The impact of environment, social, and governance factors on employee commitment of commercial banks in Vietnam: The mediation effect of employee motivation

Abstract

Environmental, Social, and Governance (ESG) issues today have a profound impact on various aspects of businesses. This research paper explores the relationship between each ESG dimension, including Environmental, Social, and Governance, and employee commitment in Vietnam’s commercial banks. The paper further examines the mediation effect of employee motivation on the relationship between ESG and employee commitment. An online questionnaire survey was administered to employees of 21 commercial banks in Vietnam, yielding a dataset of 411 responses. The collected data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4.1. The study proposes that the environmental and governance dimensions of ESG have a positive impact on employee commitment, with p-values of 0.000. Additionally, employee motivation serves as a complementary mediator in the relationship between the environmental dimension and normative commitment (p-value 0.000), as well as in the relationship between the governance dimension and both affective commitment and normative commitment (p-value 0.000). However, the social dimension of ESG does not have a direct impact on employee commitment (p-values ranging from 0.069 to 0.219). Furthermore, employee motivation functions as an indirect-only mediator in the relationship between the social dimension of ESG and employee commitment (p-value 0.000). Besides, employee commitment does not moderate the relationship between the environmental dimension and affective commitment (p-value 0.053), the environmental dimension and continuance commitment (p-value 0.134), or the governance dimension on continuance commitment (p-value 0.078). The findings provide valuable insights into ESG practices for fostering employee commitment by enhancing employee motivation in Vietnamese commercial banks.