Timing Differences in ESG Ratings’ Recognition of Quantity and Quality Signals in Green Patents

Whether ESG rating agencies can distinguish the quantity from the quality of green patents, and whether the two are recognized at different points in time, remains an open question. This article decomposes green patents into applications (quantity), authorization (certification quality) and citations (market influence), and uses panel data of China’s A-share listed companies from 2010 to 2024 to examine the time series structure of its impact on ESG ratings. We find that the quantitative signal is immediate—patent applications significantly and consistently boost ESG ratings—while the qualitative signal is significantly lagging: patent citations are not positively related during the same period (the common sample estimate is significantly negative), and their impact only turns positive and reaches a peak in the second lag period, conveying significantly more information than the quantitative signal. This “quantity is immediate, quality-lagged” model still holds true under nonlinear settings and a series of robustness tests. The root cause is the delay in the inclusion of citation information by rating agencies. The results show that ESG ratings use the time dimension to distinguish quantitative expansion and quality improvement in green patents, which provides a possible information basis for identifying “greenwashing” behavior and improving rating information processing.