Key takeaways
- We develop "Green Score" based on environmental skills required in job postings
- Firms that hire workers with green skills actually reduce emissions
- Firms that merely talk green in reports do not
- Job postings reveal genuine commitment that disclosure cannot fake
- Green Score predicts future environmental performance better than ESG ratings
Why job postings matter
Corporate sustainability reports are cheap talk. Any firm can claim environmental commitment. But hiring decisions are costly. When a firm posts a job requiring environmental engineering skills, it is committing real resources to environmental objectives.
We analyzed millions of job postings to identify which firms are genuinely investing in environmental human capital. Our "Green Score" measures the concentration of green skills required in a firm's job postings.
What we found
Firms with high Green Scores subsequently reduce their carbon emissions. Firms with low Green Scores but high ESG ratings do not. This suggests that ESG ratings capture disclosure quality rather than genuine environmental performance.
The difference is stark: hiring green workers is a credible signal of environmental commitment. Publishing a sustainability report is not.
Implications
Investors seeking genuinely green companies should look beyond sustainability reports and ESG ratings. Job postings offer a window into what firms actually do, not what they say.
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