Signaling green! firm ESG signals in an interconnected environment that promote brand valuation

ABSTR A C T Today's interconnected environment is characterized by ESG (environmental, social, and corporate governance), networks of people, organizations, and devices that are continuously interacting, conversing, and exchanging information. These forms of communication indicate that information sharing, signaling, and brand value cre-ation have evolved in the past decade. This study examines brand valuation through two fundamental questions: (1) What ESG achievements do firms share and signal information about? and (2) How do firms share and signal this information in today's interconnected environment? We find that automotive brands signal their ESG achievements in products, people, and a history of financial performance. These brands signal to consumers by communicating advertising spending, research and development investments, social media participation, ESG reputation, and appropriate linguistic styles. Automotive brands can signal ESG information for brand valuation directly and interactively through social media, the latter of which provides evidence of brand value co-creation.

Automated summary

The study demonstrates that automotive brands signal their ESG achievements through products, people, and financial performance history in today's interconnected environment. They also signal to consumers through advertising spending, research and development investments, social media participation, ESG reputation, and appropriate linguistic styles. Automotive brands can communicate ESG information directly and interactively for brand valuation through social media, indicating evidence of brand value co-creation.