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Does ESG narrative specificity mitigate rating disagreement? evidence from ESG reports in China

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Listed:
  • Qian, Ming
  • Wei, Zeyi
  • Bai, Ruobing

Abstract

This study employs natural language processing techniques to measure the specificity of corporate ESG narratives and investigates its impact on ESG rating disagreement. Based on a sample of Chinese listed firms from 2008 to 2022, we find that greater ESG narrative specificity mitigates rating disagreement, and this effect weakens when ESG narratives are short, the firm has experienced ESG incidents, or the quality of financial information is poor. Furthermore, the study reveals that ESG rating disagreement intensifies financial constraints. Our findings offer valuable insights into mitigating ESG rating disagreement and promoting the efficiency of the responsible investment market.

Suggested Citation

  • Qian, Ming & Wei, Zeyi & Bai, Ruobing, 2025. "Does ESG narrative specificity mitigate rating disagreement? evidence from ESG reports in China," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016848
    DOI: 10.1016/j.frl.2025.108430
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    References listed on IDEAS

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