Abstract:
The development of digital technology has transformed the way information is produced. Does it improve information transparency and enhance the consistency of judgments regarding corporate ESG performance, or does it provide technical tools for selective disclosure that widen ESG rating divergence? Using a sample of A-share listed companies on the Shanghai and Shenzhen stock exchanges, this study finds that digital technology significantly intensifies ESG rating divergence among firms. The first underlying mechanism is that digital technology has given rise to low-cost, broad-coverage online information release channels, enabling firms to strategically disclose curated positive information and aspirational commitments while concealing or downplaying negative events, controversial indicators, and material risks. The second mechanism is that digital technology increases the volume of ESG information disclosure, leading to compounded "information noise" and the dilution of valid information, which causes different rating agencies to develop interpretive biases and divergent judgments amid vast quantities of fragmented information. Heterogeneity analysis indicates that the effect of digital technology in intensifying ESG rating divergence is more pronounced for firms that are heavily polluting, have lower levels of digitalization, exhibit lower environmental concern, and receive less analyst attention. This paper provides empirical evidence—drawn from ESG rating divergence—for understanding the dual effects of digital technology, and offers a reference for leveraging digital technology to promote high-quality development and for improving corporate environmental information disclosure mechanisms.
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