The Value of NGOs in ESG

We examine whether and how NGOs create value in the ESG space. Our laboratory are NGO allegations about misleading or false corporate E&S claims. NGO campaigns target large, visible firms in the consumer-facing or oil and gas industry. The campaigns predominantly aim at corporate statements on how firms impact climate change, consumer health, or waste. Stocks react with negative announcement returns to NGO campaigns, especially when the alleged behavior concerns financially-material topics; negative media reporting also rises. NGO campaigns have real effects: Firms criticized for climate-related claims reduce future carbon emissions, in part because the campaigns catalyze investor engagement.

Keywords: NGOs, ESG, Sustainability, E&S-Washing, GHG Emissions

JEL Classification: L31, M40, M41, M48, Q50, Q51

Suggested Citation: Suggested Citation

Brendel, Janja and Chen, Cai and Keusch, Thomas and Sautner, Zacharias, The Value of NGOs in ESG (May 27, 2024). INSEAD Working Paper No. 2024/57/ACC, Swiss Finance Institute Research Paper No. 24-35, Available at SSRN: https://ssrn.com/abstract=4758829 or http://dx.doi.org/10.2139/ssrn.4758829