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<p>Strategic impression manipulation through selective or symbolic sustainability disclosure has become a pivotal concern in corporate governance research, particularly given the global institutionalization of environmental, social, and governance (ESG) frameworks. While ESG adoption has reached unprecedented levels, scholarly understanding remains underdeveloped regarding how firms strategically adapt their reporting practices in response to conflicting external evaluations. This study investigates the association between ESG rating divergence (ERD) and firms’ engagement in ESG-washing strategies, with a particular focus on the moderating role of normative institutional pressures. Drawing on a panel of 16,653 firm-year observations from Chinese listed firms over the period of 2012–2023, this analysis yields robust evidence of a positive association between ERD and ESG-washing; that is, firms are more inclined to adopt ESG-washing practices when confronted with higher levels of ERD. This enhancing effect remains consistent after a series of robustness checks. Further analysis reveals that normative institutional pressures, such as the pollution information transparency, the presence of environmental NGOs, and public environmental concerns, can positively moderate the association between ERD and corporate ESG-washing. Theoretical and practical implications derived from these findings are discussed.</p>

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Corporate ESG-washing strategies responding to external rating divergence: moderating effects of normative institutional pressures

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2026年4月18日

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  • Zhenbo Zhang,
  • Xinran Zheng,
  • Xiaohua Meng

摘要

Strategic impression manipulation through selective or symbolic sustainability disclosure has become a pivotal concern in corporate governance research, particularly given the global institutionalization of environmental, social, and governance (ESG) frameworks. While ESG adoption has reached unprecedented levels, scholarly understanding remains underdeveloped regarding how firms strategically adapt their reporting practices in response to conflicting external evaluations. This study investigates the association between ESG rating divergence (ERD) and firms’ engagement in ESG-washing strategies, with a particular focus on the moderating role of normative institutional pressures. Drawing on a panel of 16,653 firm-year observations from Chinese listed firms over the period of 2012–2023, this analysis yields robust evidence of a positive association between ERD and ESG-washing; that is, firms are more inclined to adopt ESG-washing practices when confronted with higher levels of ERD. This enhancing effect remains consistent after a series of robustness checks. Further analysis reveals that normative institutional pressures, such as the pollution information transparency, the presence of environmental NGOs, and public environmental concerns, can positively moderate the association between ERD and corporate ESG-washing. Theoretical and practical implications derived from these findings are discussed.