As a core professional indicator that defines the sustainable development potential and long-term value of an enterprise, the ESG rating plays an important role in current investment decision-making and enterprise development assessment. However, the ESG rating results of the same company by different rating agencies often differ significantly. In this study, A-share listed companies in China from 2015–2023 are used as the sample to systematically investigate the impact of the divergence of ESG ratings on the financial performance and market performance of firms, and the action mechanism is analyzed on the basis of financing constraint theory, institutional theory and signaling theory. The study reveals that the divergence of ESG ratings significantly inhibits companies’ financial performance and market performance, and this conclusion still holds after a series of stability tests. Mechanistic tests reveal that ESG rating divergence inhibits corporate financial performance and market performance through the triple path of strengthening financing constraints, weakening corporate green technology innovation capability and reducing the quality of information disclosure. Heterogeneity analysis reveals that this negative effect is more prominent among companies in the eastern region, companies in heavily polluting industries, and companies with greater attention from analysts. This study provides not only management inspiration for enterprises to optimize their ESG management system but also a theoretical basis and policy reference for enhancing the sustainable development effectiveness of listed companies and improving ESG ecological governance.
Boyuan Deng (Mon,) studied this question.
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