Public media pressure affects companies’ ESG re- ability information than those that do not adopt
porting. According to Buniamin et al. (2018), the ESG reporting frameworks for their sustainability
more urgent the public media interest, for exam- reports. Helfaya et al. (2023) demonstrated that
ple, time sensitivity or meeting stakeholder needs, the GRI had a significant impact on the full dis-
the greater the engagement level of ESG reporting closure of ESG initiatives in Europe. According
perceived by managers. When managers perceive to institutional theory, organizational structures
ESG information as necessary and needing public and activities are shaped by pressures from insti-
media attention, they report their ESG activities tutions such as governments, professional bod-
to society. In contrast, companies’ leaders think ies, and the society surrounding organizations

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Problems and Perspectives in Management, Volume 22, Issue 3, 2024

(DiMaggio & Powell, 1983). Local authorities have friendly operations and projects. According to
policies to encourage the implementation of ESG, Krasodomska et al. (2020), higher education and
and state management agencies have issued docu- professional institutions could make accounting
ments to sanction environmental violations in the curriculums more practical in the contemporary
operation of enterprises. business environment. Nguyen et al. (2019) stated
that accountant qualifications have a favorable im-
Information technology (IT) was the most critical pact on the evolutionary stages of management ac-
driver of organizational innovations and chang- counting practices in Vietnamese firms.
es. IT had taken over the whole firm’s activities
(Granlund & Mouritsen, 2003). IT systems are es- In summary, the prior research results show many
sential for embedding ESG strategies into daily factors influencing ESG reporting. However, re-
business operations and making strategic deci- cent studies in Vietnam mainly focus on determi-
sions. IT architecture driven by its ESG strategy nants affecting ESG information disclosure, such
is the backbone of an organization in facilitating as firm size, profitability, foreign ownership ratio,
measurement, management, and visualization state ownership ratio, board structure, pressure
of strategic and operational processes (Delloite, from stakeholders, operation fields, and develop-
2023). Phornlaphatrachakorn (2019) identified ment opportunities of businesses (Khanh & Tuan,
that information technological innovation influ- 2018; Luc & Phuoc, 2019; Tran & Nguyen, 2021;
ences the successful adoption of strategic man- Nguyet & Hai, 2023). Vietnamese businesses are
agement accounting in Thai organizations. Su et currently learning how to apply ESG, so research
al. (2023) supposed that digital technology is envi- on ESG reporting in Vietnam is still limited.
ronmentally friendly in green development to low-
er energy loss and raise operational effectiveness. Therefore, the purpose of this study is to deter-
mine the factors impacting the readiness for ESG
Companies’ management processes also affect the reporting in Vietnamese companies, providing
readiness for ESG reporting. Suppose the compa- further empirical evidence on sustainability de-
ny has clearly and thoroughly defined and imple- velopment in emerging markets. Based on the rel-
mented the ESG management process, including evant theories and literature review, the following
environmental quality standards, social responsi- hypotheses are proposed:
bility, and data management. Sun and Saat (2023)
found that intelligent manufacturing improves H1: Business executives’ ESG awareness positive-
the quality of the corporate information system ly affects the readiness for ESG reporting.
and ESG practices by saving the data in the safe
data platform, forming electronic copies, and pro- H2: Public media pressure positively affects the
viding them to the data requester. Niu et al. (2022) readiness for ESG reporting.
and Nguyen et al. (2023) empirically found that
ESG management strategies can enhance organi- H3: Women’s participation on management
zational sustainability and reporting. boards positively affects the readiness for
ESG reporting.
Professional accountants significantly minimize
environmental harm and ensure social responsi- H4: Governmental guidelines positively affect the
bility is central to enterprises’ sustainable develop- readiness for ESG reporting.
ment strategies. Manoj and Mini (2022) supposed
that international certificated accountants like H5: Information technology systems positively
Certified Management Accountants (CMAs) play influence the readiness for ESG reporting.
a vital role in the ESG application process since
they can cooperate with experts in diverse fields H6: Management processes positively influence
like technical or legal, given the highly interdisci- the readiness for ESG reporting.
plinary nature of ESG integration. Ramadhan et
al. (2023) also found that accountants play a signif- H7: Accountant qualifications positively influ-
icant role in ensuring more sustainable and eco- ence the readiness for ESG reporting.

