ESG Rating Agency Coverage and Analysts’ Earnings Forecasts: Evidence from China

Mian Cheng, Li Ji, Albert Tsang and Zijian Xu

Emerging Markets Finance and Trade, 2025, vol. 61, issue 11, 3332-3358

Abstract: Utilizing data from six major environmental, social, and governance (ESG) rating agencies in China, we find that a greater level of coverage by ESG rating agencies is associated with smaller forecast errors and lower dispersion in analyst earnings forecasts for the covered firms. However, a higher level of ESG rating dispersion among agencies weakens this relationship. Cross-sectional analysis reveals that the impact of ESG rating coverage on analyst forecasts is more significant for firms with high levels of information asymmetry and a high proportion of sustainability analysts among tracking analysts. Overall, our findings suggest that comprehensive ESG information provided by multiple rating agencies can significantly influence financial analysts’ ability to predict firms’ future financial performance.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2025.2479637 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:61:y:2025:i:11:p:3332-3358

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2025.2479637

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().