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Determinants for ESG Adoption in the Banking Industry: Implications for Policy and Practice

In: Innovating Finance for a Sustainable Future Integrating FinTech, Blockchain and Generative AI

Author

Listed:
  • Wissem Ajili Ben Youssef
  • Najla Bouebdallah
  • Thuy Phong Nguyen

Abstract

This study investigates the key factors influencing the adoption of Environmental, Social, and Governance (ESG) principles within Vietnam’s banking sector, with a particular focus on identifying the primary drivers and barriers to ESG integration. Employing a quantitative research design, data were collected via structured questionnaires administered to 300 banking professionals engaged in ESG-related roles. Structural Equation Modeling (SEM) using AMOS was utilized for data analysis. The findings reveal that ESG adoption is positively associated with several organizational and external factors, including CEO awareness, transformational leadership, a shared green vision, environmental corporate social responsibility (CSR), and supportive government policies. Moreover, ESG integration is shown to enhance banks’ market reputation and contribute to both sustainable development and improved organizational performance. Key enablers of ESG adoption include organizational innovation, effective management processes, and regulatory support. Based on these insights, the study offers practical recommendations to accelerate ESG adoption in Vietnam’s banking industry. These include strengthening leadership capabilities, increasing ESG awareness among executives, and implementing more robust regulatory frameworks to foster sustainable finance.

Suggested Citation

  • Wissem Ajili Ben Youssef & Najla Bouebdallah & Thuy Phong Nguyen, 2026. "Determinants for ESG Adoption in the Banking Industry: Implications for Policy and Practice," World Scientific Book Chapters, in: Wissem Ajili Ben Youssef & Najla Bouebdallah (ed.), Innovating Finance for a Sustainable Future Integrating FinTech, Blockchain and Generative AI, chapter 2, pages 29-63, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9781800618572_0002
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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