How Do Consumers Use ESG Disclosure? Evidence from a Randomized Field Experiment with Everyday Product Purchases

Abstract

We combine a large-scale field experiment with a customized survey to study how consumers use and respond to ESG disclosure. In a sample of over 24,000 U.S. households, we first establish that while consumers moderately prefer to purchase from ESG-responsible firms, they rarely consult corporate reporting directly and face various frictions in learning about firm-level activities. In our field experiment, we then inform households about real firm-disclosed activities through several randomized information treatments. Consumers increase their purchase intent when exogenously presented with positive signals about environmental, social, and—to a lesser extent—governance activities. Full ESG reports increase purchase intentions only for consumers who choose to view them. After the experiment, consumers increase their actual purchases, but these effects are small, short-lived, and only materialize for social signals and viewed ESG reports. Through a follow-up survey, we provide explanations for why consumers (do not) change their behavior after our experiment.