Sustainability tweeting triumphs during the COP events : analyzing environmental, social, and governance (ESG) communication on Twitter

El Alfy, Amr and Quigley, John and Tang, Leilei and Al Haririr, Yousseff and Weber, Olaf (2024) Sustainability tweeting triumphs during the COP events : analyzing environmental, social, and governance (ESG) communication on Twitter. Journal of Asia Business Studies. ISSN 1558-7894 (In Press)

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Abstract

Purpose: With the upcoming COP 28 event in the United Arab Emirates, this study delves into the tweeting behavior of firms during COP events. We analyze all ESG tweets throughout COP 26 and COP 27 events, aiming to unravel the intricate connections between social media communication, industry characteristics, and financial performance. Design/methodology/approach: this study adopts a grounded theory approach to gain insights into the ESG and sustainability-focused initiatives undertaken by companies on social media, with a specific focus on the discourse surrounding climate change issues. Employing social media analytics, we conducted an in-depth analysis of ESG-related tweets from S&P 500 firms to discern the nature of their reporting and examine potential correlations with financial performance using the higher Cumulative Abnormal Returns (CARs) model. Findings: Our research findings introduce four novel distinct groups—Unengaged, Catalysts, Cautious, and Shapers—based on firms' proactive or reactive sustainability communication patterns. Our results explore the potential impact of COP event locations on tweeting behavior, proposing that conferences held in different regions, such as Asia versus Europe, may elicit varied reactions from S&P 500 firms. In terms of legitimacy, the study finds no significant differences in tweeting characteristics between industries. However, it uncovers a correlation between firms' CARs and their membership in specific tweeting groups, emphasizing that financial performance is intricately linked to social media communication patterns. The results challenge the simplistic view that higher social media engagement leads to positive financial outcomes, suggesting instead that lower financial performance may drive firms to adopt more extreme communication patterns, possibly as a strategic move to enhance corporate legitimacy.

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