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Article

Information Content Measurement of ESG Factors via Entropy and Its Impact on Society and Security

1
Research Institute for Energy Management and Planning (RIEMP), University of Tehran, No. 9, Ghods St., Enghelab St., Tehran 1417466191, Iran
2
Department of Economics & Business, Saint Anselm College, Saint Anselm Drive 100, Manchester, NH 03102, USA
3
Statistics and Computer Sciences, School of Mathematics, University of Tehran, Tehran 1417935840, Iran
*
Author to whom correspondence should be addressed.
Academic Editor: Willy Susilo
Received: 15 August 2021 / Revised: 12 September 2021 / Accepted: 17 September 2021 / Published: 23 September 2021
(This article belongs to the Special Issue Data Modeling and Predictive Analytics)
We conducted a singular and sectoral vulnerability assessment of ESG factors of Dow-30-listed companies by applying the entropy weight method and analyzing each ESG factor’s information contribution to the overall ESG disclosure score. By reducing information entropy information, weaknesses in the structure of a socio-technological system can be identified and improved. The relative information gain of each indicator improves proportionally to the reduction in entropy. The social pillar contains the most crucial information, followed by the environmental and governance pillars, relative to each other. The difference between the social and economic pillars was found to be statistically not significant, while the differences between the social pillar, respective to the economic and governance pillars were statistically significant. This suggests noisy information content of the governance pillar, indicating improvement potential in governance messaging. Moreover, we found that companies with lean and flexible governance structures are more likely to convey information content better. We also discuss the impact of ESG measures on society and security. View Full-Text
Keywords: applied systems analysis; socio-technological systems; entropy; ESG; sustainability; society and security applied systems analysis; socio-technological systems; entropy; ESG; sustainability; society and security
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MDPI and ACS Style

Hassani, H.; Unger, S.; Entezarian, M.R. Information Content Measurement of ESG Factors via Entropy and Its Impact on Society and Security. Information 2021, 12, 391. https://0-doi-org.brum.beds.ac.uk/10.3390/info12100391

AMA Style

Hassani H, Unger S, Entezarian MR. Information Content Measurement of ESG Factors via Entropy and Its Impact on Society and Security. Information. 2021; 12(10):391. https://0-doi-org.brum.beds.ac.uk/10.3390/info12100391

Chicago/Turabian Style

Hassani, Hossein, Stephan Unger, and Mohammad R. Entezarian 2021. "Information Content Measurement of ESG Factors via Entropy and Its Impact on Society and Security" Information 12, no. 10: 391. https://0-doi-org.brum.beds.ac.uk/10.3390/info12100391

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