Do Consumers Care About ESG? Evidence from Barcode-Level Sales Data

54 Pages Posted: 29 Oct 2022 Last revised: 28 Dec 2023

See all articles by Jean-Marie Meier

Jean-Marie Meier

The Wharton School, University of Pennsylvania; University of Texas at Dallas - Naveen Jindal School of Management

Henri Servaes

London Business School; Centre for Economic Policy Research (CEPR)

Jiaying Wei

Southwestern University of Finance and Economics

Steven Chong Xiao

University of Texas at Dallas - Naveen Jindal School of Management

Date Written: July 31, 2022

Abstract

Using granular barcode-level sales data from retail stores, we show that environmental and social
(E&S) ratings positively relate to local sales, especially in counties with more Democratic-leaning
and higher-income households. Higher ratings of a firm’s product market rivals negatively affect a
firm’s sales. Controlling for product-year-level heterogeneity, monthly product sales decline after
negative firm news on E&S issues. Finally, immediately after major natural and environmental
disasters, sales in counties close to the disasters become more sensitive to E&S ratings. Our study
provides direct evidence that E&S investments affect consumer demand–the cash flow channel of
ESG.

Keywords: Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), Sustainability, Household Finance, Cash Flows, Product Market Competition, Consumption

JEL Classification: D12, G32, G50, M14

Suggested Citation

Meier, Jean-Marie and Servaes, Henri and Wei, Jiaying and Xiao, Steven Chong, Do Consumers Care About ESG? Evidence from Barcode-Level Sales Data (July 31, 2022). European Corporate Governance Institute – Finance Working Paper No. 926/2023, Available at SSRN: https://ssrn.com/abstract=4260716 or http://dx.doi.org/10.2139/ssrn.4260716

Jean-Marie Meier

The Wharton School, University of Pennsylvania ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

HOME PAGE: http://www.jean-mariemeier.com

University of Texas at Dallas - Naveen Jindal School of Management ( email )

Jindal School of Management
800 W. Campbell Road
Richardson, TX 75080
United States

HOME PAGE: http://www.jean-mariemeier.com/

Henri Servaes

London Business School ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom
+44 20 7000 8268 (Phone)
+44 20 7000 8201 (Fax)

HOME PAGE: http://faculty.london.edu/hservaes/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Jiaying Wei

Southwestern University of Finance and Economics ( email )

Chengdu
China

Steven Chong Xiao (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

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