The Determinants Of Esg Ratings Disagreement – Evidence From China

This study examines ESG rating disagreement among Chinese A-share listed firms using data from five major ESG rating agencies between 2010 and 2019. We construct three measures of rating divergence and analyze how firm characteristics influence these differences. Our findings reveal that the significance of explanatory variables varies depending on the definition of ESG disagreement and the combination of ratings used. While some variables, such as state ownership and profitability, show inconsistent effects, others, like firm size, leverage, and innovation activity, consistently influence ESG rating divergence. Our study provides valuable insights for regulators, investors, and researchers seeking to improve the reliability and comparability of ESG assessments and contributes to the development of more stable and transparent ESG evaluation framework.