Environmental disclosure and firm financial performance in Vietnam’s manufacturing and energy sectors

Abstract

This study investigates the environmental disclosure (ED) practices of listed manufacturing and energy firms in Vietnam and examines their relationship with financial performance over the period 2017–2021. Using a mixed-method approach, we first conducted qualitative content analysis to evaluate the extent of ED against the Global Reporting Initiative (GRI) standards and then applied panel regression models to assess its impact on firm performance, proxied by return on assets (ROA) and return on equity (ROE). The findings indicate that ED practices remain relatively limited, with 12% of the 98 sampled firms providing no disclosure during the study period. Manufacturing firms demonstrate stronger reporting practices than those in the energy sector, though overall disclosure levels are modest. The baseline OLS regressions with lagged ED suggest a positive and significant association between disclosure and firm performance. However, this relationship becomes statistically insignificant under stricter firm and year fixed-effects specifications, highlighting the influence of unobserved firm characteristics and contextual factors. These results suggest that while ED is associated with higher performance across firms, it does not consistently translate into within-firm financial gains in Vietnam’s developing institutional environment. The study contributes to the emerging literature on sustainability reporting in developing economies and underscores the need for stronger regulatory frameworks, enhanced reporting culture, and greater integration of sustainability practices into corporate strategy to ensure meaningful financial and governance outcomes.