The Impact of ESG Information in the Supply Chain on Analysts’ Earnings Forecasts

When formulating earnings projections, securities analysts take into account ESG information pertaining to a target firm’s supply‑chain counterparts. This research investigates the informational spillover generated by ESG performance across the supply chain, viewed through the lens of analysts’ earnings forecasts. Our findings indicate that robust ESG performance within the supply chain significantly diminishes analysts’ forecast errors, thereby corroborating a spillover phenomenon. This effect becomes more conspicuous when the focal firm boasts a high proprietary ESG rating, functions as a state‑owned entity, or maintains a separation between the positions of chairman and general manager. Additionally, the spillover impact proves stronger for downstream enterprises relative to upstream ones. A mediation analysis reveals that supply‑chain ESG performance influences forecasts by augmenting corporate information transparency and mitigating operational risks. Collectively, these empirical outcomes extend the literature on ESG consequences and analyst behavior to a supply‑chain setting, offering actionable insights for corporate ESG disclosure and supply‑chain risk‑management decisions.