Quantitative ESG disclosure and divergence of ESG ratings

Liu, Min

doi:10.3389/fpsyg.2022.936798

Cited by 28 publications

(17 citation statements)

References 41 publications

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“…ESG rating divergence was found to be positively connected with ESG disclosure of rated units by Christensen et al [ 4 ], meaning that the more information, the higher the rating divergence. This is also confirmed by Lium [ 5 ], who thinks that more significant ESG rating variance will result from non-standardized quantitative disclosure, particularly from the disclosure of environmental and social issues.Regarding the study of the economic effects of ESG rating divergence, Dimson E [ 6 ] thinks that ESG ratings can assist investors in making informed investment decisions and that investors can choose companies and build investment portfolios based on ESG investment indices. The concept of ESG rating discrepancy was confirmed by Doron Avramovdeng [ 7 ] using data from six rating agencies.…”

Section: Introductionsupporting

confidence: 58%

“…Or do the principles we once adhered to have changed? Under such pressure, the management will review the development idea, review the corporate strategy, and give more consideration to green investment initiatives that align with the ESG score concept and add value to the business [8]. However, because of the divergence, there will be less trust in the veracity of the enterprise information, and external stakeholders will question whether the ESG information is overstated and whether the stock price spillover phenomenon is real.…”

Section: Theoretical Basis and Research Hypothesesmentioning

confidence: 99%

“…Therefore, the results are displayed in Table 4's columns 7-8 in order to remove the interference caused by external shock occurrences. Green innovation activities do virtual variable (GPcitationdumm/GPcitation), (5) based on the quantity and quality of green innovation data characteristics, there will be no green innovation an application for a patent for invention and cited the enterprise from zero, there will be a green invention patents and patent cited times greater than 5 green enterprise take 1, The Probit model is used for the regression test, and Table 5's columns 1-2 display the outcomes.…”

Section: Robustness Testmentioning

confidence: 99%

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The short board effect of ESG rating and corporate green innovation activities

Zhu,

Xu,

Sun

2024

PLoS ONE

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This article aims to investigate whether differences in ESG ratings have an impact on corporate green innovation behavior. A high-order fixed effects model was established using panel data from Chinese companies from 2009 to 2022 to empirically test the impact of ESG rating divergence in the Chinese market on corporate green innovation behavior.The study demonstrates that ESG rating disparity raises the quantity but lowers the quality of businesses’ green innovation efforts because of the short board effect. After a series of robustness tests, the results are still valid.The mechanism investigation reveals that both an external pressure channel and an internal strategy adjustment channel are responsible for the impact of ESG rating disparity on green innovation efforts. The asymmetry of corporate green innovation activities is exacerbated by managers’ self-interest, whereas the asymmetry of green innovation is mitigated by the caliber of government. According to the heterogeneity analysis, the divergence of a business’s ESG rating between large-scale, non-heavy polluting, and places with strong environmental regulations can effectively slow down the asymmetric behavior of enterprise innovation activities. Additional investigation reveals that the phenomenon of ESG rating divergence spreads across industries and geographical areas. The short board effect of ESG rating divergence can be effectively mitigated by improving the quality of enterprise information disclosure and speeding up the digital transformation of businesses. The research conclusion provides marginal contributions on how to improve China’s ESG rating system and how enterprises can identify ESG rating differences and make scientific decisions.

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Section: Introductionsupporting

confidence: 58%

Section: Theoretical Basis and Research Hypothesesmentioning

confidence: 99%

Section: Robustness Testmentioning

confidence: 99%

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The short board effect of ESG rating and corporate green innovation activities

Zhu,

Xu,

Sun

2024

PLoS ONE

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“…Although the development of the ESG rating system in China occurred later than in Western and developed countries and the advanced techniques of ESG evaluation abroad can be utilized, the divergence of ESG rating agencies still exists. Min Liu analyzed the ESG rating data of Chinese A-share-listed companies based on SynTao Green Finance, Sino-Securities Index CASVI, WIND ESG, FTSE Russell, and Rankins (six Chinese ESG rating agencies) and found that the six rating agencies had a low correlation, although quantitative disclosure could reduce the disagreements between the rating systems [43]. The basic question "which indicators or measures are the best" is not easy to answer, as they still lack uniform definitions and evaluation criteria [38].…”

Section: Application Of Esg In Corporate Sustainabilitymentioning

confidence: 99%

A Sustainable Development Evaluation Framework for Chinese Electricity Enterprises Based on SDG and ESG Coupling

