Eco-social cost unit and corporate sustainability: Evidence from the global oil and gas industry

The sustainability performance of oil and gas companies is increasingly shaped not only by operational efficiency but also by their ability to internalize carbon externalities. This study examines whether Eco-Social Cost Unit (ESCU) Carbon influences corporate sustainability performance, measured using ESG scores, and whether media attention moderates this relationship. Using a global panel of publicly listed oil and gas companies and panel regression models, the results show that ESCU Carbon is positively associated with ESG performance. This finding suggests that the monetization of carbon externalities is interpreted by stakeholders as a signal of environmental governance and corporate accountability rather than merely an indicator of environmental burden. Media attention strengthens this relationship in baseline estimations by increasing the visibility of carbon internalization practices. These findings remain robust across alternative model specifications and endogeneity tests. Theoretically, this study extends signaling and stakeholder perspectives by demonstrating that monetized environmental externalities function as governance signals within ESG evaluation frameworks. Practically, the results highlight that transparent carbon cost internalization can strengthen sustainability credibility and provide investors and ESG evaluators with clearer signals of corporate climate governance in carbon-intensive industries.