Is COVID-19 Related Anxiety an Accelerator for Responsible and Sustainable Investing ? A Sentiment Analysis

Abstract

The excessive volatility generated by the COVID-19 pandemic highlights that environmental and social issues are potential elements that businesses and governments must manage effectively and swiftly. This study seeks to test whether the rising anxiety over this pandemic has affected the attitudes and choices towards environmentally and socially responsible investing. To this end, we first use machine learning tools to examine tweets related to this unprecedented and wild shock. Second, we compare the impact of these sentiments on the stock performance of companies from the S&P500 that meet environmental and social sustainability criteria for three COVID-19 phases with varying levels of anxiety, which we label incubation, fever and the increasing risk of second wave pandemic (in the absence of vaccine). Our findings reveal that the increasing uncertainty and worries over COVID-19 and its consequences has not distracted investors' attention away from environmental and social issues, but companies with responsible strategies on environmental issues that specifically address climate responsibility are likely to be more responsive to sentiments at the current situation of emergency.

Is COVID-19 anticipating the future? Evidence from investors’ sustainable orientation

“…The present analysis adds to the literature on the stock market response to economic downturns (Ashraf, 2020;Nofsinger and Varma, 2014;and Wu et al, 2017), concentrating on the sustainability market and the less-explored fields of sustainable indexes and the COVID-19 pandemic (Chiappini et al, 2021;Döttling & Kim, 2020;Selmi et al, 2021).…”

“…Chiappini et al ( 2021 ), focusing on Europe and the USA, found that sustainable indexes were negatively affected by lockdown orders—though they did not report any statistically significant different atypical returns compared to traditional indexes. Selmi et al ( 2021 ) examined whether increased anxiety over COVID-19 affected attitudes and behaviors with respect to environmentally and socially responsible investing. Using machine learning sentiment analysis, they found that increased uncertainty and worry during the emergency period did not distract investors’ attention away from environmental and social issues, and firms that proactively engaged with responsible strategies towards environmental issues tended to be more reactive to sentiments related to the consequences of the pandemic.…”

“…Recently, researchers have examined the financial implications of the initial phase of COVID-19: Döttling and Kim ( 2020 ) showed how funds with the highest sustainability ratings experienced sharper declines in flow, while Chiappini et al ( 2021 ) found that sustainable and non-sustainable assets performed a similar bear phase. Some positive insights emerged from Selmi et al ( 2021 ), who demonstrated an interesting positive linkage between COVID-related anxiety and an acceleration in sustainable investments. These results suggest that “charting the green path” after the pandemic may be a non-trivial task (Mukanjari & Sterner, 2020 ), and that more efforts are needed to shed light on the attractiveness of such investments to support a sustainable future.…”

Pemilihan Metode dan Algoritma dalam Analisis Sentimen di Media Sosial : Sistematic Literature Review

“…Seperti halnya studi kasus sektor pariwisata di masa pandemi Covid-19 menjadi populer dikaji berdasarkan analisis sentimen di media sosial pada tahun 2020-2021 [146]. Dinamika interaksi antar pengguna media sosial dinilai representatif sehingga menjadi data yang penting untuk dianalisis sebagai rekomendasi pengembangan ekonomi [147], [148]. Hal ini menunjukkan bahwa ruang lingkup pembahasan atau studi kasus tentang analisis sentimen di media sosial perlu diidentifikasi dari waktu ke waktu.…”

Resilience of Environmental and Social Stocks under Stress: Lessons from the COVID‐19 Pandemic

“…Only vague parallels can be drawn with natural disasters, as nothing comparable has ever occurred except for the 1918 influenza pandemic in the distant past. Some scholars started examining whether ESG engagement is a resiliency factor during and following the Covid crisis (Albuquerque et al., 2020 ; Ding et al., 2020 ; Selmi et al., 2021 ; Umar & Gubareva, 2021 ).…”