Who cares about ESG?

Abstract

We investigate the ESG-related social media and trading activities of a large sample of retail investors. We find that after COP21, investors significantly increased both their ESG-related social media activities and their ESG investments. The increase in portfolios’ ESG ratings correlates with climate change concerns expressed in the media. Overall, posts with ESG content receive more likes, and investors who post about ESG also have portfolios with a higher investment-weighted ESG rating. We do not find evidence of investors’ outperformance or underperformance with an emphasis on stocks with high ESG ratings.