Disruptive Innovation on ESG : Evidence from Blockchain Exposure in Conference Calls

I study whether US public firms signaling blockchain technology in their conference calls can receive better ESG ratings from third party agencies. By using a self-created blockchain keywords dictionary, my empirical studies show blockchain firms including blockchain adoption firms as well as blockchain speculative firms can both benefit from their blockchain disclosure behavior, with around more than 3 points increment for their environment ratings. Specifically, they receive better ratings when their energy consumption is lower, and their original information environment is poorer. The better transparency of firm level information flow improved by blockchain technology helps external stakeholders to better evaluate firms’ ESG performance while ESG rating agencies who evaluate firms mainly based on disclosure information can also be cheated by purely blockchain exposure behavior. Additionally, the blockchain exposure can also contribute to social ratings, as one of the main pillars of ESG. My results are still significant when I use Google users’ explosive increase of blockchain search as a sudden public attention on blockchain applications. Collectively, my findings indicate it is encouraged to develop disruptive innovation such as blockchain to deal with our global climate change challenges and the positive impact of many blockchain application scenarios outweighs the negative consequence of potential concerns such as cryptocurrency mining