Investor Perception of ESG in Earnings Calls

ABSTRACT This study examines how the communicator's role and the framing of ESG statements affect investor capital allocation in the context of earnings calls. Based on a virtual asset market experiment, the analysis identifies that the assurance and reinforcement of ESG messages have a positive effect of up to 8% on capital allocation, with especially strong effects when the CEO (rather than the CFO) communicates messages in a risk mitigation‐focus (compared to an upside focus) framing. The findings underscore the need to leverage the communication of ESG disclosures and communication in unstructured formats to address investor needs and preferences.