Dong,

Shao,

Xin

et al. 2023

Sustainability

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In 2021, China’s power generation industry took the lead in launching carbon emissions trading, ushering in a major challenge and opportunity for the sustainable development of power enterprises. Assessing the sustainable development performance of power enterprises has become the key to the sustainable financing and development of power enterprises in this new developmental stage. Based on the integration of the long-term UN Sustainable Development Goals (SDGs) and the ESG (Environmental, Social, and Governance) evaluation indicators of listed companies, this paper constructed an index system for the evaluation of the sustainable development of electric power companies consisting of 75 indicators corresponding to four dimensions: economic, social, environmental, and governance. Given the vision for the sustainable development of electric power companies, the assessment thresholds for each indicator were determined by the practical exploration and typical progress assessment of SDGs. Aggregate assessment and dashboard assessment techniques for the sustainable development of electric power companies were established, and we conducted a robustness analysis of the evaluation system. The results revealed the following details: (1) The disclosure of sustainable development indicators of Chinese electricity enterprises was 94.13%, among which the four dimensions of economy, environment, society, and governance were 99.89%, 82.62%, 94.00%, and 97.71%, respectively. (2) The aggregate sustainable development index for Chinese power companies was 59.34, and the environment, society, governance, and economic scores were 62.10, 64.49, 76.79, and 41.37, respectively. (3) Based on the results of the dashboard, investment in innovation, public welfare, emissions of greenhouse gases, and economic sustainability are the key factors limiting the achievement of sustainable development. (4) The framework’s robustness analysis showed that the results of the evaluation of this paper’s indicator framework fell within a reasonable range of variation using different ranking and weighting systems. Chinese electricity companies should comprehensively control costs and expenses, strengthen capital management, expand funding channels, focus on enhancing R&D capabilities, enhance their scientific and technological innovation management systems, and improve their disclosure of information about greenhouse gas emissions, resource consumption and use, and employee issues to improve the overall level of sustainable development. The evaluation system developed in this paper further enriches the evaluation of corporate sustainability performance. This paper explored the application of the SDG index and dashboard construction methods at the national level to the evaluation of sustainability at the corporate level, providing a clear picture of corporate performance with respect to various dimensions, issues, criteria, and indicators.

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“…In the current conditions, the number of variations in the ESG assessment and application methods is significantly increasing, which generates a lot of disputes and disagreements (Liu, 2022). The classification given here tries to generalize the existing Russian and world experience of using ESG.…”

Section: Gb1 Corruption Levelthis Criterion Represents the Percentage...mentioning

confidence: 99%

Green economy and esg in russia: project evaluation criteria, risk analysis and management methods

Tolkachev

Kotov

Chelukhina

et al. 2023

SDJ

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Objective: The purpose of the article is to develop an effective approach to rating Russian companies and financial instruments based on ESG factors, which makes it easier to promote the sustainable development concept in Russia and contributes to the implementation and financing of "green" projects. Methods: The article examines the role and place of the ESG agenda at the present stage of economic and social development. Authors used methods of synthesis, analysis, classification and systematization of information. Results: The main provisions formulated by scientists and practitioners from all over the world are summarized. The list of criteria characterizing the company, society and the state in terms of compliance with the principles of sustainable development is highlighted. The author's weights distribution model of the described characteristics is proposed in order to form parametric systems for evaluating issuers for compliance with ESG criteria. The international and Russian experience of rating "green" projects is analyzed, and options for improving Russian practice are proposed. The list of risks inherent in the "green" financial instruments issues is highlighted. Conclusion: Particular attention is paid to the impossibility of all factors comprehensive consideration by an individual investor, in connection with which the idea is put forward about the expediency of using innovative technologies, such as neural networks, for rating issues of "green" financial instruments and issuers themselves, in order to facilitate the investor's asset selection process. General conclusions are drawn about the state and prospects of the sustainability market in the world and in Russia, recommendations are given to the investors.

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Quantitative ESG disclosure and divergence of ESG ratings

Cited by 28 publications

References 41 publications

The short board effect of ESG rating and corporate green innovation activities

The short board effect of ESG rating and corporate green innovation activities

A Sustainable Development Evaluation Framework for Chinese Electricity Enterprises Based on SDG and ESG Coupling

Green economy and esg in russia: project evaluation criteria, risk analysis and management methods

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