An Exploratory Study of Sentiment Analysis of ESG Disclosures Related to Water Issues in the Food and Beverage Industry

• In Event: 5.03. CSR/ESG Disclosure

Abstract

Environmental, social, and governance (ESG) issues are becoming more important to consumers, investors, and other users of financial statements as they desire more transparency from companies (Clarkin, Sawyer, & Levin 2020). The Sustainable Accounting Standards Board (SASB) has developed metrics by industry to measure ESG impacts and improve the comparability among companies (Consolandi, Phadke, Hawley, & Eccles 2020). This study examined companies on the 2021 Fortune 500 list in the food and beverage sector and investigated the impact of ESG reporting on companies’ ranking. NVivo software was used to collect data for sentiment analysis regarding water issues disclosed in company ESG reports. Sentiment scores were used as a proxy for the impact of ESG reporting on company rank in the Fortune 500 listing. We find evidence that ESG reporting positively impacts company value as seen by the inverse relationship of sentiment scores and Fortune 500 ranking.

Authors

• Amy Foshee Holmes, Trinity University

• Alexander Feeney, Trinity University