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Firm-Level Drivers of Esg-rating divergence
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Autores
Orientador(es)
Resumo(s)
Despite their undeniable relevance for both the academic and business sphere,
ESG-ratings have been proven to be diverging. This can lead to consequences on capital
allocation, investment behavior, volatility in stock returns, the use of ESG-ratings and
trust in ESG data while increasing the risk of greenwashing. This research examines the
impact of firm size, financial profitability and average ESG-performance of firms on the
extent of ESG-rating disagreement in order to provide further insight into firm-level
drivers of ESG-rating divergence. The aim of this research is not to fully explain rating
divergence, but rather to identify firm-level drivers as the starting point for further
analysis. Using OLS regression analyses of panel data, the divergence of Bloomberg and
Refinitiv scores was evaluated for the overall ESG-score as well as for every pillar
dimension. Firstly, the data provides evidence on the existence of ESG-rating divergence.
The findings indicate a significant reducing impact of financial profitability on the extent
of disagreement. Higher rating divergence is especially associated with greater firm size
within the social pillar. For the overall ESG-score even a reduction of disagreement is
related to higher firm size whereas rating agency specific effects of Bloomberg and
Refinitiv cannot be completely out ruled. Average ESG-performance in the current and
previous period shows an increasing impact on rating divergence. The analyses underline
the necessity of an increase in transparency of rating agencies’ methodologies to generate
a more profound understanding of their differences and conduct more targeted analyses.
Moreover, the results underline the need for standardization in definition and disclosure
of ESG data.
Descrição
MASTER ACCOUNTING
Palavras-chave
Corporate Sustainability Divergence ESG ESG-Ratings Rating Disagreement
Contexto Educativo
Citação
Rumes, Larissa Jeanine (2025). “Firm-Level Drivers of Esg-rating divergence”. Dissertação de Mestrado. Universidade de Lisboa. Instituto Superior de Economia e Gestão
Editora
Instituto Superior de Economia e Gestão