To mitigate risk, should companies signal a broad range of environmental, social, and governance (ESG) initiatives or instead focus on only a few ESG issues? Drawing on signaling theory, we propose that a broad array of ESG initiatives generates not only signal consistency but also accelerating signal costs. Our empirical results support the resultant hypothesis of a curvilinear relationship between ESG scope and equity risk. In addition, this U-shaped curve seems to become steeper when firms face multiple media-reported ESG controversies. Overall, our study qualifies the conventional wisdom that firms can reduce equity risk by attending to a wide variety of stakeholders and highlights the moderating (signal-amplifying) impact of the firm’s media environment.

为了降低风险，公司是否应该发出广泛的环境、社会和治理 (ESG) 计划信号，还是只关注少数 ESG 问题？借鉴信号理论，我们提出一系列广泛的 ESG 举措不仅会产生信号一致性，还会加速信号成本。我们的实证结果支持 ESG 范围与股权风险之间存在曲线关系的假设。此外，当公司面临多个媒体报道的 ESG 争议时，这条 U 形曲线似乎变得更陡峭。总体而言，我们的研究证实了公司可以通过关注各种利益相关者来降低股权风险的传统观点，并强调了公司媒体环境的调节（信号放大）影响。