Non-technical summary: Does social corporate interaction affect sustainability performance?
Ongoing research
Jörg Stahl, Research Associate at CSF
Panagiotis Couzoff, Universidade Católica Portuguesa
March 2026
Many contributions in sociology emphasize the importance of social capital. On the corporate level, social networks can alleviate the challenges of informational frictions and agency issues. Indeed, extant literature shows that social interaction can facilitate business activity and improve economic outcomes.
A related, yet understudied, question is whether corporate social interaction can have an impact on firms’ environmental and sustainability behavior. In this project, we study this question by focusing on the environmental, social, and governance (ESG) performance.
Our conjecture is that corporate interaction on an international level should be of particular importance for ESG scores. The level of scores varies substantially by regions and countries. Notably, U.S. firms are lagging many of their European peers mainly due to differences in regulation.
We hypothesize that large business events, where business leaders meet and learn from best practices and experience peer pressure, impact firms’ sustainability policies. Arguably one of the largest such business events is the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland. Many of its around 3,000 participants are global leaders in business and politics.
In our project, we use participation in the WEF as a proxy for high-level networking. We construct a dataset of public firms from North America and Europe that attended the WEF between 2013 and 2023. We compare ESG scores before and after participation and use a matched control group of similar non-participating firms.
Our results show that firms’ ESG scores increase after attending the WEF, confirming that social interaction among business leaders can shape corporate sustainability behavior. However, this effect is not uniform across regions. The overall increase in ESG scores is entirely driven by U.S. firms.
The findings suggest that contact with international business partners may hence act as a substitute for less stringent regulations or investor pressure when it comes to sustainability behavior of firms. Still, given some well-documented issues with the ESG scores, in a next step, we aim to analyze environmental outcome measures that differ from the ESG performance. The objective will be to determine whether firms merely improve their ESG scores or whether corporate social interaction positively affects firms’ sustainability behavior on a more general level.
Cover image: Willian Justen de Vasconcellos/ Unsplash
