[Research Contribution] The value relevance of sustainable development disclosure: Evidence from Vietnamese listed companies

Keywords: Sustainable development; Sustainable information disclosure; Corporate value; Listed companies; Investors; Corporate governance; ESG; Information transparency.

"Sustainable development" is increasingly becoming a part of the strategy for many businesses, from commitments to reduce emissions, save energy, to community activities and the disclosure of environmental and social responsibilities. However, amidst the commitments and disclosed information, a noteworthy question arises: does greater transparency in sustainability truly help businesses be valued higher by investors? From this issue, a group of students from the University of Economics Ho Chi Minh City (UEH) conducted a study titled "The value relevance of sustainable development disclosure: Evidence from Vietnamese listed companies", aiming to clarify the relationship between sustainable development information disclosure and corporate value in the context of the Vietnamese market.

In the financial world, a company's value is not merely viewed thru profits or revenue, but also reflects how investors assess the future of a company. A business is considered to have high value when it instills confidence that it can achieve stable growth, good management, and adapt to long-term market changes.

Also for this reason, in recent years, the disclosure of sustainable development information has received increasing attention. These are pieces of information related to the environment, society, and corporate governance, such as carbon emissions, energy use, labor responsibility, or community activities. In the context of sustainable development becoming a global trend, many believe that a company that is more transparent about these factors will also find it easier to gain the trust of investors. But is that really happening in Vietnam? When faced with an investment decision, will investors pay more attention to commitments to sustainable development or still prioritize familiar financial signals such as profit and business efficiency?

So, as more and more businesses talk about sustainable development, does it really make them "more valuable" in the eyes of investors?

What is quite surprising is that the disclosure of sustainable development information has not yet had a clear impact on the value of businesses in Vietnam. In the context of ESG or sustainable development being increasingly mentioned, many people believe that companies that are more transparent about environmental and social issues will be more highly valued by the market. But in reality, it seems that the progress is not happening as quickly as expected. For many investors, information about the environment or social responsibility may have become more noteworthy than before, but it is not strong enough to change the way they perceive the value of a business.

While sustainable commitments are gradually building trust, business performance continues to "speak" more strongly. A business with good profitability often makes investors feel more at ease about its growth potential in the future. This is quite understandable, because before thinking about long-term goals, most investment decisions still start from a very practical question: how well is this business doing?

Beside, not every industry is outside the story of sustainable development. Businesses operating in sectors with significant environmental impact, such as real estate, industry, or basic materials, tend to disclose more information about sustainable development. As the level of impact on society increases, the pressure for transparency from customers, the community, and even investors seems to rise accordingly.

From another perspective, the value of a business sometimes does not only come from profit but also from how the business is managed. Factors related to the board of directors or executive structure also show a certain influence on how the market perceives a company. For investors, a well-organized business often brings a greater sense of stability for long-term expectations.

Mô hình nghiên cứu

When sustainable development is not enough to make a business "more valuable"

If the disclosure of sustainable development information has not yet truly created a clear impact on the value of businesses in Vietnam, perhaps the question is not whether businesses should do it or not, but how to make those efforts more trustworthy and meaningful in the eyes of investors.

First of all, the disclosure of sustainable development information should not stop at merely "talking" but should go further in terms of quality and transparency. Information related to the environment, society, or governance, if it only appears as a small part of the annual report, will be difficult to generate sufficient trust. When businesses take a more proactive approach in sharing the goals, results, or actual impacts of their sustainable development activities, the gap between commitments and market trust can be narrowed.

In addition, in the context where investors still pay much attention to financial performance, sustainable development perhaps needs to go hand in hand with business efficiency rather than becoming two separate stories. A company that both maintains good profitability and demonstrates responsibility toward the environment and society will more easily instill a sense of reassurance in investors about its long-term growth potential.

And perhaps, sustainable development only truly becomes an advantage when it is no longer a "commitment to talk about," but becomes a part of how the business operates and creates value every day.

The research paper has indirectly contributed to SDG 8, 12, 16. View the full research paper “The value relevance of sustainable development disclosure: Evidence from Vietnamese listed companies” HERE

The authors: Tran Quoc Phu, Hoang Thi Nhu Quynh, Le Thi Hoang Anh, Tran Phat - University of Economics Ho Chi Minh City.

This article is part of the Green Research Community series with the message “Research Contribution for UEH Living Lab Green Campus” UEH sincerely invites the community to follow the next Green Research Community newsletter.

More Information:

SDG 8 – Decent Work and Economic Growth focuses on building an inclusive economy that generates quality, fair, and sustainable jobs for all. This is not only about driving GDP growth but also about improving working conditions, expanding opportunities for youth and women, encouraging innovation, and developing businesses that integrate social responsibility.

SDG 12 – Responsible Consumption and Production focuses on ensuring sustainable production and consumption patterns, thereby reducing pressure on natural resources, minimizing waste, and limiting environmental pollution. This goal emphasizes the importance of effective waste management, optimal use of resources, and promoting changes in consumer behavior at both individual and community levels, particularly through education and awareness.

SDG 16 – Peace, Justice, and Strong Institutions centers on building peaceful societies, reducing violence and conflict, and ensuring equal access to justice for all. It also promotes transparent, accountable, and effective institutions that build public trust, thereby strengthening the foundation for sustainable development.

News, photos: UEH Green Campus Project, UEH Youth Union - Student Association, UEH Communications and Partnership Development Department

Voiceover: Thanh Kieu