Detecting Greenwashing in the Environmental, Social, and Governance Domains Using Natural Language Processing

Yue Zhao, Leon Kroher, Maximilian Engler, Klemens Schnattinger

2023

Abstract

Greenwashing, where companies misleadingly project environmental, social, and governance (ESG) virtues, challenges stakeholders. This study examined the link between internal ESG sentiments and public opinion on social media across 12 pharmaceutical firms from 2012 to 2022. Using natural language processing (NLP), we analyzed internal documents and social media. Our findings showed no significant correlation between internal and external sentiment scores, suggesting potential greenwashing if there’s inconsistency in sentiment. This inconsistency can be a red flag for stakeholders like investors and regulators. In response, we propose an NLP-based Q&A system that generates context-specific questions about a company’s ESG performance, offering a potential solution to detect greenwashing. Future research should extend to other industries and additional data sources like financial disclosures.

Paper Citation

in Harvard Style

Zhao Y., Kroher L., Engler M. and Schnattinger K. (2023). Detecting Greenwashing in the Environmental, Social, and Governance Domains Using Natural Language Processing. In Proceedings of the 15th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management - Volume 1: KDIR; ISBN 978-989-758-671-2, SciTePress, pages 175-181. DOI: 10.5220/0012155400003598

in Bibtex Style

@conference{kdir23,
author={Yue Zhao and Leon Kroher and Maximilian Engler and Klemens Schnattinger},
title={Detecting Greenwashing in the Environmental, Social, and Governance Domains Using Natural Language Processing},
booktitle={Proceedings of the 15th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management - Volume 1: KDIR},
year={2023},
pages={175-181},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0012155400003598},
isbn={978-989-758-671-2},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 15th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management - Volume 1: KDIR
TI - Detecting Greenwashing in the Environmental, Social, and Governance Domains Using Natural Language Processing
SN - 978-989-758-671-2
AU - Zhao Y.
AU - Kroher L.
AU - Engler M.
AU - Schnattinger K.
PY - 2023
SP - 175
EP - 181
DO - 10.5220/0012155400003598
PB - SciTePress