A Longitudinal Econometric Model Measuring the Economic Consequences of Performative Sustainability Claims

• Abiodun Okunola

  Ladoke Akintola University Technology

  Author

The proliferation of corporate sustainability disclosures has outpaced the development of econometric tools capable of distinguishing substantive environmental commitment from performative signaling. Prior research documents that greenwashing—the gap between claimed and actual environmental performance—produces short-term market benefits that erode over time , yet no validated longitudinal framework exists for quantifying the economic consequences of performative claims at the firm-year level with sufficient predictive accuracy for regulatory and investment applications. This study addresses that gap by developing a panel econometric model that integrates performative discourse metrics with financial and emissions data to estimate the trajectory of economic outcomes associated with sustainability claim-performance divergence. Using a dataset of publicly listed firms across multiple jurisdictions over a nine-year period, the model achieves 89.4% directional accuracy in predicting subsequent declines in Tobin's Q and increases in idiosyncratic volatility for firms with high performative-claim scores. Feature importance analysis identifies emissions-disclosure divergence, linguistic specificity of commitments, and prior-period ESG rating momentum as dominant predictors. The findings establish that performative sustainability claims function as a depreciating reputational asset: they generate measurable short-term valuation benefits that reverse within 24–36 months. The study contributes a replicable econometric framework for regulators, investors, and researchers seeking to price the economic cost of discursive decoupling in sustainability communication.

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Copyright (c) 2026 Abiodun Okunola (Author)

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