Sustainability Reporting Awards and Market Reaction: The Sustainability Awareness of Investors on the Vietnam Stock Market

In recent years, the global emphasis on sustainable business practices has grown, driven by the urgent need to address environmental and social challenges such as climate change, resource depletion, and inequality. This shift has intensified demands from stakeholders for greater corporate transparency and accountability, leading to the widespread adoption of sustainability reporting to demonstrate organizational commitment to sustainability. In Vietnam, the Sustainability Reporting Award (SRA), launched in 2013 by the stock market regulator and key stakeholders, seeks to enhance the quality of sustainability reporting. Using an event study methodology, this research investigates the impact of the SRA on market reactions in the Vietnamese stock market between 2013 and 2022. The findings reveal that award-winning companies achieve significantly higher average abnormal returns, particularly within the 5 days following the announcement, reflecting a strong positive market response. However, this effect diminishes post-COVID-19, underscoring the pandemic's influence on market dynamics. The study supports signaling theory by demonstrating that sustainability awards act as credible signals of a firm's commitment to sustainable practices, thereby strengthening investor confidence. These results underscore the strategic value of sustainability initiatives for firms and offer actionable insights for policymakers aiming to promote sustainability reporting and drive sustainable growth.