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 Problems and Perspectives in Management, Volume 22, Issue 3, 2024

2. METHOD The seven independent variables include execu-

tives’ ESG awareness, public media pressure,
The primary data were collected via a survey using women’s participation in boards, governmen-
questionnaires. This survey aimed to collect infor- tal guidelines, information technology systems,
mation about the opinions of managers and em- management process, and accountant qualifica-
ployees on ESG reporting and the influential factors tions in ESG. The measurement of independent
on the readiness for ESG reporting in Vietnamese variables is provided in Table A1, Appendix A.
companies. A sample size of 169 respondents was To investigate these determinants’ impact on
collected. The sampling method was convenient, uti- ESG reporting readiness, a questionnaire used
lizing an online questionnaire distributed to mem- a five-point Likert scale. The analysis was con-
bers of the board of management, board of directors, ducted using SmartPLS 4 software, encompass-
department managers, accountants, and employees ing two fundamental models: measurement and
working in manufacturing, commercial, and ser- structural. The measurement model, tested in
vice companies in Hanoi and its surrounding areas SmartPLS, aims to uncover relationships be-
through Google Forms. tween the variables. This process involves evalu-
ating the measurement models, considering the
Table 1 describes the sample characteristics such as quality of observed variables, the scale’s reli-
working position, enterprise age, ownership, total as- ability, convergence, and discriminant validity.
sets, and listing status. Out of the 169 respondents in
the survey, 76 individuals (45%) work in the service Based on the theoretical framework and the lit-
sector. Other respondents work in multi-industry, erature review, ESG reporting readiness is mea-
commercial, and manufacturing sectors. Nearly half sured as whether the company has built an ESG
of the survey participants (48.5%) are employed at reporting plan, prepared a budget and tech-
enterprises with assets of over VND 100 billion, of nology information system for ESG reporting,
which most work at unlisted firms (over 82%). regularly paid attention to stakeholders to im-
plement ESG, and reviewed periodically stake-
Table 1. Sample characteristics
holders’ expectations of ESG reporting. In other
Characteristics Frequency Percent
words, the company is ready to show a good un-
Industry
Multi sectors 35 20.7
derstanding of ESG practices and prepare the
Services sector 76 45.0 necessary conditions to enhance ESG reporting.
Manufacturing sector 24 14.2
Commercial sector 34 20.1
Working positions 3. RESULTS
Board of Management 37 21.9
Board of Directors 10 5.9
Employees 55 32.6
This study assesses the scale’s reliability through
Department Managers 67 39.6 Cronbach’s Alpha and composite reliability. As
Firm Age shown in Table 2, the outer loading factors are
Less than ten years 60 35.5 greater than or equal to 0.6, demonstrating the
Ten years or more 109 64.5 observed variables are acceptable (Hair et al.,
Ownership 2014). Next, the results show Cronbach’s Alpha
Non-State-owned 137 81.1
coefficients varying from 0.857 to 0.97 and com-
State-owned 32 18.9
Total Assets
posite reliability coefficients ranging from 0.903
Less than VND 20 billion 53 31.4 to 0.976. The threshold of 0.7 is acceptable for
From VND 20 billion to VND 50 both Cronbach’s Alpha and composite reliabil-
18 10.7
billion ity (Devellis, 2012; Henseler et al., 2015; Bagozzi
From VND 50 billion to VND 100
billion
16 9.5 & Yi, 1988). In addition, the average variance
Above VND 100 billion 82 48.5 extracted (AVE) values of the variables are 0.739,
Listing Status 0.659, 0.75, 0.825, 0.76, 0.76, 0.7, and 0.892, re-
Non listed companies 139 82.2 spectively, which are more than 0.5, indicating
Listed companies 30 17.8 that convergent validity is relevant.
Total 169 100.0

