Russian business leaders speaking out on the Ukraine invasion as a litmus test of a firm’s ESG

Purpose This paper aims to investigate whether Russian firms with better environmental, social and governance (ESG) rankings are more likely to have business leaders who speak out and raise concerns about a dramatic social shock – the Russia–Ukraine war. Design/methodology/approach Using a sample of Russian-listed firms, a cross-sectional Heckprobit model is used to investigate the association between a firm’s ESG ranking and Russian business leaders’ sociopolitical activism, controlling for the potential selection bias that might result from the rating agency’s decision to cover specific firms. Findings This study shows that a firm’s better ESG rankings are associated with a greater likelihood of business leaders speaking out and raising concerns about the Russia–Ukraine war, even after controlling for occidental board representation, state ownership, and potential selection bias. This finding is mainly driven by the environmental and social dimensions of a firm’s ESG ranking rather than the governance dimension. Originality/value This study advances the understanding of business leaders’ activism on controversial social, political and environmental issues. It theorizes and provides evidence that an extreme institutional context, such as the Russian context during the Russia–Ukraine War, can trigger stakeholder-enlarged stewardship behaviors. The study also provides useful insights for business leaders, investors and other corporate stakeholders who rely on a firm’s ESG ranking to assess actual responsible corporate behavior.