Environmental sustainability has become a strategic priority as organizations face increasing pressure to reduce environmental impacts while maintaining long-term competitiveness. Environmental, Social, and Governance (ESG) practices provide an integrated framework for promoting sustainable environmental management through resource conservation, pollution prevention, environmental compliance, and responsible governance. This study investigates the relationship between ESG practices and firm performance by examining the mediating role of corporate reputation. Drawing on stakeholder theory, signaling theory, and the resource-based view, the study proposes that ESG practices enhance organizational performance by strengthening corporate reputation. Using a cross-sectional survey, data were collected from 280 managers of Vietnamese listed firms and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that ESG practices positively influence corporate reputation and firm performance, while corporate reputation partially mediates the ESG–firm performance relationship. The results highlight that environmentally responsible ESG initiatives strengthen stakeholder trust, improve organizational legitimacy, and encourage sustainable resource management. This study contributes to the environmental sustainability literature by demonstrating how ESG practices create both environmental and organizational value, providing practical implications for managers and policymakers seeking to advance sustainable business development in emerging economies.
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