The role of the media in socially responsible investing

Purpose - This study aims to understand how media content and media sentiment in corporate social responsibility (CSR) news coverage affect investment performance, as reflected in the S&P 500 Environmental and Socially Responsible Index from 2010 to 2016. Design/methodology/approach - Computer-assisted content analysis and sentiment analysis are employed to analyze 818 CSR-related newspaper articles from mainstream newspapers. Autoregressive model is used to comprehend socially responsible investment (SRI) performance. Findings - This study reveals the impact of media content and media sentiment of CSR-related news articles on SRI. The authors' findings indicate that such topics as recognition of a company's CSR contributions in CSR-related news articles are positively associated with SRI performance, whereas topics such as tax avoidance and environmental protection show a negative relationship with SRI performance. In addition, this study contributes to the authors' understanding of framing bias in investment by confirming a significant positive association between an uncertain or constraining media sentiment and SRI performance, as well as a negative relationship between a litigious sentiment and SRI performance. Originality/value - There has been limited attention to examining the effect of media coverage of CSR on the financial market. Since SRI is one of the most useful financial indices for SRIs, it is meaningful to explore the relationship between media coverage of CSR and SRI. To fill the research gap, this study specifically examines how media coverage of CSR-related issues is associated with SRI performance.