ESG AND SOCIAL MEDIA
FTSE 100 TRENDS
ESG IS MUCH DISCUSSED, WITH COMPANIES ANNOUNCING COMMITMENTS DAILY
But, how is this being expressed in social media? Does positive ESG performance drive positive social media sentiment around corporate reputation?
To assess this, we compiled a data set with all the FTSE 100 companies across the past 12 months, including their social Twitter sentiment around ESG-related, branded conversations, ESG scores (using a combined index following this methodology by CDP and this one by MSCI), and share price movement over the same time period.
WHAT DID WE FIND?
Ultimately, scoring well on ESG does NOT, by itself, lead to positive social sentiment. It is not (at least yet) the main driver of social corporate reputation.
Digging into the nuances within this…
KEY FINDINGS FROM OUR ANALYSIS
- ESG is a relatively small part of social discussion around FTSE100 companies – ESG-related Twitter conversations (only) made up <5% of overall branded mentions in the past 12 months across the FTSE 100. In fact, the volume of news articles talking about ESG was x3 times bigger than the Twitter conversation.
- Trading performance matters more than ESG – companies with strong share price performance (e.g. SEGRO, Coca-Cola) see the strongest social sentiment
- As social sentiment does correlate strongly with trading performance, we conclude that profit warnings, dividend announcements, and the likes remain the key drivers for social sentiment
- Activation matters when it comes to ESG & reputation – looking at a subset of the “most talked about” FTSE 100 companies when it comes to ESG, we found that their social sentiment actually DOES correlate with their ESG performance. We tentatively conclude that unless brands hit a certain threshold of conversation around your ESG efforts (whether that is organic or stimulated), you won’t see any positive effects for social sentiment. Therefore, the most effective strategy in practice will be to build a strong ESG proposition/ stand AND then activate it
- Poor ESG performance doesn’t drive poor social reputation – ESG and social sentiment don’t correlate positively, but we also haven’t found the inverse. From that, we take two things
- You can’t fake it – poor ESG performance can’t be (or isn’t) translated to positive chatter
- Equally, limited ESG performance isn’t a significant source of social media malcontent
OK, SO WHO?
The relatively small audience of those discussing, and seeing said discussions, are in relatively dense networks of activists, and the politically-engaged. These conversations, whilst visible to those searching for a company’s reputation, are not readily visible to networks of consumers, nor to institutional audiences.
WHAT COMES NEXT?
Want to know more? Get in touch – [email protected]