Top Management Teams’ Environmental Attention and ESG Rating Divergence: Evidence from China

While Environmental, Social, and Governance (ESG) rating divergence poses a barrier to accurate sustainability measurement and sustainable investment, how internal managerial cognition addresses this external market misalignment remains underexplored. To address the research question of how executive focus shapes market consensus on corporate sustainability, this study integrates the Attention-Based View and Signaling Theory to examine the potential mitigating role of Top Management Team (TMT) environmental attention on ESG rating divergence. Utilizing high-dimensional fixed-effects regressions and textual analysis, we analyze a sample of Chinese A-share non-financial listed firms from 2015 to 2023. Empirical results indicate that a transparent and forthcoming managerial environmental focus helps reduce rating divergence, thereby partially aligning informational baselines. This cognitive alignment can act as an information calibrator, particularly when environmental issues match the firm’s core industry materiality, and this association appears more pronounced in regions with stringent environmental regulations. Robustness checks support the notion that substantive, quantitative sustainability disclosures driven by executive attention assist in alleviating informational misalignment among external rating agencies. These findings offer socio-economic and policy insights for advancing sustainable development, suggesting that regulators could consider encouraging structured sustainability reporting to support the role of executive cognition in standardizing ESG measurements.