Analysis Of Convergent Validity Of Third-Party ESG Ratings Of Chinese Companies

ESG is an evaluation criterion proposed to assess whether an enterprise is in line with the concept of sustainable development,and its purpose is to stop using financial performance as a measurement indicator and to advocate that enterprises should actively assume relevant social responsibilities.As an important component of the ESG system,ESG ratings have an important impact on investors,companies and researchers,and if there is a difference between the evaluation results of different ratings for the same company,it may lead to mistakes in investment decisions or affect the accuracy of research conclusions.Therefore,the purpose of this paper is to explore the degree of aggregation between ESG ratings for companies in the Chinese market,and to demonstrate whether there are differences in the current third-party ESG ratings.Based on the above background,this paper selects seven domestic and foreign ESG ratings as the research object,with Bloomberg,FTSE Russell and MSCI as the representatives of foreign ratings,and Syn Tao Green Finance,RKS,Sino-Securities and China Alliance of Social Value Investment as the representatives of domestic ratings.Firstly,by manually compiling the relevant rating methodology information,this paper compares the basic information,core concepts and evaluation process of the seven ratings,among which the evaluation process part includes the evaluation scope,original information sources,index system and weights of each rating and the way of releasing the rating results.Secondly,this paper takes the enterprises covered by the CSI300 index as the sample scope,and 195 enterprises are excluded from the sample after the missing evaluation results are removed as the sample for quantitative analysis,and the rating results are assigned and standardized.Finally,descriptive statistics,overlap analysis and correlation analysis are conducted on the total ESG dimension results and each sub-dimension results of the sample companies to test the consistency among the rating results and observe the aggregation validity of the ratings.Through the analysis of the evaluation results of each rating,this paper obtains the following conclusions:(1)for the same enterprise,there are certain differences between ESG rating results;(2)among the three sub-dimensions,the environmental dimension shows a smaller level of difference;(3)Overall,the degree of differentiation among foreign ESG ratings is lower than that of domestic ratings;(4)Among the seven ratings studied in this paper,the Business Road Rongreen rating exhibits a high degree of aggregation.Based on the above system comparison and analysis of the rating results,this paper puts forward four suggestions for improving the aggregated validity of ESG ratings:(1)the ESG evaluation system with Chinese characteristics should be constructed;(2)the original ESG information disclosure system should be improved;(3)the evaluation process of rating agencies should be promoted to be open;and(4)the information management level of rating agencies should be improved.