Look at ME, what do WE see? Drivers of online ESG sentiment

Purpose – Institutional pressures can drive firms to adopt environmental, social and governance (ESG) practices, which makes the evaluation of ESG performance relevant. Additionally, extant literature debates the difference between the “perception” and the “reality” of such assessments. Our study aims to explore the firmrelated drivers of online perceptions of corporate ESG behavior. Design/methodology/approach – We develop a set of hypotheses regarding firm-related drivers of online ESG sentiment. Our key argument is that these drivers reflect online perceptions of firms’ commitment to ESG, which are potentially shaped by stakeholder pressure online. We test our hypotheses on a panel of 113 firms across 16 countries using multivariate statistical mixed modeling. Findings – In line with our hypotheses, firm size and profitability negatively affect online ESG sentiment. In contrast, board size positively affects online ESG sentiment, with a value above which the relationship ceases to be significant. We find no significant relationship with board gender diversity. Practical implications – Online ESG sentiment should be considered a potential input to shape corporate purposes and ESG practices. Furthermore, firms should be aware that external actors’ discourse and interactions online can affect their image and reputation. Originality/value – This study investigates online ESG sentiment and its potential drivers, thereby contributing to the ESG literature. Investigating online ESG sentiment by leveraging social movement theory represents a promising avenue for gaining insights into its causal constituents.