Beyond the Rating: How Disagreement Among ESG Agencies Affects Bond Credit Spreads

Ning Gu, Xiangyuan Zhao () and Mengxuan Wang ()
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Ning Gu: Center for Quantitative Economics, Jilin University, Changchun 130012, China
Xiangyuan Zhao: School of Economics and Management, Harbin Institute of Technology, Harbin 150001, China
Mengxuan Wang: School of Business and Management, Jilin University, Changchun 130022, China

Risks, 2025, vol. 13, issue 10, 1-28

Abstract: Based on data from Chinese corporate bonds issued between 2014 and 2023, this study examines how ESG rating disagreement affects credit spreads. The results indicate that such disagreement significantly increases spreads through financial risk and information asymmetry channels, though this effect is mitigated by higher bond ratings. The impact is more pronounced in developed regions, highly marketized areas, less polluted and less competitive industries, non-Big Four audited firms, small enterprises, and state-owned enterprises. Increases in credit spreads are mainly driven by environmental and social rating disagreements, with the governance dimension playing a limited role.

Keywords: ESG; ESG rating disagreement; credit spreads (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2025
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