Stock market reactions to adverse ESG disclosure via media channels

Jin Boon Wong, Qin Zhang

Research output: Contribution to journalArticlepeer-review

27 Citations (Scopus)


This study examines the value relevance of corporate reputation risks (CRR) from adverse media coverage of environmental, social and governance (ESG) issues on stock performance at the firm level. Empirical results advance signalling theory and resource-based view by providing evidence that corporate reputation is considered a valuable intangible asset by investors and adverse ESG disclosure via media channels have a significant and negative impact on firm valuation. The research is extended using various factors and indicates that heightened CRR have a substantially negative corollary effect on stock price of smaller and less liquid firms that are typically not S&P500 constituents. Further analysis using industry classifications reveals that stock performance of companies in the ‘sin’ triumvirate (i.e., alcohol, tobacco, and gaming) is not significantly affected by negative ESG media coverage. Instead, firms in candy & soda, steel works, banking, and insurance industries are the most susceptible to investors’ repercussion from undesirable media spotlight. These findings provide new insights and indicate that beyond the type and delivery method of ESG disclosures, firm characteristics, corporate reputation status and industry explain differences in investors’ reaction to ‘bad’ news.
Original languageEnglish
Article number101045
Pages (from-to)1-20
Number of pages20
JournalBritish Accounting Review
Issue number1
Early online date15 Sep 2021
Publication statusPublished - Jan 2022


  • Corporate reputation
  • ESG
  • CSR
  • signalling
  • information asymmetry
  • market behaviour


Dive into the research topics of 'Stock market reactions to adverse ESG disclosure via media channels'. Together they form a unique fingerprint.

Cite this