IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i19p8922-d1766790.html
   My bibliography  Save this article

When Authenticity Doesn’t Pay: Validating an ESG Communication Authenticity Framework and Explaining Stakeholder–Investor Decoupling

Author

Listed:
  • Yiu-Fai Chan

    (International Foundation Year, Salford Languages, University of Salford, Maxwell Building, Salford M5 4WT, UK)

  • Lawrence M. Ngoe

    (Business Management and MRes Leadership and Strategy, Greater Manchester Business School, University of Greater Manchester, Great Moor Street, Bolton BL1 1SW, UK)

  • Moshood Olatunde Oladapo

    (School of Leadership, Marketing and Management, Faculty of Business and Law, De Montfort University, Dubai Internet City, Building 12, Dubai 501870, United Arab Emirates)

  • Godswill Osemeke

    (Business Management and MRes Leadership and Strategy, Greater Manchester Business School, University of Greater Manchester, Great Moor Street, Bolton BL1 1SW, UK)

  • Imran Akhtar

    (Business Management and MRes Leadership and Strategy, Greater Manchester Business School, University of Greater Manchester, Great Moor Street, Bolton BL1 1SW, UK)

Abstract

Environmental, Social, and Governance (ESG) communications have proliferated across Fortune 500 companies, yet no validated frameworks exist for systematically distinguishing authentic from superficial positioning. This study develops and validates the Dynamic Authenticity Evaluation Model (DAEM), measuring three interactive dimensions of ESG communication authenticity: operational alignment, temporal consistency, and communication specificity. Through dual-evaluator protocols applied to eight mega-cap companies, DAEM achieves excellent inter-rater reliability (ICC = 0.85; Krippendorff’s α = 0.83). An event study analysis across sixteen major ESG announcements reveals no significant correlation between communication authenticity and abnormal stock returns (r = 0.289; p = 0.491), with effects being bounded below ±0.30% cumulative abnormal returns through equivalence testing. Preliminary stakeholder analysis suggests differential authenticity sensitivity, with employee engagement showing a stronger association with DAEM scores (r = 0.423) than market reactions (r = 0.289). Results indicate that authentic ESG communications influence non-market stakeholders more than short-term stock prices, suggesting that market value creation requires operational rather than symbolic approaches, while authentic communication remains important for stakeholder relationship management.

Suggested Citation

  • Yiu-Fai Chan & Lawrence M. Ngoe & Moshood Olatunde Oladapo & Godswill Osemeke & Imran Akhtar, 2025. "When Authenticity Doesn’t Pay: Validating an ESG Communication Authenticity Framework and Explaining Stakeholder–Investor Decoupling," Sustainability, MDPI, vol. 17(19), pages 1-38, October.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:19:p:8922-:d:1766790
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/19/8922/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/19/8922/
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:19:p:8922-:d:1766790. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.