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How does green news shrink suppliers' ESG rating divergence?

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  • Wang, YaPin
  • Wang, JiDuo

Abstract

This study examines the influence of green news on the divergence of supplier ESG ratings, seeking to fill the gap in comprehension of the media' s involvement in supply chain sustainability. The study employs a two-way fixed effects model analyzing Chinese A-share listed firms from 2015 to 2023, revealing that green news substantially diminishes supplier ESG divergence by improving transparency, aligning stakeholder expectations, and applying normative pressure, with robustness verified through instrumental variable analysis, interactive fixed effects, and exclusion of pandemic-related data. Mechanism testing indicates that green news functions through reputation and disclosure channels: it enhances the target firm' s reputation as a sustainable partner and increases information transparency by revealing ESG plans, so encouraging suppliers to align their practices. Heterogeneity research indicates that positive and neutral green news promote convergence, with neutral news—centered on objective regulatory or industry trends—exerting the most significant influence, whereas negative news fosters divergence by eliciting defensive reactions from suppliers. This research enhances the literature by elucidating the intricate role of media in supply chain ESG dynamics. It offers pragmatic insights for enterprises, regulators, and media to promote industry-wide ESG alignment, thereby achieving global sustainability objectives.

Suggested Citation

  • Wang, YaPin & Wang, JiDuo, 2026. "How does green news shrink suppliers' ESG rating divergence?," Finance Research Letters, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:finlet:v:88:y:2026:i:c:s1544612325024900
    DOI: 10.1016/j.frl.2025.109241
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