Does Environmental, Social, Governance Media Coverage Influence the Breadth of Ownership?

This study investigates whether and how environmental, social, and governance (ESG) media coverage affects shareholders' investment decision. We find that ESG media coverage increases the number of both majority and minority investors, and that this positive association is more pronounced for minority shareholders than majority shareholders. The findings are robust to alternative research designs with the inclusion of either ESG performance (i.e., ESG ratings) or the issuance of sustainability reports, abnormal ESG media coverage, and two-stage least squares regression. Overall, these results support the informational role of ESG media coverage in capital markets under agenda-setting theory.