This study investigates whether ESG Social ratings authentically capture employees’ workplace experiences and whether (mis)alignment between these assessments carries financial consequences. Combining employee satisfaction data with ESG Social ratings from multiple rating agencies for publicly listed firms in German-speaking countries, we uncover systematic divergence between internal and external evaluations of social performance. Firms exhibiting greater employee–ESG disagreement earn significantly higher risk-adjusted returns, suggesting that sustainability-related uncertainty may be associated with higher expected returns. By linking employees’ lived experiences to capital-market outcomes, the study positions employee sentiment as a credible indicator of corporate authenticity, legitimacy, and long-term value creation.
