Government and corporate debt markets are rapidly entering the realm of “sustainable finance.” Governments and credit institutions are using green bonds and credit to finance sustainable development efforts. Our commitment to environmental, social, and governance (ESG) has driven the sustainable finance lending market segment to an explosive growth every year. In such a context, the question arises whether this innovation under sustainable credit contracts is important, whether investors can use sovereign sustainable bonds and loans to influence government policy, will there be litigation risks, etc. Are businesses improving their ESG measurement, monitoring, and management, or risk breach of contract and litigation? With comparative, analytical, and synthetic research methods in jurisprudence, the research focuses on Vietnam with many legal regulations and developments related to sustainable financial contract agreements of the parties. The study’s findings show that political and legal constraints make sustainable finance contracts difficult to negotiate and implement, violations may occur, and risk of litigation. This article shows how sovereign sustainable finance will lack credibility and transparency when there are not enough legal documents regulating and a lack of legal structure of ESG obligations to address issues during the loan certification and monitoring phase. The study recommends that organizations continue to conduct deeper research into sustainable financial contracts to mitigate litigation risks. Research is still limited in terms of quantity and case law in Vietnam, partly due to the lack of public data sources.