Economic Implications Associated with Public Perception of Corporate Environmental, Social, and Governance (ESG) Performance

This thesis examines how public perception of a company's Environmental, Social, and Governance (ESG) performance –shaped by external media– affects various facets of company performance. Positive perceptions formed from ESG news enhance financial performance by improving market stability, reducing information asymmetry, and lowering noise trading. These perceptions also lower the risk of stock price crashes. Moreover, when companies greenwash, market participants rely less on company-provided information and more on external ESG news. These findings highlight the importance of external ESG news for financial decision-making and risk management, ultimately benefiting society by promoting sustainable business and investment practices.