This term is now as we all now in the cultural zeitgeist as it were, and used often to criticise statements or actions by another, usually organisation.
The urban dictionary's first entry is this:
To take a conspicuous but essentially useless action ostensibly to support a good cause but actually to show off how much more moral you are than everybody else.
Fred: I see George has changed his profile picture to show his support for refugees.
Barbara: Has he donated money or time? Is he giving English lessons? Is he making a room available?
Fred: No, no, he's just virtue signalling.
I would say that this example is something that most of us are guilty of, I certainly am - who else would agree? I mean based on this, to avoid virtue signalling we shouldn't really voice any opinion or behaviour with an objection to something if we haven't also taken up some action to make a difference?
There's also the second meaning which is almost the same but involves action based on vanity rather than actual concern with the issue.
Advocating a political or philosophical position, and/or taking up a public cause, from a position of vanity, for the primary purpose of demonstrating your conformity with fashionable pop culture values.
Angela's sudden advocacy for the local pet shelter was mostly an exercise in public relations and virtue signalling. She had never much cared for dogs and cats before, but she instinctively understood teary-eyed public support for defenseless animals generally said something good about her as a person.
This is probably more common, but who's to say a position is based on vanity or not? I suppose in cases of politicians for example staying quiet on pertinent issues until they're in the news is probably a good example.
There's another entry which shows how the term can be abused which is quite common in my opinion:
A term that is far too often used to dismiss an opposing opinion that is based on morals, ethics, or ideals, when the introduction of such into a debate could critically undermine one's stance.
Waldon: "But you CAN'T flatten that building to build a Walmart! Not only is it an orphanage, but the roof is a rare bird sanctuary, it's built over a graveyard AND an aquifer, hosts the only local live music night in the city on Wednesdays, and is a legally protected heritage site!"
Developer: "Don't listen to that virtue signalling hippy, boys, start up them bulldozers, we got a permit!"
It's kind of a shame because too me, all to often it's a crutch people can use to cynically dismiss anyone doing anything for a cause they don't agree with.
In closing, soon I'm having lunch.