Practical Applications of ESG and Alternative Data: Capturing Corporates’ Sustainability-Related Activities with Job Postings

Abstract

In <b><i>ESG and Alternative Data: Capturing Corporates’ Sustainability-Related Activities with Job Postings</i></b>, from the Winter 2022 issue of <i>The Journal of Financial Data Science</i>, <b>Arik Ben Dor, Jingling Guan, Adam Kelleher, Adam Lauretig, Ryan Preclaw,</b> and <b>Xiaming Zeng</b>, all at <b>Barclays</b>, find that ESG job posting data can serve as a leading indicator of future changes in firms’ ESG ratings. Firms with higher posting intensity were more likely to experience subsequent ESG rating improvements and they enjoyed better stock performance in the two to three years following the posting date. The authors also find statistically significant alphas in multifactor models for a particular type of long–short strategy based on ESG hiring interests. Using fuzzy matching and other natural language processing techniques to match job posting data with S&amp;P 400 and S&amp;P 500 companies, the authors determine the extent of ESG hiring interests among these companies.