Do Consumers Care About ESG? Evidence from Barcode-Level Sales Data

Do Consumers Care About ESG? Evidence from Barcode-Level Sales Data

Jean-Marie Meier, Henri Servaes, Jiaying Wei, Steven Chong Xiao

Series number :

Serial Number: 
926/2023

Date posted :

July 26 2023

Last revised :

December 26 2023
SSRN Share

Keywords

  • Environmental • 
  • Social • 
  • and Governance (ESG) • 
  • corporate social responsibility (CSR) • 
  • Sustainability • 
  • household finance • 
  • Cash Flows • 
  • product market competition • 
  • Consumption

Using granular barcode-level sales data from retail stores, we show that environmental and social (E&S) ratings positively relate to local sales, especially in counties with more Democratic-leaning and higher-income households. Higher ratings of a firm’s product market rivals negatively affect a firm’s sales.

Controlling for product-year-level heterogeneity, monthly product sales decline after negative firm news on E&S issues. Finally, immediately after major natural and environmental disasters, sales in counties close to the disasters become more sensitive to E&S ratings. Our study provides direct evidence that E&S investments affect consumer demand–the cash flow channel of ESG.

Authors

Real name:
Steven Chong Xiao
Real name:
Jean-Marie Meier
Real name:
Jiaying Wei