When major customers matter: customer concentration and ESG rating disagreement

The phenomenon of different ESG rating agencies evaluating the same firm’s ESG performance differently has attracted widespread attention. This study examines how customer concentration influences ESG rating disagreement using a sample of Chinese A-share listed companies spanning 2015–2022. Our findings demonstrate that customer concentration significantly increases ESG rating disagreement, with results remaining robust across various robustness tests. Dimensional analysis reveals that customer concentration exhibits a positive correlation with rating disagreements in the social (S) and governance (G) dimensions, while showing no significant relationship with disagreements in the environmental (E) dimension. Through mechanism testing, we identify three mechanisms: the quantity of ESG information disclosures, inventory turnover, and the stability of the top management team. Heterogeneity analysis further demonstrates that customer concentration exerts a more pronounced positive influence on ESG rating disagreement among firms operating in highly competitive industries, companies experiencing low supply and demand deviations, and industries significantly affected by supply chain dynamics. These findings contribute substantively to the literature examining both the role of customer concentration and the determinants of ESG rating disagreement from a supply chain perspective. The insights provided are crucial for understanding the mechanisms that influence sustainable development practices within firms.