Do This If You Want Businesses To Reduce Their Energy Use
Imagine you are trying to study for a massive final exam. When your teachers and parents praise your hard work, you feel motivated, you focus better, and you get more done in less time. But when everyone is criticizing you, you might panic, spend all your time trying to defend yourself, and ultimately study less efficiently.
Believe it or not, massive, multi-million-dollar corporations react to the media in a very similar way.
As climate change and environmental protection become some of the most critical issues of our time, the way companies use energy is under a massive global microscope. But we know many companies walk a fine line when it comes to being green.
We know that excessive energy consumption leads to environmental pollution, speeds up climate change, and creates risks for our global energy security. But what actually motivates a company to clean up its act and use energy more efficiently?
A 2026 study published in the International Review of Economics and Finance looked at Chinese companies from 2008 to 2022 to figure out how the tone of news articles—whether the media is praising or criticizing a company—actually changes how that company consumes energy.
The study doesn't just look at how much total energy a company uses. Instead, it looks at Energy Consumption Intensity (ECI).
What is ECI? It is a measure of energy production efficiency. Specifically, it is calculated as the ratio of a company's total output (their operating revenue) to their total energy consumption.
If a company has a high energy production efficiency, it means they have a low energy consumption intensity. Lowering ECI means a company is getting more bang for its buck. They are producing the same amount (or more) of goods while using less energy.
Praise Works Better Than Criticism
You might think that if the media writes a scathing, negative article about a company's terrible environmental practices, the company would immediately fix the problem. Surprisingly, the research shows the exact opposite. In fact many companies are now greenhushing, or are not sharing their successes because they are worried about being judged.
Positive ESG media sentiment reduces a company's Energy Consumption Intensity. Negative ESG media sentiment actually increases a company's Energy Consumption Intensity.
The researchers found that for every one standard deviation increase in positive ESG media sentiment, a company's energy consumption intensity decreased by an average of 18.74% relative to its mean. Conversely, a one standard deviation increase in negative media sentiment caused ECI to increase by an average of 11.88% relative to its mean.
How Media Changes Corporate Behavior
The researchers discovered that media sentiment changes corporate energy use through a chain reaction involving three main factors: Corporate Reputation, Financing Constraints, and Green Innovation.
Corporate Reputation
Reputation is basically how the outside world views a company's reliability and social responsibility.
When the news is positive: Good media coverage boosts a company's reputation. A strong reputation acts as a valuable, rare resource. Because the company looks great to the public, they can attract high-quality employees who care about the environment and are more likely to practice energy-saving habits at work. Better reputation directly leads to better energy efficiency.
When the news is negative:Bad news destroys public trust and triggers a reputation risk. When a company is facing a reputation crisis, the executives stop thinking about long-term energy-saving goals. Instead, they panic and spend all their limited resources on short-term crisis management to save their public image. Energy efficiency gets completely left behind.
Financing Constraints
Upgrading factories to be energy-efficient costs a massive amount of money. Companies usually have to borrow this money from banks or investors.
When the news is positive: Good ESG news signals to investors that the company is low-risk and high-quality. This makes investors happy, which lowers the cost of borrowing money. With these relaxed "financing constraints," the company can easily get the financial support they need to invest in clean energy technology and green transformation.
When the news is negative: When a company is drowning in negative press, banks get scared. They tighten their credit conditions, and investors demand higher risk premiums, making it incredibly expensive for the company to borrow money. Because they are squeezed for cash, the company simply cannot afford to buy advanced energy-saving equipment or fund long-term renovation projects.
Green Innovation
Green innovation means inventing or buying new, eco-friendly technologies. This requires a lot of time, money, and a willingness to take risks.
When the news is positive: Positive media coverage gives management the confidence and strategic support they need to commit to green practices. Because they have the money and the reputation, they invest heavily in clean energy and emission-reduction innovations. This new technology directly optimizes how they use energy, bringing their ECI down.
When the news is negative: Because green innovation takes a long time and is risky, executives facing a media firestorm become terrified of taking risks. They slash their research and development budgets and cancel or delay their green innovation projects. Without these technological upgrades, the company is stuck using old, inefficient methods, and their energy consumption intensity goes up. Unfortunately many companies are faking their net-zero claims.
When Does Media Sentiment Matter the Most?
The researchers didn't stop there. They wanted to know if this rule applied to every company equally. They found that the impact of media sentiment is much stronger under specific conditions.
It Matters More for "Cleaner" Companies
You might assume that heavily polluting industries (like coal mining or massive chemical plants) would care the most about media coverage. Surprisingly, the media has a much bigger impact on non-heavily polluting companies.
Heavily polluting companies already face massive, strict pressures from government regulators. They are already doing the bare minimum to survive legally, so they focus mostly on economic survival and are somewhat numb to media sentiment.
Non-heavily polluting companies, on the other hand, care deeply about their public image. Positive news allows them to stand out and attract resources, so they lean into it and reduce their ECI. Negative news hits them harder because they aren't used to it, causing them to panic and lose focus on energy management.
It Matters More When the Boss is a "Rookie" at Environmentalism
The researchers looked at the backgrounds of the top executives. They found that media sentiment causes bigger swings in energy use when a company is run by executives who do not have an environmental background. We have also learned that the shape of an executive’s face shapes their environmental actions.
Executives who have a history in environmental work already have a built-in awareness and a solid game plan for sustainable development. They stay the course regardless of what the news says.
But executives without this background lack a strong internal compass for environmental policy. They are much more sensitive to outside opinions. If the media praises them, they double down. If the media criticizes them, they completely derail their energy strategies.
It Matters More in Regions with Strict Rules
Finally, the researchers looked at where the companies were located. They found that in areas with very strict environmental regulations, the media's impact is supercharged. Sadly many states in the U.S. are pulling back on their environmental regulations.
In strict areas, survival means obeying the rules. When a company gets positive press in a strict area, it solidifies their status as a "good guy," motivating them to invest even more in saving energy.
However, if a company gets negative press in a strict area, the pressure is immense. The cost of just trying to comply with the strict government rules uses up all their money, which crowds out their ability to invest in actual green innovation. The combination of strict government rules plus negative media completely paralyzes their ability to improve.
Real-World Solutions
So, if positive news helps the environment and negative news accidentally hurts it, what should we do? The researchers lay out three major policy recommendations for the future.Build an AI-Powered Media Monitoring System
The government and financial organizations should team up to build a national platform that monitors ESG media sentiment.
By using artificial intelligence, cloud computing, and the Internet of Things, this platform could capture news data in real-time and create dynamic "sentiment maps".
AI could then predict how a company's energy use might change based on the news, allowing policymakers to act before things get worse. But let’s not forget about the impacts of AI and data centers on the environment.
Teach the Media to be Constructive
Since we know that praising companies actually results in better environmental outcomes, the government should work with the media to encourage positive, constructive reporting.
Journalists should be trained on how positive ESG coverage actually drives energy improvements.
When the media does have to report negative news, there should be guidelines requiring them to also follow up on how the company is trying to fix the problem. This shifts the news from just "attacking" a company to providing "constructive supervision," which prevents the company from going into full panic mode.
Reward Good Press with Green Money
We know that greenwashing is making financing more expensive. Banks and the government should create "green financial incentives" that are directly tied to media sentiment.
If a company is getting great, authoritative ESG news coverage, banks should reward them with lower interest rates on green loans.
Companies could even issue special "green bonds" where the financial payout is linked to their annual ESG media sentiment score.
Furthermore, if a company has an executive team with no environmental experience, but they are getting positive press and lowering their energy use, the government should offer them subsidies to pay for professional environmental training.
