Market-oriented environmental regulation and ESG rating divergence

IF 6.9 2区经济学 Q1 BUSINESS, FINANCE

Research in International Business and Finance Pub Date : 2025-07-01 DOI:10.1016/j.ribaf.2025.103074

Jinlong Zhang , Fengyu Qi , Mingyue Wu

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Abstract

In the context of sustainable development and low-carbon transformation, the divergence of environmental, social, and governance (ESG) ratings heightens investors' perception of market risk and hinders the growth of socially responsible investment. Through a quasi-natural experiment of the carbon market, we empirically investigate the impact of market-based environmental regulations on ESG rating divergence. We find that firms covered by the carbon market reduced their ESG rating divergence by about 3.7 % relative to a control group of other firms, and the dynamic effect of the policy exhibits an inverted U-shape. We reason that media and analyst attention amplifies the signal transmission and external supervision channels, thereby reducing ESG rating divergence. We also find carbon markets mitigate ESG rating divergence among corporations in regions with higher levels of marketization, while administrative order-type environmental regulations are ineffective. Additionally, the carbon market reduces ESG rating divergence for state-owned enterprises, corporations with high political connections, and corporations with high audit quality.

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市场化环境监管与ESG评级分化

在可持续发展和低碳转型的背景下，环境、社会和治理（ESG）评级的分化加剧了投资者对市场风险的感知，阻碍了社会责任投资的增长。通过碳市场的准自然实验，实证研究了市场化环境监管对ESG评级差异的影响。研究发现，被碳市场覆盖的企业的ESG评级差异相对于对照组的其他企业减少了约3.7 %，政策的动态效应呈现倒u形。我们认为，媒体和分析师的关注放大了信号传递和外部监管渠道，从而减少了ESG评级的分歧。在市场化程度较高的地区，碳市场可以缓解企业之间的ESG评级差异，而行政命令型环境法规则无效。此外，碳市场降低了国有企业、高政治关系企业和高审计质量企业的ESG评级差异。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Research in International Business and Finance BUSINESS, FINANCE-

CiteScore

11.20

自引率

9.20%

发文量

240

期刊介绍： Research in International Business and Finance (RIBAF) seeks to consolidate its position as a premier scholarly vehicle of academic finance. The Journal publishes high quality, insightful, well-written papers that explore current and new issues in international finance. Papers that foster dialogue, innovation, and intellectual risk-taking in financial studies; as well as shed light on the interaction between finance and broader societal concerns are particularly appreciated. The Journal welcomes submissions that seek to expand the boundaries of academic finance and otherwise challenge the discipline. Papers studying finance using a variety of methodologies; as well as interdisciplinary studies will be considered for publication. Papers that examine topical issues using extensive international data sets are welcome. Single-country studies can also be considered for publication provided that they develop novel methodological and theoretical approaches or fall within the Journal''s priority themes. It is especially important that single-country studies communicate to the reader why the particular chosen country is especially relevant to the issue being investigated. [...] The scope of topics that are most interesting to RIBAF readers include the following: -Financial markets and institutions -Financial practices and sustainability -The impact of national culture on finance -The impact of formal and informal institutions on finance -Privatizations, public financing, and nonprofit issues in finance -Interdisciplinary financial studies -Finance and international development -International financial crises and regulation -Financialization studies -International financial integration and architecture -Behavioral aspects in finance -Consumer finance -Methodologies and conceptualization issues related to finance