The purpose of this paper is to evaluate the influence of Environmental, Social and Governance (ESG) discourse on the funding success of a reward-based crowdfunding campaign. Specifically, the funding success of 27,213 reward-crowdfunding campaigns proposed on the French Ulule platform between 2012 and 2018 will be evaluated. The analysis is based on the self-determination and warm-glow theories to assess the impact of projects’ ESG orientation on their success in raising their funding goals.
To achieve our goal, we first identify the ESG discourse in reward-based crowdfunding campaign descriptions, which we measure through a text analysis. We then explore its impact on funding success through Logit and OLS regressions (for robustness, when using another proxy for success). We also disentangle the type of project sponsors, namely individual entrepreneurs, companies and non-profit organizations. Control variables set forth by previous literature as having an impact on crowdfunding success are included in our estimations.
Our results confirm that the presence of an ESG discourse in the campaign’s description has a positive impact on its success. In addition, this positive signaling effect is even stronger for corporate sponsors as compared to individual entrepreneurs or non-profit organizations.
The obtained results contribute to enriching the existing research on the positive signals perceived by contributors during crowdfunding campaigns. Aligning their narratives with ESG values is beneficial for corporate sponsors allowing them to enhance fundraising performance. In addition, we also argue that crowdfunding platforms should consider the advantages of incorporating all components of ESG information to help address the information asymmetries inherent in the crowdfunding financing mechanisms.
We use a singular and exhaustive dataset provided by the Ulule platform allowing to provide more nuanced findings on the relationship between projects’ pro-societal orientation and the campaigns’ success. Our results show that the ESG score has a positive impact on success, but that this relationship is moderated by the project owner. We thus provide a significant contribution to the literature on crowdfunding and sustainable entrepreneurship through a new measure of responsible project orientations and clarify some mixed findings set forth by previous research. To the best of our knowledge, this processing has not been applied to reward-based crowdfunding platforms.