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Problems and Perspectives in Management, Volume 22, Issue 3, 2024

Table 2. Cronbach’s Alpha and composite than all correlations between them (Fornell &
reliability Larcker, 1981). Discriminant validity shows the
Factor Cronbach’s Composite Average Variance degree of non-correlation between an indicator set
Items
loading Alpha Reliability Extracted (AVE) for measuring one concept and an indicator set for
AW – Business executives’ ESG awareness measuring another concept. Table 3 indicates all
AW1 0.831 the distinguishing variables have the square root
AW2 0.882 of AVE higher than the corresponding correlation
AW3 0.821 0.912 0.934 0.739
coefficient.
AW4 0.895
AW5 0.868 Table 3. Discriminant validity test
PR – Public media pressure
PR1 0.759 AC AW ESGR GU IT MP PR WM
PR2 0.846 AC 0.837
PR3 0.857 0.874 0.906 0.659 AW 0.32 0.86
PR4 0.816 ESGR 0.798 0.435 0.944
PR5 0.777 GU 0.217 0.077 0.219 0.908
WM – Women on management boards IT 0.404 0.223 0.48 0.13 0.924
WM1 0.797 MP 0.596 0.406 0.767 0.163 0.29 0.872
WM2 0.878 PR 0.368 0.608 0.432 0.062 0.279 0.36 0.812
WM3 0.891 0.916 0.937 0.75 WM 0.593 0.302 0.724 0.083 0.341 0.55 0.278 0.866
WM4 0.89 Note: AW – Business executives’ ESG awareness; PR – Pub-
WM5 0.869 lic media pressure; WM – Women on management boards;
GU – Governmental guidelines GU – Governmental guidelines; IT – Information technology
GU1 0.947 systems; MP – Management processes; AC – Accountant
qualifications; ESGR – ESG reporting readiness.
GU2 0.862
GU3 0.933
0.957 0.966 0.825 The structural model test begins with the con-
GU4 0.88
sideration of the variance inflation factor (VIF)
GU5 0.919
GU6 0.903
(which should be less than 5), p-values (less than
IT – Information technology systems 0.05), and R-square of every latent variable to con-
IT1 0.888 solidate the prediction of the structural model. As
IT2 0.848 shown in Table 4, the VIF results show that the
IT3 0.915 0.921 0.94 0.76 indicators of the independent variable are all less
IT4 0.828 than 5, so multicollinearity is unlikely to occur.
IT5 0.876 Besides, business executives’ ESG awareness, gov-
MP – Management processes ernmental guidelines, and public media pressure
MP1 0.898
variables have p-values of 0.27, 0.294, and 0.368,
MP2 0.872
MP3 0.855 0.921 0.94 0.76
respectively, which are more significant than 0.05,
MP4 0.88 so the impact of these three variables is insignifi-
MP5 0.852 cant and will not affect ESG reporting readiness.
AC – Accountant qualifications The results show that accountant qualifications,
AC1 0.873 information technology systems, management
AC2 0.859
0.857 0.903 0.7 processes, and women on management boards
AC3 0.886 positively affect ESG reporting readiness, respec-
AC4 0.718
tively; p-values are significant and less than 0.05.
ESG reporting readiness
ESGR1 0.947
ESGR2 0.951 Table 4 shows the original sample results of beta
ESGR3 0.946 0.97 0.976 0.892 values of four variables, accountant qualifications,
ESGR4 0.935 information technology systems, management
ESGR5 0.943 processes, and women on management boards, of
0.355, 0.123, 0.335, and 0.256, respectively. Thus,
It is recommended that differentiation be ensured regarding the impact level from strong to weak
when the square root of the average variance ex- on ESG reporting readiness, the ranking of the
tracted (AVE) for every latent variable is greater above four variables is accountant qualifications,

