We examine whether and how media coverage of firms' environment, social, and governance (ESG) incidents is associated with analyst coverage and forecasts. We propound that the risks of firms could either increase or decrease as a result of media-covered ESG incidents, depending on the firms' actions on the media coverage, and thus its impact on analyst coverage and forecasts would vary. Based on a sample of U.S. listed companies, we find evidence that the level of analyst coverage is negatively associated with a firm's ESG incidents covered by the media. This association is more pronounced for firms with more intense industrial product market competition, more severe ESG scandals, or coverage by less sophisticated analysts. We also find that the firms' ESG incidents covered by the media would lead to higher levels of forecast error and dispersion. Our mediation analysis further reveals that business risk and information risk tend to be higher for firms covered by the media for having been involved in ESG incidents, thereby explaining why the analysts' coverage and forecasts for these firms are adversely affected. Overall, our results highlight the importance of curbing corporate social irresponsibility and improving analyst performance in forecasting.

中文翻译：

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媒体对公司环境、社会和治理 (ESG) 事件的报道是否会影响分析师的报道和预测？风险视角

我们研究媒体对公司环境、社会和治理 (ESG) 事件的报道是否以及如何与分析师的报道和预测相关。我们认为，媒体报道的 ESG 事件可能会导致企业的风险增加或减少，具体取决于企业对媒体报道的行为，因此对分析师报道和预测的影响也会有所不同。根据美国上市公司的样本，我们发现有证据表明分析师的报道水平与媒体报道的公司 ESG 事件呈负相关。对于工业产品市场竞争更激烈、ESG 丑闻更严重或分析师报道水平较低的公司来说，这种关联更为明显。我们还发现，媒体报道的公司 ESG 事件会导致更高水平的预测误差和离散度。我们的中介分析进一步揭示，因参与 ESG 事件而被媒体报道的公司的商业风险和信息风险往往更高，从而解释了为什么分析师对这些公司的报道和预测受到不利影响。总体而言，我们的结果凸显了遏制企业社会不负责任和提高分析师预测绩效的重要性。