When Climate Crises Hit, What Do Companies Say?
Why It Matters
Climate-related crises put companies under intense public scrutiny. How they respond, and whether they offer hard facts or vague promises, can shape their reputations and investor trust for years to come.
Key Takeaways
- Firms are 37% more likely to issue climate-related statements on social media after negative climate incidents.
- Past credibility from verified ESG reports influences whether they share hard, verifiable facts or softer, symbolic messages.
- The level of public attention determines whether responses are substantive, symbolic, or both.
Climate Disasters Put Firms on the Spot
When companies are linked to oil spills, emissions breaches, or other environmental damage, the headlines can be brutal. Media coverage amplifies public anger and raises questions from investors, customers, and regulators.
In this heated moment, many firms turn to social media – particularly Twitter – to manage the fallout. Its speed and reach allow them to speak directly to stakeholders, sidestepping the delays of formal reports. But companies face a strategic dilemma: Should they issue hard disclosures (verifiable facts like emissions data) or soft disclosures (aspirational statements and pledges that can’t be independently checked)? Or should they say nothing at all?
The decision is not just about damage control in the moment – it’s shaped by the firm’s history of environmental reporting and the potential costs of making a verifiable claim.
Hard vs. Soft Disclosures – and Why History Matters
This study analysed how companies weigh their options after climate incidents by classifying social media posts into:
- Hard: measurable, verifiable information (e.g. audited carbon emissions data).
- Soft: non-verifiable statements of intent or concern.
- None: no climate-related response.
The researchers found that a firm’s track record matters. Companies that had previously issued ESG (environmental, social and governance) reports, especially those verified by independent assurance, were more likely to respond to climate incidents on Twitter. Assurance was strongly linked to issuing hard disclosures, suggesting that once a company builds a credible, fact-based reputation, it feels compelled to meet that standard under pressure.
However, credibility can also be used as cover. When an incident attracted little public attention, some firms with strong ESG histories issued soft statements instead of hard data, relying on their past reputation to shield them from deeper scrutiny.
Public Attention Shapes the Response
Not all crises are equal in the public eye. The research categorised climate incidents into low-, medium-, and high-influence events based on the level of media and public attention.
- Low-influence incidents: These often prompted soft disclosures, especially from firms with a strong ESG track record. The reputational risk was low enough that symbolic gestures sufficed.
- Medium-influence incidents: These tended to draw hard disclosures – particularly from firms with assured ESG reports – to meet stakeholder expectations for substance.
- High-influence incidents: These triggered a mix of both hard and soft disclosures, as companies sought to cover all bases in a high-pressure environment.
This pattern suggests firms strategically match their disclosure type to the perceived level of reputational risk and the expectations set by their past behaviour.
Tracking Corporate Climate Messaging with AI
To study these patterns, the researchers developed Climate-TwitterBERT, an AI model capable of detecting and classifying climate-related tweets with far greater accuracy than traditional keyword searches.
They began by manually reviewing 12,000 corporate tweets, then used a self-learning keyword discovery algorithm to expand the list of relevant terms and hashtags. Finally, they fine-tuned a BERT-based language model to distinguish between hard, soft, and promotional climate tweets.
The result: a dataset of over 136,000 climate-related tweets from firms between 2007 and 2020, offering unprecedented insight into how companies communicate about climate change in real time.
Business Implications
For corporate leaders, the message is clear: your history of climate disclosure shapes how you can and should respond when crisis strikes. Firms that have built credibility through verified ESG reporting will be held to a higher standard and risk backlash if they respond with vague platitudes during a high-profile incident.
For investors, journalists, and regulators, this research highlights the need to read between the lines. A soft statement from a firm with a history of hard data may be a red flag that it is avoiding verifiable commitments. Conversely, hard disclosures during medium- or high-profile incidents may reflect genuine transparency – or strategic damage control.
In an era of rising climate accountability, stakeholders will need to look beyond whether companies speak up, and focus on how they do so.
Authors and Sources
Authors: Felix Fritsch (University of Mannheim), Qi Zhang (The Chinese University of Hong Kong), Xiang Zheng (Nanyang Technological University)
Original Article: Journal of Accounting Research
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