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Table 4. p-values and original sample results

Path Beta Standard Deviation (STDEV) t-statistics p-values VIF
AC → ESGR 0.355 0.05 7.137 0.000 2.04
AW → ESGR 0.053 0.048 1.104 0.270 1.704
GU → ESGR 0.044 0.041 1.051 0.294 1.062
IT → ESGR 0.123 0.036 3.389 0.001 1.249
MP → ESGR 0.335 0.054 6.235 0.000 1.837
PR → ESGR 0.040 0.044 0.901 0.368 1.704
WM → ESGR 0.256 0.041 6.28 0.000 1.744

Note: R2 = 0.835. AW – Business executives’ ESG awareness; PR – Public media pressure; WM – Women on management
boards; GU – Governmental guidelines; IT – Information technology systems; MP – Management processes; AC – Accountant
qualifications; ESGR – ESG reporting readiness.

management processes, women on management Therefore, ESG reporting and disclosure are not
boards, and information technology systems. The affected by pressure from the public media.
R2 adjusted value is 0.835, so the independent vari-
ables can explain 83.5% of the ESGR’s variability. Third, H3 is accepted. Women’s participation
on management boards positively impacts the
readiness for ESG reporting (p-value = 0.000
4. DISCUSSION less than 0.05). The number of women on the
director and management boards improved the
The study results show that women’s participa- ESG disclosure levels in Vietnamese enterprises.
tion on management boards, information tech- The women’s board participation positively in-
nology systems, management processes, and fluences ESG disclosure since women encour-
accountant qualifications positively affect the age companies to concentrate on sustainability
readiness for ESG reporting. However, business activities and disclosure. In addition, having
executives’ ESG awareness, public media pres- women on the board represents a socially re-
sure, and governmental guidelines have no im- sponsible organization aware of gender diver-
pact on ESG reporting readiness. sity. This finding also confirms that female di-
rectors are positively correlated with the perfor-
First, H1 is rejected. The business executives’ mance of ESG. This result aligns with Bear et al.
ESG awareness does not positively influence the (2010), Kiliç et al. (2015), Arayssi et al. (2016),
readiness for ESG reporting in Vietnam (p-val- and Kamaludin et al. (2022), who highlighted
ue = 0.270 more than 0.05). This outcome con- the influential role of women in boards on the
trasts with Huang et al. (2020), who stated that ESG implementation.
the environmental awareness of the leaders pos-
itively affects the technological innovation of Fourth, H4 is rejected. Governmental guide-
companies. However, these findings agree with lines do not positively affect the readiness for
PwC (2022) that the barriers to implementing ESG reporting in Vietnam (p-value = 0.294
ESG in Vietnam are the lack of knowledge and more than 0.05). Companies do not suppose
government guidance, not the awareness of firm that government guidelines affect ESG report-
leaders. ing in Vietnam. The reason may be that the
Vietnamese government recently promulgated
Second, H2 is rejected. Public media pressure various policies to encourage green projects and
does not affect the readiness for ESG report- a circular economy (Ha, 2023). However, the in-
ing in the surveyed enterprises (p-value = 0.368 terpretation of these guidelines is not fully pro-
more than 0.05). This finding contrasts with vided in practice. This finding could not con-
Buniamin et al. (2018), who found that public firm the research results of Darnall et al. (2022)
media interest increases the engagement lev- and Romito and Vurro (2020), who found that
el of ESG disclosure. Vietnamese companies governmental guidance is a proper framework
might think that ESG information may damage employed by companies to disclose their sus-
them, so they tend not to report it to outsiders. tainability information publicly.

