ESG sentiments and divergent ESG scores: suggesting a framework for ESG rating

Ajithakumari Vijayappan Nair Biju (), Snehith Jacob Kodiyatt, P. P. Nithi Krishna and Geetha Sreelekshmi
Additional contact information
Ajithakumari Vijayappan Nair Biju: University of Kerala
Snehith Jacob Kodiyatt: ESG Analyst, Intellect Design Arena Ltd
P. P. Nithi Krishna: University of Kerala
Geetha Sreelekshmi: University of Kerala

SN Business & Economics, 2023, vol. 3, issue 12, 1-21

Abstract: Abstract The disclosure of fake corporate green claims, commonly termed corporate greenwashing, coupled with the rapid rise of numerous Environmental, Social, and Governance (ESG) rating providers (ERPs), has led to inconsistent or contradictory ratings, resulting in uncertainty and ambiguity over corporate ESG performance and, finally, a biased investment. Therefore, to address the divergent methodologies, we examine the intensity of ESG, greenwashing, and rating inconsistencies using a triangulation approach, considering both theoretical and qualitative methods. We perform sentiment analysis, a qualitative method, on the tweet data on “ESG” and “greenwashing” using MAXQDA software. The results suggest a linear relationship between the sentiments towards ESG and greenwashing, i.e., greenwashing is significantly growing at the rate of ESG. This paper also examines the divergent methodologies and biased ratings that encompass actions that exaggerate and misrepresent ‘green’ credentials and the factors leading to them. The results of our sentiment analysis find that the movement between ESG and greenwashing has been positively correlated, which means people are still doubtful regarding the ESG disclosures of corporations. With the insights derived from the theoretical analysis, this paper suggests a framework of potential regulations to build a realistic ESG market in India, which has a nascent ESG market with plenty of scope for adaptation.

Keywords: ESG; Greenwashing; Sentiments analysis; ESG rating; ERP; MAXQDA (search for similar items in EconPapers)
JEL-codes: G15 G3 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43546-023-00592-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:snbeco:v:3:y:2023:i:12:d:10.1007_s43546-023-00592-4

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-023-00592-4

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().