When Authenticity Doesn’t Pay: Validating an ESG Communication Authenticity Framework and Explaining Stakeholder–Investor Decoupling
Year: 2025
Type: article
Abstract: Environmental, Social, and Governance (ESG) communications have proliferated across Fortune 500 companies, yet no validated frameworks exist for systematically distinguishing authentic from superficial positioning. This study develops and validates the Dynamic Authenticity Evaluation Model (DAEM), measuring three interactive dimensions of ESG communication authenticity: operational alignment, temporal consistency, and communication specificity. Through dual-evaluator protocols applied to eight mega-cap companies, DAEM achieves excellent inter-rater reliability (ICC = 0.85; Krippendorff’s α = 0.83). An event study analysis across sixteen major ESG announcements reveals no significant correlation between communication authenticity and abnormal stock returns (r = 0.289; p = 0.491), with effects being bounded below ±0.30% cumulative abnormal returns through equivalence testing. Preliminary stakeholder analysis suggests differential authenticity sensitivity, with employee engagement showing a stronger association with DAEM scores (r = 0.423) than market reactions (r = 0.289). Results indicate that authentic ESG communications influence non-market stakeholders more than short-term stock prices, suggesting that market value creation requires operational rather than symbolic approaches, while authentic communication remains important for stakeholder relationship management.
Source: Sustainability
DOI: 10.3390/su17198922
Authors: Yiu-Fai Chan, Lawrence M. Ngoe, Moshood Olatunde Oladapo, Godswill Osemeke, Imran Akhtar
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,896
OpenAlex ID: W4414959724