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Problems and Perspectives in Management, Volume 22, Issue 3, 2024

Fifth, H5 is accepted. Information technology ing the positive influence of the management
systems positively influence the readiness for process on ESG.
ESG reporting in Vietnamese enterprises (p-
value = 0.000 less than 0.05). IT systems are Lastly, H7 is accepted (p-value = 0.000 less than
essential for implementing ESG strategies into 0.05). Accountant qualifications in ESG posi-
daily business operations and making decisions. tively influence the readiness for ESG reporting
Information technology systems play a crucial in Vietnam. Accountants are the people who are
role in making ESG more effective and effi- directly involved in preparing ESG reports, so
cient. This finding aligns with Su et al. (2023) they significantly ensure the social responsibili-
and Delloite (2023), indicating that information ty of enterprises’ sustainable development strat-
technology systems play an essential role in or- egies. Internationally certified accountants play
ganizational innovations and changes in ESG. a crucial role in ESG reporting practices since
they can cooperate with foreign experts and in-
Sixth, H6 is accepted. Management processes ternational standards in diverse fields, given the
positively influence the readiness for ESG report- highly interdisciplinary nature of ESG integra-
ing (p-value = 0.000 less than 0.05). Intelligent tion. Moreover, accountants help businesses fol-
manufacturing in production and operation low ESG principles integrated into their finan-
improves the quality of businesses’ information cial reporting. This finding aligns with the con-
environment and ESG performance. This find- clusions drawn by Manoj and Mini (2022) and
ing aligns with the conclusions drawn by Niu et Ramadhan et al. (2023), highlighting accoun-
al. (2022) and Nguyen et al. (2023), underscor- tants’ contribution to ESG reporting.

CONCLUSION
The purpose of this study was to explore the determinants influencing the readiness for ESG report-
ing in Vietnamese enterprises. The study results show that accountant qualifications, management
processes, women on management boards, and information technology systems positively and sig-
nificantly affect ESG reporting readiness in enterprises. First, this study emphasizes how impor-
tant gender diversity is in corporate governance. Increasing women’s involvement on management
boards can foster sustainability initiatives and transparent disclosure practices within organiza-
tions. Second, these findings underscore the critical role of accountants in sustainability reporting
efforts. Therefore, facilitating professional development and training for accountants can signifi-
cantly enhance a company’s preparedness for ESG reporting. Third, the significant influence of in-
formation technology systems and well-defined management processes suggests that Vietnamese
companies should invest more in information technology systems and improve their management
processes to enhance the adoption of ESG reporting. However, this study could not confirm the
relationship between ESG readiness and business executive awareness, public media pressure, and
governmental guidance. Despite the common belief in the critical role of executive awareness and
public media pressure in other countries, this study shows that these two factors do not signifi-
cantly influence ESG reporting readiness in Vietnam.

These findings provide insightful information on the dynamics of ESG reporting readiness within
Vietnamese enterprises. By addressing the critical factors identified in this study, companies can
strengthen their sustainability initiatives, improve transparency, and meet the evolving expecta-
tions of stakeholders and investors in an increasingly ESG-conscious business landscape. However,
this study still has several limitations. First, the survey sample size of 169 companies is relatively
small; there may be differences in ESG reporting practices between small, medium, and large-sized
companies. Second, there may be other internal and external factors influencing ESG reporting in
enterprises. Therefore, future research can expand the survey sample and explore new factors to
obtain more in-depth research results.

270 http://dx.doi.org/10.21511/ppm.22(3).2024.21
 Problems and Perspectives in Management, Volume 22, Issue 3, 2024

AUTHOR CONTRIBUTIONS
Conceptualization: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen, Long Le
Thanh Phan.
Data curation: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen, Long Le
Thanh Phan.
Formal analysis: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen, Long Le
Thanh Phan.
Funding acquisition: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen.
Investigation: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen, Long Le
Thanh Phan.
Methodology: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen.
Project administration: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen,
Long Le Thanh Phan.
Resources: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen.
Software: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen.
Supervision: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen.
Validation: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen, Long Le Thanh
Phan.
Visualization: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen.
Writing – original draft: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen, Anh Thi Mai Nguyen,
Long Le Thanh Phan.
Writing – review & editing: Dung Thi Phuong Nguyen, Lien Thi Huong Nguyen.

