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Predictive insights: leveraging Twitter sentiments and machine learning for environmental, social and governance controversy prediction

Journal of Computational Social Science (2023)Cite this article

Abstract

This research introduces an innovative approach that utilizes machine learning to forecast Environmental, Social, and Governance (ESG) controversies within corporations, based on public opinions expressed on Twitter. Drawing on the theoretical foundations of legitimacy theory and stakeholder theory, the proposed methodology emphasizes the essential role of stakeholder engagement in effectively managing ESG risks and promoting sustainable business practices. Through the examination of eight machine-learning algorithms, the research showcases the accurate forecasting of ESG controversies, specifically achieving a remarkable overall F1-Score of 80% by LightGBM. The findings underscore the significant contribution of machine learning models and social media analytics in ESG risk management and controversy mitigation. Companies can anticipate potential controversies and proactively improve their Corporate Social Responsibility practices by actively monitoring public sentiments, especially on social media platforms. Analyzing positive sentiments as indicators of successful practices and negative sentiments as potential areas of concern further enhances their legitimacy and foster stakeholder engagement.

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Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

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Authors and Affiliations

  1. Sciences de Gestion, Institut de Recherche en Gestion des Organisations (IRGO), Université de Bordeaux, 35 Avenue Abadie, 33072, Bordeaux, France

    Yasemin Lheureux

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  1. Yasemin Lheureux
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Correspondence to Yasemin Lheureux.

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Appendices

Appendix

Comprehensive data set description

Variable

Variable definition

Data type

 

Variable group

Having Controversy

Target Variable

Boolean

 

ESG Controversy

Neg Ratio (Negative)

Predictor Variable

Ratio—Numerical

 

Twitter Sentiment Result

Pos Ratio (Positive)

Predictor Variable

Ratio—Numerical

 

Twitter Sentiment Result

Neu Ratio (Neutral)

Predictor Variable

Ratio—Numerical

 

Twitter Sentiment Result

ESG Score

Predictor Variable

Numerical

 

ESG Metrics

Social Pillar Score

Predictor Variable

Numerical

 

ESG Metrics

Governance Pillar Score

Predictor Variable

Numerical

 

ESG Metrics

Environmental Pillar Score

Predictor Variable

Numerical

 

ESG Metrics

Resource Use Score

Predictor Variable

Numerical

 

ESG Metrics

Emissions Score

Predictor Variable

Numerical

 

ESG Metrics

Environmental Innovation Score

Predictor Variable

Numerical

 

ESG Metrics

Workforce Score

Predictor Variable

Numerical

 

ESG Metrics

Human Rights Score

Predictor Variable

Numerical

 

ESG Metrics

Community Score

Predictor Variable

Numerical

 

ESG Metrics

Product Responsibility Score

Predictor Variable

Numerical

 

ESG Metrics

Management Score

Predictor Variable

Numerical

 

ESG Metrics

Shareholders Score

Predictor Variable

Numerical

 

ESG Metrics

CSR Strategy Score

Predictor Variable

Numerical

 

ESG Metrics

Basic Materials

Predictor Variable

Boolean

 

GICS sector

Consumer Cyclicals

Predictor Variable

Boolean

 

GICS sector

Consumer Non-Cyclicals

Predictor Variable

Boolean

 

GICS sector

Energy

Predictor Variable

Boolean

 

GICS sector

Financials

Predictor Variable

Boolean

 

GICS sector

Healthcare

Predictor Variable

Boolean

 

GICS sector

Industrials

Predictor Variable

Boolean

 

GICS sector

Technology

Predictor Variable

Boolean

 

GICS sector

Utilities

Predictor Variable

Boolean

 

GICS sector

Location of Headquarters

Predictor Variable

Boolean

 

Location of Headquarters

Market Cap USD

Predictor Variable

Numerical

 

Financial Data

Total Debt USD

Predictor Variable

Numerical

 

Financial Data

Total Assets USD

Predictor Variable

Numerical

 

Financial Data

Common Shareholder Equity USD

Predictor Variable

Numerical

 

Financial Data

ROA

Predictor Variable

Ratio—Numerical

 

Financial Data

ROE

Predictor Variable

Ratio—Numerical

 

Financial Data

Dividend Per Share Yield

Predictor Variable

Ratio—Numerical

 

Financial Data

Annual Return

Predictor Variable

Ratio—Numerical

 

Stock Exchange Data

Change Volume

Predictor Variable

Ratio—Numerical

 

Stock Exchange Data

High-Low Return

Predictor Variable

Ratio—Numerical

 

Stock Exchange Data

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Lheureux, Y. Predictive insights: leveraging Twitter sentiments and machine learning for environmental, social and governance controversy prediction. J Comput Soc Sc (2023). https://doi.org/10.1007/s42001-023-00228-5

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