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APPENDIX A
Table A1. Measurement of variables and sources of reference
Variables Sources of reference
AW – Business executives’ ESG awareness
AW1. The senior management understood and participated in the ESG implementation process.
AW2. The company has a professional team that implements ESG. Huang et al. (2020),
AW3. The company organizes training courses on ESG implementation for senior leaders. Helfaya et al. (2023)
AW4. Senior management organizes sharing sessions on ESG implementation.
AW5. The senior management is truly determined and fully supports the ESG implementation process.
PR – Public media pressure on ESG
PR1. Media pressure drives the implementation of ESG reporting.
PR2. Shareholder pressure drives the implementation of ESG reporting.
PR3. Local authority/community pressure drives the implementation of ESG reporting. Buniamin et al. (2018)
PR4. Pressure from employees drives the implementation of ESG reporting.
PR5. Pressure from external stakeholders such as customers, suppliers, and banks drives the implementation
of ESG reporting.
WM – Women on management boards
WM1. Women on the Board of Directors or Board of Management pay more attention to the stakeholders’ Bear et al. (2010); Kathy
interests in the company. Rao et al. (2012); Kiliç
WM2. Women on the Board of Directors/Board of Management are more sensitive to environmental et al. (2015); Arayssi et
protection issues. al. (2016); Kamaludin
WM3. Women on the Board of Directors/Board ofManagement are more sensitive to social issues. et al. (2022); Velte
WM4. Women on the Board of Directors/Board of Management, with their personalities and perspectives, (2016); Peng and
contribute to more effective corporate governance. Chandarasupsang
WM5. The increase in the number of women on the Board of Directors/Board of Management helps increase (2023)
the level and effectiveness of ESG disclosure.
GU – Government guidance
GU1. State agencies have issued specific instructions on implementing environmental standards in the field of
business operations.
GU2. State agencies have provided specific instructions on implementing social standards in business Xenitidou and Edmonds
operations. (2014); Darnall et al.
(2022); Helfaya et al.
GU3. State agencies have provided specific instructions on implementing corporate governance standards in
(2023)
business operations.
GU4. Professional associations have specific guidelines for implementing ESG in business operations.
GU5. Local authorities have policies/documents to promote businesses’ implementation of ESG.
GU6. State agencies have issued documents sanctioning environmental violations in business operations.
IT – Information technology systems
IT1. The company has an infrastructure system in place to store and process ESG data.
Granlund and
IT2. The company has software available to support ESG activities.
Mouritsen (2003); Su et
IT3. Software related to corporate governance is updated regularly.
al. (2023)
IT4. The company is implementing/improving automation processes in its production and business activities.
IT5. The company has a cybersecurity system in place to ensure that ESG is implemented.
MP – Management processes
MP1. The company has clearly defined and implemented its ESG process.
MP2. The company has built a set of environmental quality and data management standards. Niu et al. (2022); Sun
MP3. The company has built a set of standards on social responsibility. and Saat (2023)
MP4. The company has built quality standards, and corporate governance is always updated.
MP5. The company has regular meetings to evaluate ESG performance.
AC – Accountant qualifications
AC1. The company’s chief accountant has been trained in ESG. Krasodomska et al.
(2020) ; Manoj and Mini
AC2. Accountants are regularly updated on ESG.
(2022); Ramadhan et al.
AC3. The expertise and skills of the chief accountant are sufficient to support ESG implementation. (2023)
AC4. The chief accountant and accountants hold professional bodies’ certificates.
ESGR – ESG reporting readiness
ESGR1. The company has set initiatives to develop ESG reporting in the future.
ESGR2. The company has prepared the budget for the implementation of ESG reporting.
ESGR3. The company has clearly identified technology applications to implement ESG reporting. Nguyen et al. (2023)
ESGR4. The company has paid attention to the behavior of stakeholders when implementing ESG reporting.
ESGR5. The company has regularly paid attention to the stakeholders’ expectations when developing ESG
reporting.

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